Customers on the Labrador Interconnected System (which includes Labrador City, Wabush, Happy Valley Goose Bay, North West River, Sheshatshiu and Mud Lake) are eligible for a one-time bill credit due to adjustments made from Hydro’s 2017 General Rate Application.

Those customers who were active during the period January 1, 2018 – September 31, 2019 are eligible for a 4.3% credit based before tax billings for that period.

Customers are not required to apply for this credit – the bill credit will be automatically applied.   Inactive customers, who were active customers during the period January 1, 2018 – September 31, 2019 may be eligible to receive a cheque for the amount owing.

Please call Hydro’s customer service team at 1-888-737-1296 to learn more.

 

Increased oil costs resulting in higher cost of providing electricity

On September 25, 2019, electricity rate changes for all customers were approved by the Newfoundland and Labrador Board of Commissioners of Public Utilities (the Board).  New electricity rates will go into effect on October 1, 2019.

For customers on the island, the primary driver of the October 1 rate change is increasing fuel costs for the Holyrood generating plant.  Since rates last changed in 2018, there has been a 23% increase in the forecast price of oil used at the plant. Further, there is an increase in the expected volume of oil that is used at Holyrood to reliably operate the province’s electricity system.

In Labrador, increased customer usage and growth is resulting in a rate decrease for most residential customers (on the interconnected system in Upper Lake Melville and Labrador West).

This approval by the Board is the final step in the rate setting process and marks the conclusion of Hydro’s General Rate Application (GRA), which was originally filed in 2017.

Key Points for our Customers:

• The following rate changes for customers will be implemented October 1, 2019:

Island Customers (Hydro and Newfoundland Power):
Most residential customers on the island will see rates increase by approximately 0.8 cents/kilowatt hour (6.4%). This equals about $6.40 for every $100 on an electricity bill.

Labrador Interconnected Customers:
Residential customers on the interconnected system (Upper Lake Melville and Labrador West) will see electricity rates decrease by approximately 0.1 cents/kilowatt hour (3.1%), or a reduction of $3.10 for every $100 on an electricity bill. The average rate for these customers today is 3.1 cents/kilowatt hour.

*Detailed information about rate changes for all customer classes is available here.

• The rate change on the island is driven primarily by increased fuel costs. Today we rely heavily on oil to generate electricity for customers at our Holyrood plant and the forecast price of oil has increased significantly since rates last changed in 2018, from $86 CDN/barrel in 2018 to $106 CDN/barrel for 2019. Detailed information about Hydro’s fuel costs, how the oil price is forecasted, and specific oil requirements to reliably operate the Holyrood plant, are available on our website at nlhydro.com/electricity-rates/oilcosts.

• The following table provides a breakdown of Hydro’s most recent fuel price forecast (for the period from July 1, 2019 through June 30, 2020):
  

  Forecast Price of No.6 Fuel	$75.10 USD/bbl
  Fuel Specification Premium	$  4.13 USD/bbl
  Total Forecast Price of No. 6 Fuel	$79.23 USD/bbl
  March 2019 USD/CAD Exchange Rate	1.3368
  No. 6 Fuel Price Forecast	$105.90 CAD/bbl

• Hydro does not make any profit on the cost of fuel to serve customers. These costs are a direct flow-through to customers, with no mark-up, through a long standing process approved by the Public Utilities Board.

• If Hydro’s fuel cost forecast (both the amount we use and the price) are less than anticipated, rates will be adjusted and customers will receive the benefit.

Increasing fuel costs a significant factor for higher cost of power in 2019

“We know that customers count on us to provide reliable electricity while keeping costs as low as possible, and we understand that customers are concerned about electricity rates. We rely heavily on fuel to operate our electricity system for customers, and the high cost of that fuel is having a significant impact on rates for 2019.”
– Jennifer Williams, President

On September 11, 2019, Hydro received an order from the Newfoundland and Labrador Board of Commissioners of Public Utilities (Board) approving electricity rate changes for customers, effective October 1, 2019.

The estimated electricity rate changes for 2019 were first proposed in a filing to the Board earlier this summer as part of our ongoing General Rate Application (GRA). For 2019, increasing fuel costs to reliably operate the province’s electricity system are having a significant impact on customer electricity rates. Hydro is forecasting an increase in both the amount of fuel that we use as well as a significant increase in the forecast price of fuel since rates last changed in 2018. Fuel cost adjustments occur annually as part of the Rate Stabilization Plan.

As one of the final stages in the rate setting process, the filing was also reviewed by intervenors like the Consumer Advocate, Newfoundland Power and industrial customers. Final electricity rates for most customers are expected in the coming weeks, following final applications by both Hydro and Newfoundland Power to the Board, to approve and implement the rate changes.

Key Points for our Customers:

We estimate the following rate changes for customers will be implemented October 1, 2019, pending final approval by the Board:

• Island Customers:  We estimate that most residential customers on the island will see rates increase by approximately 0.8 cents/kilowatt hour (6.4%). This equals about $6.40 for every $100 on an electricity bill.
  
• Labrador Customers: We estimate that most residential customers on the interconnected system (Upper Lake Melville and Labrador West) would see electricity rates decrease by approximately 0.1 cents/kilowatt hour (3.1%) or a reduction of $3.10 for every $100 on an electricity bill. The average rate for these customers today is 3.1 cents/kilowatt hour. The proposed decrease is largely the result of increased customer usage and customer growth in the region.
• Final electricity rate changes may differ from the estimates provided. We expect to be able to provide final electricity rates (effective October 1, 2019) in the coming weeks. We will provide a further update to customers at that time.
• The rate change on the island is driven primarily by increased fuel costs. Today we rely heavily on oil to generate electricity for customers at our Holyrood plant and the forecast price of oil has increased significantly since rates last changed in 2018, from $86 CDN/barrel in 2018 to $106 CDN/barrel for 2019.
• Hydro uses a long-standing approach, approved by the Board, to forecast the price of No. 6 fuel. If Hydro’s fuel cost forecast (both the amount we use and the price) does not materialize, rates will be adjusted. Any difference between the forecast and actual fuel cost is set aside, with interest, and customer rates are then adjusted through the Rate Stabilization plan each year (typically in July).
• Hydro does not make any profit on the cost of fuel to serve customers. These costs are a direct flow-through, with no mark-up.

You can view more information about fuel costs, how fuel price is forecasted, and historical rate adjustments from the Rate Stabilization Plan here.

Increasing fuel costs resulting in higher cost of power for 2019

“Customers count on us to provide reliable electricity and to keep costs as low as possible, and we know that rising electricity rates continue to be a concern. We rely heavily on fuel to operate our electricity system for customers – the high cost of that fuel today has a significant impact on rates. We continue to pursue opportunities to ensure we’re managing our business as efficiently as possible for our customers.”
– Jennifer Williams, President

Newfoundland and Labrador Hydro (Hydro) submitted a filing to the Newfoundland and Labrador Board of Commissioners of Public Utilities (Board), identifying proposed electricity rate changes for customers effective October 1, 2019.  The proposed rates are based on the findings outlined in the Board Order for the ongoing General Rate Application (GRA) which also includes costs from the annual Rate Stabilization Plan (RSP) adjustment.

Key Points for our Customers:

 Island Customers

• We estimate that most residential customers on the island will see rates increase by approximately 0.9 cents/kilowatt hour (7.6%). This equals about $7.60 for every $100 on an electricity bill.
• The rate change is driven primarily by increased fuel costs. While there are many factors that contribute to the cost of generating and delivering electricity, the majority of the proposed rate increase for customers on the island is related to the cost of fuel. Today we rely heavily on oil to generate electricity for customers at our Holyrood plant.
• The forecast price of oil has increased significantly since rates last changed in 2018, from $86 CDN/barrel in 2018 to $106 CDN/barrel for 2019.
• As requested by the Board, the proposed rate changes also include costs from the annual Rate Stabilization Plan (RSP) adjustment, which is normally implemented on July 1 each year, but this year will be combined with the GRA rate adjustment. The RSP is used to adjust rates to reflect the actual price and amount of oil used each year at the Holyrood Thermal Generating Station. This further adds to the fuel costs included in the current proposed rate adjustment.

Labrador Customers

• In Labrador, we currently estimate that most residential customers on the interconnected system (Upper Lake Melville and Labrador West) will see electricity rates decrease by approximately 0.1 cents/kilowatt hour or a reduction of $3.10 for every $100 on an electricity bill. The average rate for these customers today is 3.1 cents/kilowatt hour. The proposed decrease is largely the result of increased customer usage and customer growth in the region.

These changes are proposed; they are not final and therefore are subject to change. The Board will now review Hydro’s filing and make a final decision about electricity rates for 2019, which is expected later this year. For more information about rate changes for customers in all service areas, please visit: https://nlhydro.com/electricity-rates/

On May 7, 2019, Hydro received an order from the Board of Commissioners of Public Utilities (Board) in relation to our General Rate Application (GRA) filed in 2017. This represents one of the final steps in the GRA process.

We know that the people of Newfoundland and Labrador depend on Hydro to provide safe, reliable electricity and to help carefully manage electricity costs. We take that responsibility very seriously and are focused on managing our operations and our costs responsibly for our customers. Hydro fully respects the GRA process and the decisions of the Board in helping ensure that electricity rates charged to customers are reasonable and reflect the cost of providing service across the province.

Over the coming weeks we will carefully review the order, and then submit a final filing to the Board that provides the updated information requested as well as proposed rate changes. The Board will then review that filing and make a final decision about electricity rates for 2019. We expect a final decision later this year (fall 2019).

The complete order can be viewed on the Board’s website.

Update on revised options for 2019 electricity rates filed with the PUB

On July 20, 2018, Hydro filed revised options for 2019 electricity rates with the Public Utilities Board (Board) as part of its current general rate application. At that time, Hydro put forward a rate smoothing option for consideration by the Board – a rate stability rider – that could be applied to current electricity rates to help smooth the transition to post-Muskrat Falls rates. Information included in the filing was intended for consideration only, and to help inform any decisions to further assess or pursue this option.

On August 3, the Board confirmed that information related to the rate stability rider will not be considered with respect to rate setting in Hydro’s 2017 General Rate Application. Additional information is available on the Board’s website.

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July 23, 2018 – As part of our ongoing rate application and following negotiations with intervenors (Newfoundland Power, Industrial Customers and the Consumer Advocate), Newfoundland and Labrador Hydro (Hydro) has filed additional options with the Board of Commissioners of Public Utilities for 2019 electricity rates.

Key Points:

• To help offset future rate impacts of Muskrat Falls for customers, Hydro originally proposed that savings gained by bringing power to the island from Labrador or Nova Scotia, be set aside to help smooth future rates when Muskrat Falls comes into service.
• Negotiations have been ongoing between Hydro, the Consumer Advocate, Newfoundland Power and other intervening parties. On July 16th, all parties agreed that Hydro’s original rate smoothing option should not be considered as part of this application.
• The original proposal was expected to save approximately $170 million to put towards stepping in projected rate increases when Muskrat Falls is in service.
• Through settlement negotiations, there is a reduction in Hydro’s operating and depreciation costs originally requested in our general rate application, of over $15 million.
• As a result of the agreement, estimated electricity rate increases for most residential customers on the island effective January 1, 2019, are 1.2%. This would result in an average increase of 0.15 cents/kilowatt hour for residential customers.
• Hydro has put forward another rate smoothing option for consideration by the Board – a rate stability rider. The rate stability rider could be applied to current electricity rates to help smooth the transition to post-Muskrat Falls rates. Information included in the filing is intended for consideration only, and to help inform any decisions to further assess or pursue this option.
• For 2019, the approval of a rate stability rider could result in an additional rate increase of 6.5% (7.7% total) on January 1, 2019. Information filed by Hydro also identifies the potential stepped rate increases that would be required in future if such a rider was applied during the transition to post-Muskrat Falls rates, with assumptions made on the mitigated rate.
• A final decision on 2019 electricity rates is expected by the Public Utilities Board later this year.

Quote:

Dawn Dalley
Vice President, Corporate Affairs and Regulatory Services

“We hear the concerns being voiced by our customers today about electricity rates. While the estimated rate increase has been significantly reduced for 2019, we know customers cannot bear the steep increase predicted when Muskrat Falls comes in service. Hydro has been working hard to carefully manage our costs, however we still firmly believe that more measures are needed today to help customers manage the impact of future rates. We, however, also respect the input of the intervenors in our rate application and we have proposed another option for consideration by the Board of Commissioners of Public Utilities.”

On July 20, 2018 Hydro filed revised options for 2019 electricity rates with the PUB. These options were filed as a result of negotiations with the Consumer Advocate, Newfoundland Power and other intervening parties through the current rate application.

The revised options no longer include the rate smoothing measure that Hydro originally proposed in its application to the PUB, where savings gained by bringing power from Labrador or Nova Scotia could be used to help smooth future rate increases for customers when Muskrat Falls is in service.

Estimated customer electricity rate increases for January 1, 2019, have been lowered from 9.4% for most residential customers on the island, to 1.2%. A final decision on electricity rates for 2019 is expected by the Public Utilities Board later this year.

More details are available here and on the PUB website at www.pub.nf.ca

Update:

July 1 electricity rate adjustments for Hydro’s isolated rural customers were approved by the Public Utilities Board on June 29, 2018. For more information or to learn why rates are changing, please visit the Electricity Rates section or click here.

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June 27, 2018 – Hydro adjusts rates every year on July 1 based on the price of oil used to generate electricity at the Holyrood Thermal Generating Station, the amount of electricity used by customers, and the annual amount of water we have for hydroelectric generation.  This is a routine, annual adjustment called the Rate Stabilization Plan (RSP) and was created to ensure that customer’s rates reflect the actual cost of electricity generation from year to year. This July, rates will be implemented for the annual RSP adjustment as well as interim rates arising from Hydro’s General Rate Application (GRA).

Key Points

• We estimate that most of Hydro’s residential customers will see an increase of approximately 6.6% effective July 1, 2018. For the average homeowner on the island, this would be an increase of about $12 per month on their electricity bill (based on average consumption before taxes).
• The majority of this rate increase is related to costs that were deferred through the Rate Stabilization Plan in 2017. Although we expect to use less fuel in the future as we bring power to the island from Labrador or Nova Scotia, last year a large portion of the RSP adjustment was deferred in an effort to reduce the overall impact on customers at that time. These deferred costs account for 4.2% of the total increase.
• Interim rates account for approximately 2.6% of the total increase, and ensure that costs of operating the system can be recovered until the GRA process is complete and final rates are approved by the Public Utilities Board.
• These rates were approved by the Public Utilities Board for residential and commercial customers of Newfoundland Power, and will also apply to Hydro’s island interconnected and L’Anse Au Loup customers.
• Rates for isolated rural customers on both the island and in Labrador are not yet finalized, but we estimate that these customers will also see a 6.6% and 5.5% increase this year, respectively.
• Labrador Interconnected customers, whose power is supplied from the hydroelectric generating facility at Churchill Falls, will not see their rates change on July 1.

Quote
“We know that any rate increases are difficult. We have carefully examined costs and opportunities to reduce the overall impact of this rate change on our customers while ensuring we can deliver safe, reliable power across the province.”
Dawn Dalley, Vice President, Regulatory Affairs & Corporate Services

Hydro is currently before the Public Utilities Board as part of its General Rate Application to set electricity rates for 2018 and 2019. This process has been ongoing since July 2017 and a hearing is scheduled for early 2018 where intervenors have the opportunity to discuss issues to ensure the Board can make a final decision regarding customer electricity rates. Since filing, Hydro has answered over 950 requests for information on its application.

Hydro’s GRA proposes an increase in electricity rates of 6.6% in 2018 and 6.4% in 2019 for most residential customers on the island – a combined impact of 13.0% over this time period.

In addition to the 2017 General Rate Application, a separate rate process occurs every July – this is the Rate Stabilization Plan (RSP) adjustment. The RSP is the annual adjustment to deal with fuel cost variances. It follows a separate process laid out by the Public Utilities Board. Because there is a large degree of uncertainty in projecting any change in rates involving the cost of oil; this process is typically conducted in the late spring using the April oil price forecast. Although some forecasts on the potential RSP change were developed upon filing Hydro’s GRA, Hydro has been clear that there is still a large degree of uncertainty as to what the RSP rate change will be this year, due to the volatility in world oil prices.

We know that all rate increases are difficult for customers. That is why the application proposed spreading the upcoming increase over two years. It is also well known that Muskrat Falls will have a significant impact on electricity rates. The Off Island Purchases Deferral Account is a recommendation to help smooth in future rate increases, proposing that savings gained by bringing less-expensive power to the island on new transmission lines from Labrador, or Nova Scotia, be set aside and given back to customers when Muskrat Falls comes into service. Hydro does not benefit from this application and we are very open to any rate mitigation options that may benefit our customers.

You can read Hydro’s original GRA press release and background information from July, which outlines Hydro’s 6.6% in 2018 and 6.4% in 2019 rate request: https://nlhydro.com/electricity-rates/regulatory-information/

 

St. John’s, NL – Today Newfoundland and Labrador Hydro (Hydro) will file an application with the Newfoundland and Labrador Board of Commissioners of Public Utilities (PUB) proposing new electricity rates for 2018 and 2019.

Much of the province’s electricity system was built in the 1960s and 70s, and requires considerable maintenance, upgrades or replacement. As part of our commitment to provide safe, reliable service to our customers today and in the future, we must invest in the province’s electricity system and take steps to prepare for interconnection with the North American grid.

“We know customers are counting on us to manage electricity costs as much as possible,” said Dawn Dalley, Vice President of Regulatory Affairs and Corporate Services at Hydro. “We have made broad changes at Hydro to improve our operations and we are pushing for continued efficiencies. We also know that customers need reliable service, so we continue to invest in our equipment and we are doing the necessary preparation for future changes coming to the electricity system.”

The application filed with the PUB proposes increases in electricity rates between 6.0% and 6.6% for most residential customers on the island and on the interconnected system in Labrador in 2018 and 2019. This represents an additional 0.2 to 0.9 cents per kilowatt hour – for most customers this will mean an increase of $6 to $6.60 for every $100 on a monthly bill.

“We understand that any increase in rates can be a challenge for customers,” said Dalley. “We have proposed spreading the upcoming increase over two years to lessen the impact and we remain focused on controlling costs while ensuring reliable power for customers. We have also made recommendations to help offset future rate increases as new equipment and facilities, like Muskrat Falls, come into service.”

It is well known that Muskrat Falls will have a significant impact on electricity rates. To help offset future rate impacts for customers, the application proposes that any savings gained by bringing less-expensive power to the island on new transmission lines from Labrador, or Nova Scotia, be set aside and given back to customers in future rates when Muskrat Falls comes into service.

The application to the PUB is the first step in the regulatory process to set electricity rates in the province. The PUB will review the application to ensure that the rates proposed are reasonable, and public hearings will take place. Once the process is complete, the PUB will make a final decision on electricity rates for 2018 and 2019.

Details of the application, including proposed rates for customers are found in the attached backgrounder and fact sheet found here: https://nlhydro.com/electricity-rates/regulatory-information/

 

 

 

 

 

Distribution of RSP Refund for Current Customers to Begin

(St. John’s, NL): Newfoundland Power and Newfoundland and Labrador Hydro (Hydro) wish to advise that the distribution of the Rate Stabilization Plan (RSP) refund to current customers will begin on February 15, 2017. Approximately 200,000 current customers will initially receive refunds, representing approximately 85% of the RSP balance.

All Newfoundland Power customers and Hydro’s Island Interconnected customers who have used, and paid for, electricity between January 1, 2007, and August 31, 2013, are eligible for this refund. Current customers will receive their RSP refund first, and then attention will shift to former customers who had electricity accounts during the refund period.

The actual amount of the refund for each customer will be variable since the refund will be calculated based on an individual customer’s electricity usage during the refund period. Eligible customers will receive a refund of 0.364 cents per kilowatt hour (kWh) used. Both utilities have developed online and phone self-service options for customers with active electricity accounts to provide them with the actual amount of energy used during the refund period and the refund amount. By way of example, a residential customer with electric heat uses, on average, approximately 1,534 kWhs of electricity per month and would receive an average monthly refund of approximately $5.58 for each electricity bill that was paid during the refund period. A residential customer without electric heat uses, on average, approximately 837 kWhs of electricity each month and would receive an average monthly refund of approximately $3.05 for each electricity bill that was paid during the refund period.

The refund for each customer will first be credited against any existing balance on their electricity account. A cheque will be issued to the customer whose name is on the electricity bill for any remaining amount. Refunds will be adjusted for the amount of Harmonized Sales Tax (HST) and the Provincial Government’s Residential Energy Rebate (RER) that was in effect during a portion of the refund period.

Hydro’s RSP surplus refund to customers is forecast to be an estimated $138 million as of January 31, 2017, including interest. Approximately $129 million of this is attributable to Newfoundland Power’s customers, and approximately $9 million is attributable to Hydro’s customers. The taxes associated with the RSP refund represent an additional amount of approximately $16 million for customers.

For more information regarding the RSP refund or to access the self-service tools, please visit newfoundlandpower.com/refund or call 1-800-663-2802 OR visit nlhydro.com/refund or call 1-888-737-1296. Information will also be included in customers’ electricity bills.

 

Newfoundland Power is the primary distributor of electricity on the island portion of Newfoundland and Labrador, and purchases 93% of its energy needs from Hydro. With a customer base of approximately 264,000 accounts, Newfoundland Power is committed to safety, dedicated to the highest level of customer service and delivers reliable electricity at the lowest possible cost.

Newfoundland and Labrador Hydro is the primary generator of electricity in Newfoundland and Labrador. The company has an installed generating capacity of 1,792 megawatts. Over 80% of the energy generated is clean, hydroelectric generation. Hydro sells its power to utility, industrial and 38,000 residential and commercial customers in over 200 communities across the province. The company is committed to operational excellence while delivering safe, reliable, least-cost electricity.

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For further information, please contact:
Michele Coughlan, Public Affairs
Newfoundland Power Inc.
Phone: (709) 737-2821 / Cell: (709) 682-1470
mcoughlan@newfoundlandpower.com

Erin Squires, Communications
Newfoundland and Labrador Hydro
Phone: (709) 737-1311 / Cell (709) 697-1186
erinsquires@nlh.nl.ca

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Backgrounder

• Electricity rates are set based on a forecast of how much electricity is anticipated to be needed and the corresponding price of oil. Because these two things are subject to change, Hydro has a Rate Stabilization Plan (RSP) so rates can be adjusted annually to account for the actual amount and cost of oil used to generate electricity at the Holyrood Thermal Generating Station.
• The amount of electricity that was expected to be required by certain industrial customers on the island was significantly reduced with closures related to the pulp and paper industry. This produced significant savings in anticipated fuel costs. As a result, a balance accumulated in Hydro’s RSP account between 2007 and 2013. The balance continues to earn interest until customers are refunded. This balance is now owed to eligible Newfoundland Power and Hydro customers.
• Approximately 268,000 Newfoundland Power customers and approximately 25,000 Hydro customers are eligible for a refund under the RSP Customer Refund Plan.
• Neither utility has previously undertaken a refund plan of this size or complexity considering the number of customers impacted, the length of time the RSP balance has been growing and the significant amount of money involved.