The province’s consumer advocate is speaking out against Newfoundland Power’s proposed rate increase.
The public utility’s application for a rate increase will be before the Public Utilities Board (PUB) Wednesday – it’s looking to approve an average increase to current customer rates of about 1.2 per cent starting March 2019.
Consumer advocate Dennis Browne said in a news release that the application “comes at a particularly difficult time for consumers”, noting consumers are currently dealing with interim rates of 6.6 per cent starting July 1.
“Newfoundland Power cannot justify any rate increase,” Browne is quoted saying in the release. “Consumers will notice that Newfoundland Power’s annual after tax profits have now reached in excess of $40,000,000.00 a year. Therefore, on average Newfoundland Power is making a monthly net after tax profit over $3,000,000.00 from its customers and or in excess of $100,000.00 a day.”
Browne added the PUB has “generously” set Newfoundland Power’s common equity ratio at 45 per cent.
Browne called this “a national anomaly”, noting other utilities have lower ratios, such as NS Power at 37.5 per cent and Fortis Alberta at 37 per cent. The statement went on to say this is a chance for the PUB to “right this wrong” and set Newfoundland Power’s common equity ratio to a lower percentage that will be less costly for consumers.
He said Newfoundland Power can’t justify its stance that the province’s struggling economy resulting from Muskrat Falls means its risk has increased.
“It is worth noting that Newfoundland Power had opportunity to oppose the Muskrat Falls project but chose to remain silent. Newfoundland Power cannot use this complicity of silence as a reason to seek rate increases from consumers.”