Progressive Conservative Leader Ches Crosbie says he has electricity rate mitigation figured out ahead of the coming election campaign.
Crosbie unveiled his Crosbie Hydro Energy Action Plan (CHEAP) at a news conference at Confederation Building on Monday morning.
The numbers in Crosbie’s plan come from the ongoing review of rate mitigation options underway at the Board of Commissioners of Public Utilities (PUB), he said.
“The people of the province have been asking whether it's possible to prevent power rate increases due to Muskrat Falls. Based on information provided by the (PUB) as recently as last week, we have finally been able to figure out that this can be done.” — Ches Crosbie
According to CHEAP, the province needs $575.4 million to keep electricity rates at 14.67 cents per kilowatt hour, which is the projected electricity rate for 2020, the year before Muskrat Falls is scheduled to come fully online.
“The people of the province have been asking whether it's possible to prevent power rate increases due to Muskrat Falls,” said Crosbie.
“Based on information provided by the (PUB) as recently as last week, we have finally been able to figure out that this can be done.”
According to Nalcor’s projections, if nothing changes on the rate mitigation issue, electricity costs will rise to about 22 cents per kilowatt hour.
Source of money
The CHEAP says $123 million of the needed funds will come from diverted revenues from Newfoundland and Labrador Hydro, $40 million will come from export sales of Muskrat Falls power, $30 million will come from cuts and restructuring at Nalcor Energy, $150 million will be saved when the Holyrood Thermal Generating Station is shut down and $231 million of the existing Nalcor Oil and Gas revenues can be funneled toward rate mitigation.
Of all the money referenced, only $15 million in the CHEAP plan comes from new spending cuts introduced by Crosbie. The PUB review Crosbie references calls for $15 million in savings at Nalcor, but Crosbie says there’s more fat to trim at the Crown corporation.
“It’s not the major element here, but it certainly helps. $30 million looks like real money to me, I don’t know about you,” he said.
The PUB review was started by the Liberals, after a cabinet order was issued in September 2018.
Crosbie says his plan is based on the “best information available to anyone outside of government at this point in time.”
Another note touched on by the CHEAP is a tax exemption on exported power from the Upper Churchill that expired in August 2016. Crosbie says there is now an opportunity to tax exports from the Upper Churchill to gain millions in taxation that could also be used to offset any electricity rate increases.
Premier Dwight Ball couldn’t say too much about the end of the tax exemption, as it’s one of the matters tied up in the courts in legal cases between this province and Quebec.
“There’s a current court challenge on the go right now about how the transition language would work. Most people would refer to this as the water management question. That’s still in the courts,” said Ball.
“We get justice and we get legal opinions on all these matters.”
Overall, Ball said he wasn’t impressed with Crosbie’s plan.
“There’s nothing new to that plan. All of the information that I saw there is released today and has been publicly available, widely discussed,” said Ball.
“At least we have the PCs talking about electricity rates and the damage that’s been done by Muskrat Falls.”
The PUB will complete its review on rate mitigation options for the province in January 2020 – after the legislated date for this year’s provincial election.