Affordable electricity is essential to our quality of life, health and safety, and is a necessity of modern society. Yet, after nine days of Energy & Utility Board (EUB) hearings in Fredericton that ended Feb. 24, it is clear that the social and environmental considerations implied by our dependence on electricity have little influence over how we manage this essential service.

The EUB is an economic regulator. It is the quasi-judicial stand-in for market competition. Through its decisions, the EUB is to ensure NB Power delivers on its Electricity Act mandate. 

According to the Electricity Act, the EUB is restricted to considering financial costs like earning a just and reasonable return, while managing debt-to-equity levels and ensuring a safe, reliable and economically-sustainable electricity system where rates are stable and predictable. Other than ensuring “equitable access to a secure supply of electricity,” social issues are not considered, environmental effects of our cost-driven decisions have no influence.

This is the framework within which the EUB held hearings into a request from NB Power for an 8.9 per cent rate increase starting April 1. Here’s what the Conservation Council learned:

• We need to get used to rising power rates. In evidence filed with the EUB, NB Power proposes significant rate increases each year to 2027, the date by which the utility is to get debt down to 80 per cent and equity up to 20 per cent.  
• Debt levels are so high, NB Power has little capacity to borrow for capital projects like the Mactaquac dam life extension, to replace coal and oil plants, or to invest in the renewable energy essential to decarbonization. Private sector partnerships will be required, a potential backdoor to privatization of our public utility.
• Most of the proposed rate increase for this coming year is due to fossil fuel price volatility, yet electricity trading logic is driving greater use of fossil power plants resulting in an increased carbon tax liability.

Here’s what we should do:

• Accept that electricity is so essential to our quality of life that it is worth paying for. What we shouldn’t accept is doing too little to keep power bills as low as possible even as rates increase. The legislated cost-based framework means the only way the EUB can approve greater investment in energy efficiency is if the province regulates it. The province does regulate investment in energy efficiency, but at levels so low we can’t reach the households that need it most. We need to amend this regulation so at least 1.5 per cent of retail sales is invested in energy efficiency, rising to at least three per cent by 2030.
• Amend the Electricity Act so social and environmental effects, as well as cost, can be considered in rate setting and capital decisions. 
• Strengthen EUB oversight power. NB Power’s debt load is, in large part, due to political interference forcing the refurbishment of the Point Lepreau Generating Station after the EUB ruled it was not in the public interest, and dictating rate increases averaging 1.35 per cent from 2011 to 2022, according to NB Power’s rate application. The province recently amended the Electricity Act to remove EUB cost oversight of the Mactaquac project. The final decision will now be made by cabinet. Political interference is a concern if the utility is forced to buy small modular reactors without EUB cost oversight.
• Ensure NB Power is more accountable, transparent and dedicated to cost cutting to limit rate hikes. We are all facing financial stress due to inflation and it does not build trust to ask for a raise without demonstrating real cost control.
• Open the door to alternatives to privately-owned generation while we phase out fossil fuel generation in favour of renewable energy. If we want a publicly-owned power system, we need to find ways to get New Brunswickers involved, including through community ownership.
• Provide intervenor funding so non-profit groups can fully participate and represent social and environmental concerns.

We need a modern electricity strategy for this province. The Standing Committee on Climate Change and Environmental Stewardship recently agreed to hold hearings on a clean electricity strategy and to issue recommendations by October 2023. This is a good start, but not enough. We need province-wide hearings, and multiple pathways for citizens to have their say on what happens to NB Power and the kind of electricity system we are willing to pay for.

This article originally appeared in the March 1 edition of the New Brunswick Telegraph-Journal.