What, exactly, is the plan?
The telling lines are 14 pages into the latest raft of paper from Newfoundland and Labrador Hydro on electrical price increases. But it’s not only what the lines say.
It’s where they came from.
First, here’s what they say: “Government has indicated that rate mitigation will occur to reduce the customer rate impacts. However, no defined plan has been released to inform customers on either the projected cost of electricity or the pace at which electricity rates will increase. Government has stated that it wants to be competitive with Atlantic Canadian rates, which it targets to be between 16-18 cents per kwh.” Now, where does that information come from? How does Newfoundland Hydro, a provincial Crown corporation, know what the government is thinking about where hydro rates should fall?
Well, it’s as easy as reading the footnotes: in this case, footnote No. 46. And as it turns out, Hydro read all about it in the media.
The government of Premier Dwight Ball apparently hasn’t talked to its own electrical utility about where it feels power rates should go in the next few years.
And that suggests plans to deal with the jump in electricity prices isn’t very far along yet.
Those plans have to offset millions of dollars in rate hikes. As Hydro points out, “It is estimated that each one cent per kwh in rate mitigation provided to customers will require approximately $70 million per year in funding. Therefore, rate mitigation to limit residential customer rates to 18 cents per kwh will require funding in the range of $280 million to $350 million per year.” It’s certainly not pocket change.
Plenty of people are asking where the money’s going to come from, and what the plan is supposed to look like: Suzanne Brake, the province’s seniors’ advocate, raised that very question on Tuesday: “The concerns and fears of seniors are real and seniors are asking whether a plan exists to mitigate increased electricity costs and, if not, how will the burden be alleviated.”
If the increase in electrical costs isn’t the single largest thing facing the current government, it should be. Because it’s not only the prospective doubling of power rates that will affect this province’s residents.
It’s also the fact that whole hosts of non-residential power users will be forced to pass their increased power costs on to their consumers. If the cost of streetlights doubles, every municipality will be forced to pass that on in the form of increased taxes. Every grocery store that sees an increase in running its fridges, freezers, lights and signs will have to pass that on in increased food prices. Every rink will have to pass increased operating costs on to hockey parents and recreational hockey players.
It’s time for the government to say what it actually intends to do.