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.
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"
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.