The consumer advocate isn’t convinced NL Hydro’s rate increase is being driven by the growing cost of doing business.
Hydro President Jim Haynes testified before the Public Utilities Board today, where he answered questions put to him by his own counsel, industry lawyers and the consumer advocate Dennis Browne.
Browne says if the price of electricity gets to a certain point, consumers will simply stop using electricity for cheaper heating solutions.
Customers currently pay around 10 cents a kilowatt-hour. NL Hydro has applied for an increase of 2.8 per cent for July 1, and another 9.4 per cent increase in January as part of the General Rate Application (GRA). On top of this, a further 4.7 per cent increase in expected as part of the annual Rate Stabilization Plan (RSP).
Last week Siobhan Coady told media government and Nalcor are working to have rates around 15-17 cents when Muskrat Fall comes online.
The advocate questioned Haynes about Hydro’s involvement with the Muskrat Falls project, and tried to connect the company’s rate application to the ballooning cost of the megaproject.
Haynes says the rate increase is driven by the cost of new infrastructure, operating Hydro’s reserves, and keeping the system reliable.
Browne says Nalcor, Hydro and government have a vested interest in profit and taxes, and the rate mitigation process should be open and transparent for consumers.