A rate hike isn’t the only thing NB Power is asking for at this year’s Energy and Utilities Board hearings.
The utility also wants approval for a new levy to help deal with the high costs of extreme storms.
The province has seen more frequent and severe weather events in recent years, like last January’s ice storm, which cost the utility about $30 million.
“That would have led to power outages, led to a massive power restoration event that would certainly not be something that we would budget as part of due course in our revenue requirement,” says Darren Murphy, NB Power’s chief financial officer.
Murphy appeared before the EUB hearing this week and explained how the rate mechanism would work.
“[The costs] would get collected for one year, two years, three years, five years, whatever the board would decide, and then when those costs are collected, that goes away, so then customers are left with the base cost again.”
The costs from major storms are currently passed on through rate increases, which never disappear, whereas Murphy says the levy would end once the storm’s costs are paid for.
Some utilities set aside money for extreme events based on five-year averages, and when asked why NB Power doesn’t do that, Murphy says they’d rather know the exact cost instead of trying to estimate.
“Then we’ll know exactly what we have to collect from customers. We won’t worry about are we over collecting or under collecting based on a provision, we’ll know exactly how much we’ll have to collect.
If approved, the EUB would decide which costs are eligible and how they’d be collected.
