Newfoundland Power says it will not increase electricity rates due to the cost of operations, but that doesn’t guarantee customers will dodge electricity rate increases in 2019.
In a news release on Friday, Newfoundland Power CEO Peter Alteen delivered some careful language related to the company’s 2019-20 general rate application.
“There will be no increase in base electricity rates for our customers related to our cost of operations in 2019 or 2020,” read the statement from Alteen.
“This is good news for our customers at a time when they are concerned about what the future price of electricity related to the Muskrat Falls project will look like.”
The key phrase in Alteen’s statement is “related to our cost of operations.”
While Newfoundland Power’s own operations might not result in any increases, the 2017 rate application from Newfoundland and Labrador Hydro remains outstanding. Since Newfoundland Power purchases electricity from Newfoundland and Labrador Hydro, if the latter sees a rate increase, power bills from Newfoundland Power could still increase.
While Newfoundland Power’s statement remains true that the company is not contributing to increases as a result of operating costs, attention should turn to Newfoundland and Labrador Hydro’s rate application.
The original 2017 general rate application was filed with the Board of Commissioners of Public Utilities (PUB) and has since seen a number of revisions.
Originally, Hydro asked for a 9.7 per cent rate increase to Newfoundland Power, which would have seen an approximately 6.6 per cent increase to island interconnected customers.
In July 2018, a revision was filed that included a “rate smoothing” measure, changing the revised average electricity rate increase to customers from 9.4 per cent to 1.2 per cent.
In October 2018, another revision was filed due to increased fuel costs. As of the latest application to the PUB, Newfoundland and Labrador Hydro is requesting a four per cent increase in power rates, effective July 1, 2019.
Final written submissions for the 2017 general rate application from Newfoundland and Labrador Hydro are due on Feb. 1, with a final deadline for replies from Newfoundland and Labrador Hydro on Feb. 8.
Any increases to Newfoundland and Labrador Hydro’s rates will have an effect on the electricity rates passed on to customers, through Newfoundland Power.
The final decision on rate increases from the PUB is expected to come after Feb. 8.