The provincial government has laid out its plan to prevent power bills from almost doubling due to costs associated with the Muskrat Falls project.
The crux of the rate mitigation plan involves capping annual increases at 2.25 per cent until 2030.
That means a monthly power bill of $300 would increase to about $307, instead of roughly $500 without the plan.
But it will likely go up more than that.
While rate mitigation covers all costs associated with Newfoundland and Labrador Hydro, it doesn’t shield residents from future increases sought by Newfoundland Power.
That utility is seeking an estimated 6.7 per cent rate increase as of July 1st, to reflect and recover costs incurred and paid to Hydro last year.
Newfoundland Power CEO Gary Murray says the bills from Hydro represent NL Power’s single largest expense, and its costs must continue to be recovered through power bills.
“This (6.7 per cent) rate increase provides no financial benefit to Newfoundland Power,” cautions Murray.
(Newfoundland Power President and CEO Gary Murray)
In fact, when combined with the 2.25 per cent increase announced Thursday, Murray says the overall average rate increase for customers will be closer to 9 per cent as of July 1, pending approval by the Public Utilities Board.
What’s more, Newfoundland Power also has another application before the PUB which could see an additional 1.5 per cent as of the same date.
“We have a responsibility to inform our customers, and want to provide a fulsome view of the estimated impact of costs on their electricity rates effective on July 1, 2024,” said Murray.
“We know these are challenging times for our customers and we understand that reliable service at affordable rates is more important now than ever. That’s why we are focused on effectively managing all costs that are within our direct control.”
Meanwhile, the Innu Nation is expressing “a lack of faith” in the province for finalizing the rate mitigation plan despite unresolved grievances regarding its portion of revenues from Muskrat Falls.
The band claims rate mitigation will result in the loss of $1 billion from the Innu’s Muskrat Falls Impact Benefits Agreement over the next 50 years.
In a response Friday morning, the government says the Innu Nation was briefed two days before the rate mitigation announcement yesterday.
“Finalization of the rate mitigation announcement and has no impact on the current dispute between the Innu Nation and the provincial government. Both parties continue to discuss this matter.”
The rate mitigation plan stems from the $5.2-billion deal between Ottawa and the province to stabilize rates.
It includes $2 billion in federal financing, transfers to the province equal to what the feds make in interest from its stake in Hibernia, and a $1-billion investment in NL’s portion of the Labrador-Island Link.
