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Editorial: Through the nose

Glynes Penney of Port Hope Simpson is disappointed that communities like hers will not receive any benefit from energy being produced in Labrador through the Muskrat Falls project. File photo
Construction of the slipway at Muskrat Falls, circa 2015. — SaltWire Network file photo

It wasn’t all that long ago — 2011, in fact — that the promise of Muskrat Falls meant a lockstep increase in power rates of just two per cent per year, all the way to 2067.

Now, when Muskrat comes on stream in 2021, power rates double what we have now will only be the bitter icing on a rate-hike cake.

(To put things in complete context, power rates in 2021 will be at the point that the original planners for Muskrat Falls said power rates wouldn’t reach until — wait for it — 2056.)

But leave aside the bill of goods we were being sold then, and look at the bill of goods we’re being sold now — and once again, that bill of goods is in power rates.

If this is what bringing “lower and stable rates” to this province looks like — a key promise during the selling process for Muskrat Falls  we’ve been sold a totally false bill of goods.

This week, the province’s Consumer Advocate argued that Newfoundland and Labrador Hydro’s current general rate application should be halted in its tracks, because the utility hasn’t given proper justification for the hike it wants.

The Consumer Advocate argues that between this past July and July 2018, consumers would see a rate hike of 23 per cent. Hydro argues that the rate increase it is asking for is only 13 per cent — which is technically correct. But the fact is that Hydro’s own evidence to the Public Utilities Board shows that the difference between rates in June 2017 and July 2018 for consumers would be 23 per cent. (Hydro doesn’t want to include the 8.1 per cent increase we got last July.)

It is truly a battle of semantics: on the bottom of your power bill, where it really counts, the consumer is going to see the full impact.

To make matters worse, another 6.4 per cent hike currently forecast for January 2019 would bring that total to more than 29 per cent over a span of just 18 months.

The increases are for a variety of things: there’s the potential for rising fuel costs, Hydro’s plan to overcharge us for electricity it buys off-island so it can use the bankroll it builds up to soften the 2021 kick in the teeth of Muskrat coming on stream, and the general drip-drip-drip of increased costs generally.

If this is what bringing “lower and stable rates” to this province looks like — a key promise during the selling process for Muskrat Falls  we’ve been sold a totally false bill of goods.

And if the current proposed rate hike seems high, stop and think about this.

Perhaps it’s just the new normal.

If nothing changes — even if there are no big new capital projects, if there are no unexpected salary increases at Newfoundland Hydro, if there are no additional cost overruns on Muskrat Falls — we’ll be paying more than anticipated for our electrical power for quite a while.

For at least the next 38 years, to be precise.

Enjoy.

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