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Russell Wangersky: Help wanted at the PUB

When Muskrat Falls power comes online in several years, ratepayers will pay substantially more for electricity, but Premier Dwight Ball says his Liberal government is working to limit that increase.
The Public Utilities Board is preparing to hear an extremely difficult rate hearing over electrical rate increases in March, and will need to fill some of its commissioner positions. — Stock photo

“Did you get your homework done?”

It’s the sentence that strike fear in the hearts of schoolchildren everywhere.

Russell Wangersky
Russell Wangersky

Soon, though, it may be striking fear in some fresh provincial Liberal appointees.

Here’s why.

There are supposed to be four commissioners at the Public Utilities Board. Andy Wells resigned as chair before the 2017 municipal elections. Two of the remaining commissioners are reaching the end of their appointments. With those departures, 43 years of regulatory experience will be gone, and could be replaced with new Liberal-appointed faces at a time when the board is dealing with a series of complex and technical applications.

Part of the problem now is that those appointments haven’t been made.

The board is preparing to hear an extremely difficult rate hearing over electrical rate increases, set to start on March 19.

But in correspondence sent to all the involved parties last week, the PUB had to announce a new wrinkle in that already-months-delayed round of public hearings.

“This start date is contingent on the board having certainty on the appointment and filling of the commissioner positions by March 2, 2018; and the availability of those that may be appointed to these positions to sit on the panel commencing March 19, 2018,” the board wrote. “If the board does not have confirmation on the commissioner appointments by March 2, 2018 the hearing date of March 19, 2018 will be postponed.”

It’s already going to be a wrangle: there are five different intervenors in the rate application, represented by at least eight lawyers, so you can imagine that it will all move at the speed of litigious molasses.

The board is preparing to hear an extremely difficult rate hearing over electrical rate increases, set to start on March 19.

But just imagine that the provincial government actually makes the appointments in time for the hearings to start.

Anyone new to the process will have a steep learning curve indeed.

Their homework will include: Newfoundland and Labrador Hydro’s three-volume, 1,946-page rate application and its supporting documentation, more than 350 pages of pre-filed expert testimony, 1,030 requests for additional information and their respective answers from Newfoundland Hydro (and the 50 times Hydro corrected, revised or changed their answers to questions), and the list goes on.

And it’s not easy reading. Try sentences like, “The proposed rate of return on rate base for the 2018 and 2019 Test Years of 5.73 per cent and 5.68 per cent, respectively, is based on an embedded cost of debt of 5.34 per cent and 5.25 per cent, respectively, for the 2018 and 2019 Test Years, and a return on equity (ROE) of 8.5 per cent for the 2018 and 2019 Test Years.” That sentence alone carries two separate explanatory footnotes and refers the reader to a 37-line, 10-column table that has its own explanatory footnote.

Now, some of the documentation is boilerplate, and any new commissioner will have the able assistance of commission staff.

But that’s not the only thing the board is dealing with.

On top of electricity rates, the same board is mandated to start hearing a full review of the automobile insurance business in the province in a few short months.

It’s a rough time for any newbies — especially because the decisions they make are going to be critical.

The electrical rate increase is examining a rate environment where bills could rise by 23 per cent by next January. The insurance review is examining a fundamental change in the rights of people who are injured in traffic accidents to sue for damages. There’s already a significant pushback from personal injury lawyers keen on protecting a key part of their business, and the review is likely to be both fractious and involved.

It’s not enough just to put butts in chairs to make decisions.

They have to be the right decisions as well — or else everybody will be paying for it.

Russell Wangersky’s column appears in 39 SaltWire newspapers and websites in Atlantic Canada. He can be reached at — Twitter: @wangersky.

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