Newfoundland and Labrador Hydro has submitted a filing to the Newfoundland and Labrador Board of Commissioners of Public Utilities identifying proposed electricity rate changes for customers effective Oct. 1.
According to a news release from Newfoundland and Labrador Hydro, the proposed rates are based on the findings outlined in the board order for the ongoing general rate application which also includes costs from the annual Rate Stabilization Plan adjustment.
“Customers count on us to provide reliable electricity and to keep costs as low as possible, and we know that rising electricity rates continue to be a concern,” said president Jennifer Williams. “We rely heavily on fuel to operate our electricity system for customers – the high cost of that fuel today has a significant impact on rates. We continue to pursue opportunities to ensure we’re managing our business as efficiently as possible for our customers.”
For customers on the island part of the province, hydro estimates that most residential customers will see rates increase by approximately 0.9 cents/kilowatt hour (7.6 per cent). This equals about $7.60 for every $100 on an electricity bill.
“The rate change is driven primarily by increased fuel costs,” the release states. “While there are many factors that contribute to the cost of generating and delivering electricity, the majority of the proposed rate increase for customers on the island is related to the cost of fuel. Today we rely heavily on oil to generate electricity for customers at our Holyrood plant.”
The forecast price of oil has increased significantly since rates last changed in 2018, from $86 CDN/barrel in 2018 to $106 CDN/barrel for 2019.
As requested by the board, the proposed rate changes also include costs from the annual Rate Stabilization Plan adjustment, which is normally implemented on July 1 each year, but this year will be combined with the general rate application adjustment. The Rate Stabilization Plan is used to adjust rates to reflect the actual price and amount of oil used each year at the Holyrood Thermal Generating Station. This further adds to the fuel costs included in the current proposed rate adjustment.
For Labrador customers, hydro currently estimates that most residential customers on the interconnected system (Upper Lake Melville and Labrador West) will see electricity rates decrease by approximately 0.1 cents/kilowatt hour or a reduction of $3.10 for every $100 on an electricity bill. The average rate for these customers currently is 3.1 cents/kilowatt hour. The proposed decrease is largely the result of increased customer usage and customer growth in the region.
The release notes that the changes are proposed — they are not final and therefore are subject to change.
The board will now review hydro’s filing and make a final decision about electricity rates for 2019, which is expected later this year. For more information about rate changes for customers in all service areas, visit nlhydro.com/electricity-rates/.