Putting power rates in perspective

Perspective is a marvellous thing.

And how you read this column will depend on exactly that.

But more than simply geography, how you read this column will depend on where you live.

First, the background. For those who don’t know, the government of Newfoundland and Labrador built a ruinously expensive hydroelectric project called Muskrat Falls. It’s not completed yet, so the bills aren’t coming home to roost. When they do arrive, all things being equal, power rates were forecast to shoot up to over 20 cents a kilowatt hour. But the provincial government has promised they won’t increase — and wants $200 million a year in assistance from the federal government to keep rates at 13.5 cents a kilowatt hour, regardless of the province’s horrendously bad investment decision.

If you’re in Newfoundland, that probably sounds good, and like something the federal government should have a hand in.

Now let’s travel to Lunenburg, N.S. It’s a picturesque town with a long fishing history and a decidedly picturesque tourism presence. Part of its history is owning its own electrical utility, which provides power to the town from the Nova Scotia Power grid.

Monday, Nova Scotia’s public utilities regulator, the Nova Scotia Utility and Review Board, issued an order on the power rates that their utility will charge Lunenburg residents in 2020, 2021 and 2022.

For 2020, the first 200 kilowatt hours for domestic customers will cost 15.756 cents per kilowatt hour (kw/h). For 2021, 15.897 cents per kw/h. For 2022, 16.412 cents per kw/h.

In Prince Edward Island, the current price for domestic customer is 14.37 cents per kw/h. Maritime Electric, the province’s power utility, is in the process of seeking a rate hike.

Natural Resources Canada, in 2018, provided this list, in declining order, for power rates per kw/h across Canada, with taxes added in: Charlottetown — 19.35 cents, Regina — 18.98 cents, Halifax — 17.24 cents, Toronto — 15.11 cents, Edmonton — 15.07 cents, Moncton — 14.92 cents, St. John’s — 13.83 cents, Vancouver — 12.19 cents, Winnipeg — 10.41 cents, Montreal, 8.2 cents.

So, Newfoundland and Labrador is pretty far down the list for power costs already. (And since generally, electricity prices go up, not down, Newfoundland’s ability to hold rates steady simply means other jurisdiction will pass by it into more-expensive territory.)

If the province really does hold power rates at 13.5 cents a kilowatt hour for residential customers on the island (Labrador has its own, unique, much cheaper power rates that are unaffected by the Muskrat Falls fiasco) and the federal government does kick in cash to let that happen, how exactly does the federal government defend that decision to everybody else, especially those who are already paying more per kw/h than the proposed 13.5 cents?

I mean, there are ways. You can, for example, talk about the inability of Newfoundlanders and Labradorians to pay, given the province’s lower income rates.

You might even mention the current decline in oil prices, the restricted ability of the province to increase revenues, etc. — though you might not want to point out that, in terms of those revenues, Newfoundland and Labrador’s per capita revenues generally rank around third in the country, depending on oil prices.

But arguments about what things cost usually come down to simple things. Here’s my bill — here’s yours. Why are my tax dollars keeping your power bills lower than mine?

If you are a member of Parliament from, say, Nunavut, from your perspective, how do you sell bailing out Newfoundland and Labrador when the power rate in Iqaluit stood at 58.56 cents per kw/h hour in April 2019? (I know that’s picking one of the worst-case electricity pricing scenarios in the country.)

It’s just a question.

A question about perspective.