Province not obliged to pay for delayed N.B. Power rate increase it helped cause
Public intervener says financial consequences fall on the utility, unless the province agrees to help
More than $75 million in fees, taxes and other charges collected annually from N.B. Power by the New Brunswick government could be adjusted to compensate the utility for a delay in this year's rate increase, if it occurs, but the province's public intervener says that is a solution only the government itself can decide on.
"In terms of a break from the government, that has to come from the government," said Alain Chiasson in an interview this week.
New Brunswick imposes a number of levies on N.B. Power annually including, in this coming year, utility taxes of $25 million, right-of-way taxes of $1 million and, in conjunction with local governments, municipal and provincial property taxes of $24 million.
In addition, the province charges an annual fee for guaranteeing N.B. Power's debt that is equal to $1 for every $154 the utility owes. With N.B. Power's debt now above $5.3 billion, that is an annual charge of $35 million. Interest costs on the debt are a separate expense for the utility.
The province also requires N.B. Power to pay for mandated government policies, such as subsidizing rates for pulp and paper mills at a cost of $12.6 million.
The sum of those charges provides significant financial room for the province to help the utility deal with $32.6 million in costs it is worried about facing, after it submitted this year's rate increase request to the New Brunswick Energy and Utilities Board 72 days late.
N.B.
Power has had to pay New Brunswick more than $570 million in fees over
the last 20 years to guarantee debt it took on for projects like the
refurbishment of the Point Lepreau nuclear generating station. The fee
is 30 per cent higher than Quebec charges its utility. (Shane Fowler/CBC)
Chiasson said the provincial government played a central role in why the rate filing was late but nothing obliges it pay for that if N.B. Power is penalized financially.
"That's a decision that the government will have to make — how much money they pull out of the utility and how much of a break they want to give them on property taxes, or any other taxes N.B. Power pays right now," said Chiasson.
N.B. Power has applied for a 9.25 per cent rate increase that it says it needs to begin on April 1 to meet long range financial targets set for it by the province.
However, the rate increase request, which was due on Oct. 4, wasn't submitted until Dec. 15 because of last minute changes the province made to those targets.
That has delayed a full rate hearing by the New Brunswick Energy and Utilities Board until mid-May
To deal with that, the utility has applied for a special interim rate increase to take effect on April 1.
N.B. Power argues it can rebate any excess money it collects from customers if the rate increase is eventually found to be too high.
Otherwise it says it will lose up to $32.6 million in critical new revenues if higher rates are delayed until July 1. It believes that is a likely date after a May hearing is concluded and a decision by the EUB is rendered sometime in June.
Irving
Oil's crude-oil tank farm at Mispec Point, known as Canaport, has been
exempt from paying provincial property taxes for 43 years. Several New
Brunswick industrial properties deemed important to economic development
enjoy similar tax treatment. (Mike Heenan/CBC)
"Such a delay in implementation of rates will have a deleterious impact on NB Power," utility lawyer John Furey wrote in a motion applying for the special April 1 increase.
Chiasson is opposing an interim increase.He notified the EUB in writing last week that he will argue N.B. Power and the New Brunswick government are jointly responsible for the rate application being submitted 72 days late and the consequences of that belong to them.
"The delay in filing the [general rate application] was self inflicted," Chiasson wrote in his response to the N.B. Power application.
"The public intervener requests that the Applicant's motion be denied on the grounds the interim order is not in the public interest."
However, Chiasson said there is nothing preventing the province from taking financial responsibility for what happened, rather than utility, if that's something it decides to do.
The New Brunswick government already exempts many industrial properties from paying provincial property taxes, including petroleum infrastructure belonging to Irving Oil Ltd., railway tracks and right of ways owned by both J.D. Irving Ltd. and CN Rail and the entire LNG facility belonging to Repsol.
N.B.
Power lawyer John Furey at a 2022 Energy and Utilities Board hearing.
Furey has applied to the board for an interim rate increase of 9.25 per
cent to take effect on April 1. A full hearing cannot be held until May
because the utility was 72 days late making its application. (Graham Thompson/CBC)
Even the controversial Saint John metal shredding facility owned by American Iron and Metal Ltd. is exempt from provincial property taxes, a benefit the province could extend to N.B. Power facilities if it chooses.
Alternatively, N.B. Power's debt guarantee fee, which is set 30 per cent higher than a similar fee charged to Hydro Quebec by its provincial government, could be adjusted.
The provincial government has not said it would consider lowering amounts it charges N.B. Power to make up for a delayed rate increase but last week New Brunswick's Progressive Conservative Party said it supported a rate increase delay until July.
"Who would you rather see get the $32.6M? NB Power? Or NB Families?" the party posted on its social media platforms.
The EUB has scheduled a meeting for March 1 to hear arguments on whether or not to grant an interim increase for April.
ABOUT THE AUTHOR
"The basis for the requested variance of the filing date for this application was beyond the control of N.B. Power," wrote Furey in his current motion."
IN THE COURT OF APPEAL OF NEW BRUNSWICK
UNDER SECTION 52(1) OF THE ENERGY AND UTILITIES BOARD ACT, SNB 2006,
c. E-9.18, AND RULE 69 OF THE RULES OF COURT, NB REG 82-73
BETWEEN:
NEW BRUNSWICK POWER CORPORATION,
APPLICANT,
- and –
NEW BRUNSWICK ENERGY AND UTILITIES BOARD,
RESPONDENT.
TO: NEW BRUNSWICK COURT OF APPEAL
AND TO: New Brunswick Power Corporation, Applicant
ACKNOWLEDGEMENT OF RECEIPT
I hereby acknowledge that on the day of July, 2023, I received
the following documents:
a) Notice of Application dated July 4, 2023, issued by the Court of
Appeal on July 5, 2023;
b) Affidavit of Darren Murphy dated July 4, 2023, with Exhibits “A”
through “I” attached; and
c) Correspondence from the Deputy Registrar of the Court of Appeal
dated July 5, 2023.
I am a Registered Party who is named at the top of the notice of
application why would I be required to seek status?
Veritas Vincit
David Raymond Amos
New Brunswick Power Corporation
APPLICATION FOR INTERIM RATES
NOTICE
New Brunswick Power Corporation has filed a Notice of Motion with the New Brunswick Energy and Utilities Board seeking an interim order as follows:
1. Approving the schedule of rates for the 2024/25 fiscal year as set out in Exhibit NBP 02.07 in Matter 552 which reflects differential rates and an average 9.25 per cent increase to all customer classes, effective from April 1, 2024 until further Order of the Board;
2. Directing NB Power to make billing adjustments for customers in the event that final rates approved by the Board are different than rates approved in the Interim Order, and further directing NB Power to keep appropriate records to permit such adjustments;
3. Directions respecting the hearing of this Motion; and
4. Such further Orders and Directions as the Board may deem appropriate.
NB Power’s Notice of Motion and the supporting affidavit may be viewed on the Board’s website at www.nbeub.ca under Matter No. 552.
As per Rule 4.3 of the Rules of Procedure, any party to this matter who wishes to respond to the Motion must file and serve on all other parties, a written response outlining the party’s position and the grounds for same along with a specific indication of any evidence upon which the party seeks to present or rely no later than Thursday, February 8th at 4:00 p.m. (Atlantic Time).
Parties who have filed a written response to the Motion are to file their written argument outlining their position in response to the Motion, including copies of any authorities upon which they intend to rely no later than Thursday, February 22nd at 4:00 p.m. (Atlantic Time).
The Board will hold an in-person hearing on the Motion for Interim Rates on Friday, March 1, 2024, beginning at 9:30 a.m. (Atlantic Time). The location will be confirmed by the Board shortly.
New Brunswick Energy and Utilities Board
P.O. Box 5001
Suite 1400, 15 Market Square
Saint John, NB E2L 4Y9
Telephone: (506) 658-2504
Toll Free 1-866-766-2782
Fax: (506) 643-7300
E-Mail: general@nbeub.
NB Power was delayed submitting. Not Higgs fault
David Amos
Reply to Les Cooper
If not Higgy then who?
nancy malachowski
There you have it. Higgs govt has chosen to squeeze NBers through NB Power to offset the loss of taxes from rich companies that were granted tax exemptions.
Don Corey
Reply to nancy malachowski
Interesting conspiracy theory that makes no sense, but liberals will like it.
Donald LeBlanc
Reply to Don Corey
The facts are the facts.
David Amos
Reply to Don Corey
It not a conspiracy theory
Don Corey
Reply to David Amos
Depends on what you're referring to.
David Amos
Reply to Don Corey
Higgs govt has chosen to squeeze NBers to offset the loss of taxes from rich companies that were granted tax exemptions.
Robert Losier
I thought the name is Energie N-B
Les Cooper
Reply to Robert Losier
Only for 1/3 of province
David Amos
Reply to Les Cooper
C'est Vrai
Robert Losier
I went bald. Was it Higgs or Irving responsible. I want to know. I wan to know now.
David Amos
Reply to Robert Losier
Methinks everybody knows why you went bald N'esy Pas?
Robert Losier
Liberals rebranding carbon tax rebate to ensure Canadians know where the money comes from.
I need a hint as to "know where the money comes from".
David Amos
Reply to Robert Losier
Ask Higgy
Sad state of affairs we have here in New Brunswick
Don Corey
Reply to Raymond Leger
You've worn that one out. Any chance of something a bit more original?
Samual Johnston
Reply to Raymond Leger
Where in the world is it ‘not sad’. Just wondering. We all seem to be having the same issues.
Donald LeBlanc
Reply to Don Corey
The facts are the facts.
Don Corey
Reply to Donald LeBlanc.
It'll take time, but things will start to look up in Canada soon after the Trudeau government gets turfed in the next election.
Donald LeBlanc.
Reply to Don Corey
He was speaking of the sad state of affairs in NB. Along your thinking, as soon as Higgs is gone, things should start to look up.
Graham McCormack
Reply to Don Corey
First, the federal government had nothing to do with NB Power's rate increase and fees they need to pay to the provincial government.
Second, who is going to replace Trudeau that will actually do something for the people?
Don Corey
Reply to Graham McCormack
NB Power rate increases will take place regardless of the NB party in power. Poitras has written another story about nothing.
As to Trudeau, you must be kidding.
Don Corey
Reply to Donald LeBlanc
The sad state of affairs, in case you haven't been paying attention, is Canada-wide. There's no guessing on who will soon be turfed and then things will look up.
David Amos
Reply to Graham McCormack
Who oversaw the refurbishing of Point LePreau? .
My mom was a delegate for the conservatives way back when and I can remember going to Freddy for a convention once and meeting Hatfield. The conservatives of today are no where near the same idology as in those years.
Games People Play
by Joe South
[Verse 1]
Woah, the games people play now
Every night and every day now
Never meanin' what they say now
Never sayin' what they mean
[Verse 2]
While they wile away the hours
In their ivory towers
'Til they're covered up with flowers
In the back of a black limousine
Woah
Hatfield said of his bachelor lifestyle, "the nuclear family—one wife, two kids and one dog—looks nice on Christmas cards, but they pay an awful price"
You picked a fine time to leave me Margret
Lalond in charge of some department and Chretien out in da Left Field
Three spoiled children ...
And Dad's Dad's chain of gas stations "sold" to Petro Canada
So the provincial government is bleeding NB Power dry and then blaming the utility for it's financial woes. Meanwhile big industry is being subsidized at the expense of both NB Power and the ratepayers.
Lou Bell
Reply to Michael Collins
Nope , Higgs has tried to work with NB Power in paying off the debt , and the Greens and Liberals have balked at any increases . The left won't even admit it even though we all know it's true .
Graham McCormack
Reply to Michael Collins
Excellent synopsis!
Rosco holt
Reply to Lou Bell
Tried? Where. He substantial increased subs to mills to compete against BC. The right always projects their failure and takes credit for the success of others.
Robert Losier
Reply to Lou Bell
Who is your "we" this time?
Don Corey
Reply to Michael Collins
Why is it that the Gallant government did nothing about the power subsidies to industry in the province?
Why is it that we hear nothing from Susan Holt on what she'll do about the subsidies, or more importantly, how she'll deal with NB Power on their huge debt?
And how exactly is the current government "bleeding NB Power dry"?
NB Power has been an albatross to NB for longer than most of us care to remember, and that albatross just continues to get heavier.
Why do you think the Graham government tried to sell off NB Power 15 years ago? Too bad it didn't work out, because it would have been the best move of any Liberal government in decades.
Don Corey
Reply to Rosco holt
The power subsidies to NB pulp and paper mills were to allow them to better compete with Quebec mills that were benefitting from much lower rates. They have nothing to do with BC.
David Amos
Reply to Don Corey
"Why do you think the Graham government tried to sell off NB Power 15 years ago? Too bad it didn't work out, because it would have been the best move of any Liberal government in decades."
I wholeheartedly agree
Keith McLellan
The NB provincial government under Blaine Higgs is bound and determined to bankrupt NB taxpayers, and now NB Power as well. The election can't come soon enough!
Lou Bell
Reply to Keith McLellan
Hilarious ! Higgs just paid 2 billion dollars on NB debt . Where'd you get that idea from ? You'd better look at your Liberals . It just came to light in the past week another Liberal program has run 10's of billions over budget . Really , we can't vote them out fast enough , they're gonna bankrupt our Country !
Don Corey
Reply to Lou Bell
True.
Don Corey
Reply to Keith McLellan
It's nothing less than ludicrous to state that this government will bankrupt NB'ers. We were certainly well along that road under the free spending and mismanagement of the Gallant government.
As to the NB Power debt, it's been a huge problem long before Higgs became premier.
David Amos
Reply to Don Corey
True but that does not justify Higgy's actions
Dan Lee
subsidies and no property taxes.... are we crazy ...........to billionaires..........
G. Timothy Walton
Reply to Dan Lee
Yes, we are crazy. We should emulate Québec's example and vote for new political parties when the old ones become overconfident.
Graham McCormack.
Reply to G. Timothy Walton
Which new parties would those be?
MR Cain
Reply to Graham McCormack.
Cardy has started up a new one. Canada Future Party
I say go with the old and bring in Gerald Bourque of KISS.
Graham McCormack
Reply to MR Cain
Cardy is not a provincial party.
KISS certainly seemed to attract the people with the skill sets needed to run a province. Just like the People's Alliance and the NDP.
G. Timothy Walton
Reply to Graham McCormack.
Check their elections articles on Wikipedia.
Graham McCormack
Reply to G. Timothy Walton
Whose elections articles?
MR Cain
Reply to Graham McCormack
No, Cardy is not a party.
KISS always talked about common sense before the Federal Conservatives.
David Amos
Reply to Graham McCormack
Why don't you put your name on a ballot?
The mess with NBPower will continue until they complete their agenda.
Privatize everything, so our politicians have no responsibility/ accountability. When an issue arises they'll just says go and see company X that administers it and company X's answer go see government. Like we've seen with Ambulances and Medavie.
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