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Consumer Advocate Dennis Browne is calling on the government to establish an all-party committee to examine how electricity rates are set in Newfoundland and Labrador.
Browne says it’s time for politicians to work together to determine how to keep electricity rates affordable in Newfoundland and Labrador.
“Ratepayers expect better. It’s not good enough for members of the legislature to be sniping on us in reference to these matters. Surely, ratepayers can expect them to come together and work together for the common good,” said Browne.
“Ratepayers, I would think, would expect nothing more than that. It’s not good enough what’s happening there right now. We all know who’s responsible. It’s all there. Judge LeBlanc is going to tell us that. He’s going to tell us in black and white who caused the fiasco. We know who it is. We got that. But we have to move forward now.”
Brown says the existing system for setting electricity rates encourages Newfoundland Power to continue building infrastructure to make money, but the province doesn't need more electrical infrastructure.
“(Newfoundland Power) needs to expand their rate base to get a good rate of return because they are not expanding their customer base. Their customer base is flat. They need to get their money somewhere else. They don't have additional customers right now," said Browne.
"This massive expansion has to stop. We don't need a lot of that. The legislature should be doing something about it. That's something they can start with — is there a better regulatory system you put in place?"
Browne says Monday's announcement on federal and provincial co-operation to restructure the financial arrangements of the Muskrat Falls hydroelectric project is a good one, but there are still many uncertainties about the plan.
One of the questions is whether or not the July 2017 cost and schedule update given by Nalcor CEO Stan Marshall is still accurate. The federal and provincial governments used modelling based on the $12.7-billion figure, which Browne suggests is not the final cost of the construction of the Muskrat Falls project.
“Because the final figures are not in for Muskrat Falls, the models are based on projections. We don’t know what the final figures are going to be. The government doesn’t know, neither does the federal government,” said Browne.
Browne says the estimates are that switching to the cost-of-service model is a good move for ratepayers, and will result in $30 billion less in electricity rates over the next 50 years.
“The power purchase agreement never should have been executed. The power purchase agreement was effectively taking millions of dollars over time from ratepayers, putting it back into Nalcor, who could, I guess, use the money for their own purposes,” said Browne.
While there’s still much left to figure out, Brown says, overall the agreement between the provincial and federal governments to restructure the finances of the Muskrat Falls project is a good one.
“It is a work in progress. We won’t have final figures until final figures are available. The positive part: they are working on it,” said Browne.