Newfoundland and Labrador Hydro is seeking rate increases of more than 6 per cent for most of the province’s residential customers in each of the next two years.
The public utility is filing a general rate application with the Public Utilities Board. It says much of the province’s electricity system was built in the 1960s and ’70s, and requires considerable maintenance, upgrades or replacement.
“We understand that any increase in rates can be a challenge for customers,” said Dawn Dalley, vice-president of regulatory affairs and corporate services. “We have proposed spreading the upcoming increase over two years to lessen the impact and we remain focused on controlling costs while ensuring reliable power for customers. We have also
made recommendations to help offset future rate increases as new equipment and facilities, like Muskrat Falls, come into service.”
The proposed increase would see rates on the island rise by 6.6 per cent in 2018 and 6.4 per cent in 2019. Rates in Labrador would rise by 6 per cent in 2018 and 6.6 per cent in 2019. Labrador diesel communities would rise by 6.3 per cent in 2018 and 6.5 per cent in 2019.
Muskrat Falls will have a significant impact on electricity rates once it comes online. N.L. Hydro says to help offset future rate impacts for customers, the application proposes that any savings gained by bringing less-expensive power to the island on new transmission lines from Labrador, or Nova Scotia, be set aside and given back to customers in future rates when Muskrat Falls comes into service.
The application to the PUB is the first step in the regulatory process to set electricity rates in the province. The PUB will review the application to ensure that the rates proposed are reasonable, and public hearings will take place. Once the process is complete, the PUB will make a final decision on electricity rates for 2018 and 2019.