Majority of customers will pay less if new hydro rates approved

Ashley Fitzpatrick
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Utility wants more from customers on isolated power systems

NL Hydro log

Newfoundland and Labrador Hydro is proposing changes to its power rates across the board, changes yet to be reviewed and approved by the province’s Public Utilities Board (PUB).

Leaders with the Nalcor company say the requested changes will see a decrease in Hydro rates for 95 per cent of customers.

The rate application, filed today with the PUB, is a first for Hydro since 2006.

Hydro has requested a decrease in rates relevant to the approximately 241,000 customers of Newfoundland Power — from an average of 12.4 cents per kilowatt hour (kWh) to 12 cents.

An identical request has been made for Hydro’s 22,700 customers tied into the island system, on the Northern Peninsula and the Baie Verte Peninsula.

However, an increase has been requested for 800 or so customers on the island on isolated systems  — in Francois, Ramea, St. Brendan’s, for example — from an average 14.8 cents per kWh to 14.9 cents.

 

Labrador rates

Larger increases are proposed for Labrador, affecting customers tied into the system in Labrador West and Happy Valley-Goose Bay. Customers tied into the L’Anse au Loup system will also see an increase, but the largest jump will go to rates for residents reliant on Labrador’s isolated, coastal diesel systems.

Newfoundland and Labrador Hydro has a little over 14,000 customers in Labrador, about 2,600 of those are fed from the coastal, diesel systems.

“In Labrador, there’s been quite a bit of economic activity in recent years and as a result Hydro has been making investments in recent years into the system in Labrador to maintain reliable electricity supply to the customers, while trying to balance that to keep costs down,” said Rob Henderson, vice president of Newfoundland and Labrador Hydro, taking questions from reporters in St. John’s late this morning.

Henderson listed upgrades and new infrastructure amounting to a cost of about $39 million in Labrador in recent years.

He said the utility has invested in coastal diesel plants. He said diesel remains the least-cost option for coastal customers, despite ongoing study of alternatives for the isolated systems by Hydro.

Henderson said additional wind generation on the island since 2009-10, in addition to power available from the seized hydro assets once associated with Abitibi’s paper mill in Grand Falls-Windsor, has helped to save on fuel and displaced some oil use at Holyrood, allowing for some of the rate decrease proposed.

The changes proposed by Hydro are expected to come into effect in January 2014.

 

Industrial rates

That said, Hydro is in the process of bringing in a quicker rate change for the province’s industrial customers outside of Labrador West.

Once Vale’s Long Harbour processing facility comes online, the industrial customers will include: Corner Brook Pulp and Paper, Teck Resources, North Atlantic Refining, Vale and Praxair.

If Hydro’s rate increase is approved for these customers, they will go from paying 4.6 cents per kWh for their electricity, effective since 2007, up to 5.6 cents per kWh as of September of this year.

The rate will further increase to 8 cents per kWh by Sept. 1, 2015 — if Hydro’s rate application is approved as requested.

The Public Utilities Board (PUB) will hold hearings this fall to review the majority of the requested changes, akin to the more common Newfoundland Power rate application and review process.

Ultimately, the PUB may decide not to approve the rate change as requested, calling for more minor changes or denying increases.

No dates have yet been set for the review.

To help people understand the application and the changes coming, Newfoundland and Labrador Hydro have launched a website — www.hydrogra.ca — providing further information.

More in tomorrow’s print and digital editions.

 

afitzpatrick@thetelegram.com

Organizations: Newfoundland and Labrador Hydro, Public Utilities Board, Newfoundland Power

Geographic location: Labrador West, Francois, Happy Valley Goose Bay Abitibi Grand Falls-Windsor Holyrood Long Harbour

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Recent comments

  • JM
    July 30, 2013 - 20:29

    one of fhe major reasons for muskrat falls was the supply of power required for long harbour. From memory this was about 700 GWhr of energy from the original 2000 GWhr (40%) of MF production earmarked for Newfoundland. During the PUB hearings Nalcor advised that MF power would cost Newfoundlanders 23 cents a kwhr in 2017. However this was based on all 2000 GWHr of energy being sold at the same rate. So if Vale is now going to get industrial rates for 700 GWhr at 5.9 cents, does this mean we will have to pay more than 23 cents for the remaining 1300 GWhr? If this is the case residential customers on the island will be paying over 30 cents a kwh for muskrat falls power, before the Newfoundland Power markup. What does the consumer advocate have to say about that?

  • Wally
    July 30, 2013 - 17:46

    Coastal Labrador gets hit again. It will soon be too expensive for the average family to live here. It seems like a forced resettlement program.

  • Jack
    July 30, 2013 - 14:15

    Since Corner Brook Pulp and Paper generates their own power through "Deer Lake Power", a Kruger owned power plant, I'm wondering why Nalcor includes them as their industrial power customer? Doesn't make sense.

    • Dave
      July 30, 2013 - 22:47

      Makes perfect sense. Corner Brook Pulp and Paper generates most of their own power through "Deer Lake Power" but buys the rest from Nalcor, making them an industrial customer.

    • Foghorn Leghorn
      July 31, 2013 - 13:48

      The Deer Lake power plant does not always generate enough power to meet the power demands of Corner Brook Pulp and Paper. They have to make up the difference purchasing power from NL Hydro.

  • Jack
    July 30, 2013 - 14:09

    Since Labrador's residential customers will endure a 25% rate increase from 3.9 cents/kwh to 4.3 cents/kwh in Central Labrador and from 6.9 cents/kwh to 8.3 cents/kwh on the Labrador Coast, and industrial customers could see their power rates nearly double in just two years, it sounds like Nalcor are being greedy at the expense of Labradorians. Due to rate hikes being excessive, and Nalcor continues to generate huge profits, Nalcor should be forced to pay for upgrading costs and not go the root of Emera/Nova Scotia Power in making ratepayers pay for it. Secondly, since most of their customers are getting marginal savings while Labradorians take a big hit, the PUB should do the right thing and reject Nalcor's proposed rate hike. Otherwise, this province will become "Nova Scotia-ized" where power companies always get whatever they want.

    • Tony Rockel
      July 30, 2013 - 17:45

      Under new rules, the PUB can now only "recommend" suitable rates for electricity-- they have been practically neutered by the PC government.

  • dan
    July 30, 2013 - 12:32

    Great news. Labradorians should pay more as they are getting enough tax breaks as it is.

  • Betty
    July 30, 2013 - 12:29

    LOL...REALLY...Trying to fool the people once more...How silly do think we are...

    • Jack
      July 30, 2013 - 14:16

      Betty, their proposed rate increase doesn't add up either since Corner Brook Pulp and Paper are listed as Nalcor's industrial customers, but they generate their power independently through "Deer Lake Power".