NB Power’s request for an 8.9 percent rate hike enters its final stages today in Fredericton with closing arguments before the New Brunswick Energy and Utilities Board. Fierce opposition, mainly led by JD Irving Ltd., has cast doubt on the outcome.
Three lawyers acting for the forestry, manufacturing and transportation company dominated the questioning of witnesses during seven days of hearings and are likely to make calls for the pay rise to be cut, if not completely scuttled, even as the growing financial problems of forcing the utility to pay customers more in future years.
JDI’s lead attorney on the case, Nancy Rubin, a partner of Stewart McKelvey in Halifax, has built a case whose raise isn’t specifically needed for next year, even if it means tackling NB Power’s growing debt burden. be postponed to the coming years.
“Do you think those customers, whether as an individual residential customer or as a business operating in New Brunswick, would rather hold that money now for their own capital, an investment or their day-to-day expenses than prepay for a future debt?” Rubin asked utility expert Robert Knecht on Tuesday, anticipating what will likely be the company’s core message to the board today.
Between customers paying now or paying later for NB Power’s significant financial problems — JDI’s position seems to be better later that way.
It is therefore not surprising that NB Power is responsible for granting the increase in full.
On the opening day of the hearing, the utility’s acting president, Lori Clark, argued for the need for the 8.9 percent increase, citing inflation, rising interest rates and operational concerns.
“In one year, the cost of fuel and purchased power required to supply customers in New Brunswick has increased by $102.8 million,” Clark told the hearing.
“This is largely due to market price increases for natural gas, heavy fuel oil and electricity.”
But the utility has struggled to defend the reliability of those numbers since they were compiled several months ago in early June.
In a Perry Mason moment during cross-examination last Thursday, JDI attorney Conor O’Neil won an admission from the utility that at least two internal updates of those projections had since been compiled by the utility, but had not been shared with the hearing.
O’Neil convinced the board that the updates should be skipped over objections from NB Power attorney John Furey, a decision that took the hearing in unexpected directions.
The updated projections were released by NB Power on Tuesday this week, but cut both ways.
They confirmed JDI’s suspicion that NB Power’s budget numbers were out of date and that the company’s revenues and expenses for next year are better than claimed.
But they also showed that NB Power’s current year brought significant losses, unexpectedly increasing its net debt by $380 million to $5.3 billion as of December 31.
Independent utility experts Robert Knecht and Dustin Madsen were both shocked by the rapid deterioration in NB Power’s financial health in recent months, as evidenced by the financial updates.
“When I first saw it, I didn’t believe it,” Knecht said.
“I’m as surprised as Mr. Knecht,” Madsen said
“I agree that the position is deteriorating.”
EUB president Francois Beaulieu has said the board is unsure how it will handle all the new information and asked all parties “to submit comments on this matter during closing arguments”.
They start this morning at 9am.