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Rate mitigation starts with Nalcor Energy, consumer advocate says

Consumer advocate Dennis Browne speaks with reporters on Wednesday.
Consumer advocate Dennis Browne speaks with reporters on Wednesday. - David Maher
ST. JOHN'S, N.L. —

Consumer Advocate Dennis Browne says it’s Nalcor Energy that got Newfoundland and Labrador into the Muskrat Falls boondoggle, so it’s Nalcor Energy that needs to get ratepayers out. 

Browne released his recommendations to the Board of Commissioners of Public Utilities (PUB) Wednesday after weeks of hearings on rate mitigation options.

One of the focuses of the 26-point list of recommendations is the need to reconfigure the Crown corporation. Browne says that means consolidation and it could mean privatization. 

“We said privatization of ‘Oilco,’ if need be. Nalcor caused this problem. Nalcor can’t sit back while the ratepayers of the province, the province’s businesses, our schools, our hospitals, our municipalities are overburdened because Nalcor imposed a failed project on the province,” Browne said. 

“It’s our advice to the government that it’s to Nalcor they should go first and foremost.”

“OilCo” is the yet-to-be named stand-alone oil and gas Crown corporation, which would essentially carve out the existing oil and gas division from Nalcor into a new body. 

"Nalcor can’t sit back while the ratepayers of the province, the province’s businesses, our schools, our hospitals, our municipalities are overburdened because Nalcor imposed a failed project on the province." — Dennis Browne

“If privatization should be explored, or can be explored, that might be one means. We’re not stating at this time it should be the means, but we’re stating that the government should look to Nalcor first and foremost,” said Browne. 

Another recommendation is to take the power supply division and the energy marketing division of Nalcor Energy and merge them into Newfoundland and Labrador Hydro. Such a move could save $20 million a year, Browne said. 

“What the ultimate structuring of Nalcor will be, should be something different than what it is today,” he said. 

Browne’s recommendations also turn toward the capital spending of Newfoundland and Labrador Hydro and Newfoundland Power, which is a subsidiary of Fortis Inc. 

He says it’s time to impose limits on how much those companies can spend every year, to reduce the amount of construction costs passed down to ratepayers. He says Newfoundland Power should have to work within a specific cap on its spending, rather than simply asking the PUB for whatever it wants. 

“Our focus now will be on capital spending. The ratepayers of the province, I’ve given notice to both companies, Hydro and Newfoundland Power, we want the system changed,” said Browne. 

“If legislation is required to impose a cap on capital spending, we will be seeking those changes.”

Another legislative change suggested by Browne is to examine whether or not Newfoundland and Labrador Hydro should continue its monopoly on power sales in the province. He says introducing competition into the local market may be a way for consumers to decrease the cost of their electricity bills.

Natural Resources Minister Siobhan Coady says the government will await the final report from the PUB on rate mitigation before committing to any specific options. The report is due before the end of the year. 

Twitter: @DavidMaherNL


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