Prepare for higher power bills
NDP wants to talk relief for ratepayers
Costs have ballooned on the province’s landmark Lower Churchill Project, Newfoundland and Labrador Hydro’s capital budgets have skyrocketed and Newfoundland Power claims greater demand on its operations.
It all adds up to higher power bills ahead. But how much higher? When? Newfoundland Power can’t say. “As we understand it, the Muskrat Falls project will cost about $9 billion upon completion. This is approximately three times the value of the current investment in the province’s electricity system (Newfoundland Power and Newfoundland and Labrador Hydro combined),” stated Karen McCarthy, Newfoundland Power’s director of customer and corporate communications, in an emailed response to questions.
“This will then mean a significant increase in customer electricity rates in the future, something which concerns Newfoundland Power considerably.” When sanctioned in 2012, the project was estimated at $6.2-billion but now stands on the books at $7.65-billion. Another update is expected later this year.
It is not the only factor in rates. In documents on file with the Public Utilities Board, from fall 2015, Nalcor suggested the all-in cost for the average residential customer by 2020 would be 19.8 cents per k Wh —a 53 per cent increase from current rates.
The estimated figure includes a 15 per cent HST. The Liberals waved off that tax increase, but have also not stood firm in related messaging since.
As for other avenues of relief, Premier Dwight Ball has mandated Natural Resources Minister Siobhan Coady to see excess power from the Muskrat Falls project sold and the revenues applied, like a salve, to help ratepayers. But how much money might reasonably be expected through the sales? How will it be distributed ( for example, how much to commercial versus residential ratepayers)?
Consumer Advocate Tom Johnson said he has not been involved in any detailed discussions around applying revenues from power sales. But he suggested people can expect more certainty on their power costs with time.
TC Media reached out to government communications March 23 regarding this story. The following statement was received shortly after 4:30 p.m. Monday, attributed to Minister Coady:
“The Public Utilities Board is responsible for the regulation of electric utilities in our province to ensure that the rates charged are just and reasonable. Final electricity rates after Muskrat Falls would be set by the Board of Commissioners of Public Utilities through a future general rate application. As part of government’s mandate, we are committed to selling surplus power generated from Muskrat Falls and to use that revenue to mitigate increases in electricity rates. After the rate application has been filed, government will review the proposed rates and determine the level of mitigation required. ”