Closing arguments begin with a call for an 8.9% increase in benefit rate
NB Power’s 8.9 percent rate hike motion enters its final stages in Fredericton today with final arguments before the New Brunswick Energy and Utilities Board. Stiff opposition, led mainly by JD Irving Ltd., has left the result in doubt.
Three attorneys working for the forestry, manufacturing and transportation company dominated questioning of witnesses over seven days of hearings and are likely to lead calls for a reduction, if not cancellation, of the increase, even as the utility’s growing financial problems weigh the Forcing customers to pay will increase in the coming years.
JDI’s lead counsel in the case, Nancy Rubin, a partner of Stewart McKelvey in Halifax, has built a case where the increase is not essential for the coming year, even if it means addressing the growing debt problems of NB Power is postponed to future years.
“As a private individual customer or as a business operating in New Brunswick, do you think that those customers would prefer to have that cash on hand now for their own capital, an investment, or their day-to-day expenses, rather than prepaying it for a future? Debts?” Rubin asked supply expert Robert Knecht on Tuesday and gave an outlook on the company’s core message to today’s board of directors.
Between customers paying now or later for NB Power’s significant financial woes, JDI’s position appears to be that later is better.
Unsurprisingly, NB Power tops the fee for fully granting the raise.
On the opening day of the hearing, the utility company’s acting president, Lori Clark, made her case for the need for the 8.9 percent increase, citing inflation, rising interest rates and operational problems.
“In a single year, the cost of fuel and electricity needed to serve customers in New Brunswick has increased by $102.8 million,” Clark said at the hearing.
“This is mainly due to market price increases for natural gas, heavy oil and electricity.”
But the utility has struggled to defend the credibility of those numbers since they were compiled a few months ago in early June.
In a Perry Mason moment during last Thursday’s cross-examination, JDI attorney Conor O’Neil won an admission from the utility that the utility had since compiled but not shared with the hearing at least two internal updates of those projections.
O’Neil persuaded the board that the updates should be passed despite objections from NB Power attorney John Furey, a decision that took the hearing in an unexpected direction.
The updated forecasts were released by NB Power on Tuesday of this week but performed both ways.
They confirmed JDI’s suspicions that NB Power’s budget figures were out of date and that the company’s revenue and expenses for the next year are better than claimed.
However, they also revealed that NB Power’s year-to-date has included significant losses that unexpectedly pushed net debt by $380 million to $5.3 billion as of Dec. 31.
Independent utility experts Robert Knecht and Dustin Madsen both expressed shock at the rapid deterioration in NB Power’s financial health in recent months, revealed by the financial updates.
“When I saw it for the first time, I didn’t believe it,” said Knecht.
“I’m just as surprised as Herr Knecht,” said Madsen
“I agree that the situation is getting worse.”
EUB Chair Francois Beaulieu said the board was unsure how to deal with all the new information and asked all sides “to provide comments on the issue during closing arguments”.
These begin at 9:00 this morning.