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PUB orders more information from N.L. Hydro

Hydro Place in St. John’s, headquarters of Nalcor Energy and subsidiary Newfoundland and Labrador Hydro.
Hydro Place in St. John’s, headquarters of Nalcor Energy and subsidiary Newfoundland and Labrador Hydro.

Board hopes to avoid delay in hearing; schedule under discussion

Nalcor Energy’s regulated subsidiary, Newfoundland and Labrador Hydro, is being ordered by the Public Utilities Board (PUB) to produce more information, before any public hearing can be held or a decision made on new power rates.

This is in relation to the ongoing General Rate Application before the regulator, seeking a 6.6 per cent increase for 2018 and 6.4 per cent increase for 2019.

A delay, paired with a demand for documents and responses to certain questions, was requested by Consumer Advocate Dennis Browne. Browne has been publicly condemning what he identified as a 23 per cent hike for consumers before HST coming by Jan. 1, 2019 — a combination of the requested rate increase and changes from the province’s rate stabilization plan.

He found support on his recent application for more information from Newfoundland Power and, on several points, the Island Industrial Customers (an intervener representing a handful of industrial power users on the island).

After hearing from all parties, including concerns from Hydro on a delay of process, the PUB has ordered more information be produced. It includes information related to the island portion of the province being connected to the North American grid for the first time, as the Maritime Link comes online.

The Labrador-Island Link, along with the Maritime Link connection between the island of Newfoundland and Nova Scotia, is expected to be in service in mid-2018.

“Hydro has been sent back to do its homework,” Browne told The Telegram Friday, pleased with the decision.

Hydro has been ordered to provide its expectations regarding the off-island purchase of power in the near-term, maintenance costs for the Labrador-Island Link, what off-island purchases could mean for the use of the thermal power plant at Holyrood and more, related to the overall cost of service.

The PUB did not order all information being sought by the Consumer Advocate, saying it was not persuaded that it would contribute to the Board’s understanding of Hydro’s rate proposals.

Having reviewed the decision, Browne said he and his office were satisfied much of what was sought will be included in the documents and responses now ordered by the PUB. 

“The Board recognized that this (Consumer Advocate) application has delayed the scheduled start of the hearing of Hydro’s general rate application and that production of additional information may result in further delays. Nevertheless the Board is satisfied that, in the circumstances, additional information should be filed,” the PUB states in the order.

The public hearing was scheduled to start at the end of January. The schedule is now under review.

The Consumer Advocate said he found the original application for the rate increases under review to be incomplete, lacking evidence. But he also said the application is just one concern.

There is an ongoing concern now for costs and regulation as the Muskrat Falls hydroelectric project comes online.

“Everyone’s time would be better spent if we all start planning for the future,” Browne said, adding he would like to see a reference made to the PUB, to address the concerns.

For its part, Hydro is co-operating with the Board to determine next steps, according to a statement in response to questions.

"Hydro fully understands that our customers are concerned about electricity rates and we share those concerns. The Off Island Deferral Account was one option proposed by Hydro to help smooth in future rates related to Muskrat Falls. Hydro wishes to reiterate that its proposal would have resulted in no benefit to the company as all funds in the proposed deferral account were intended to be returned to customers under the Board's oversight," the statement reads.

"However, as stated by the Board, 2018 and 2019 are transition years. As we move towards a fully interconnected electricity system there continues to be a great deal of uncertainty, therefore we understand both the Consumer Advocate, and other intervenors’ requests for more information." 

(NOTE: Updated to include N.L. Hydro response)

ashley.fitzpatrick@thetelegram.com

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