Understand Your Rates
We know customers continue to be concerned about electricity rates, which is why our priority is to provide safe, reliable, cost-conscious services while meeting our commitment to a net-zero electricity system.
See below for answers to some common questions about electricity rates.
Why do rates change annually?
Rates are adjusted annually to reflect changes in the cost to deliver electricity to customers. The rate change is required to recover the cost to provide that service, as well as that of Newfoundland Power.
How were the new rates determined?
Changes to Hydro’s customer rates follow Hydro’s Rules and Regulations, Policies for Automatic Rate Changes. Rate changes must be approved by the Public Utilities Board. When Newfoundland Power changes its electricity rates, Hydro is required to automatically adjust rates for many of its customer classes. This means either matching our rates to those of Newfoundland Power customers or adjusting rates by the comparable average rate change.
An increase to the wholesale rate we charge to Newfoundland Power was approved effective July 1. This resulted in a 2.3% increase to the average customer bill charged by Newfoundland Power. This amount reflects the Government of Newfoundland and Labrador’s rate mitigation plan which targets rate increases attributable to Hydro’s costs to 2.25% for residential customers on the Island Interconnected System each year up to and including 2030.
Newfoundland Power were also approved for a 4.7% average customer bill increase reflecting an 8.5% increase resulting from their General Rate Application offset by a 3.8% decrease to limit the total rate increase for customers on July 1 to 7.0%. The average rate increase varies by customer class.
Which rates changed on July 1, 2025 and by how much?
Rates for our Island Interconnected, L’Anse au Loup and Isolated Rural customer rates are changing, effective July 1, 2025.
Residential
• Island Interconnected Customers – 7.1% average increase
• Island Diesel Customers – 7.3% average increase
• Labrador Diesel Customers – 3.8% average increase, adjusted for Northern Strategic Plan
• L’Anse au Loup Customers – 4.3% average increase, adjusted for Northern Strategic Plan
• There is no change in electricity rates for Labrador Interconnected system customers.
Commercial (General Service)
• Increasing from 6.4 to 7.0% depending on rate class and usage
Why are customers paying more, when Hydro reported a profit this year?
Electricity rates are established to recover the cost of providing electrical service to customers. Following the announcement of the Province’s Rate Mitigation Plan in May 2024, Hydro will be using funds from across all our areas of business to reduce the costs for our customers.
A substantial portion of the profits we generated in our core operations during 2024 were used to mitigate customer rates. This mitigation is done in line with the Province’s rate mitigation plan that was announced in May of 2024.
The Muskrat Falls Plant and Labrador Transmission Assets were commissioned in November 2021 and the Labrador Island Link was commissioned in April 2023.
Rate Mitigation was designed to allow Hydro to recover a portion of the costs related to those assets from customers and to recover the remaining costs through the Province’s Rate Mitigation plan.
The Government of Newfoundland and Labrador’s Rate Mitigation Plan was introduced to minimize how much of those costs Hydro would recover from customers, with Hydro instead using its own funds to cover much of the cost to customers. The portion customers pay in 2025 will be less than 15% of Hydro’s annual cost of Muskrat Falls.
Hydro is committed to mitigating rates using our own funds up to 2030 and are using funds that we generate from our business to do so.
What does rate mitigation mean for customers?
All Island Interconnected customers will receive the rate mitigation benefit. For most residential customers, this means Hydro’s portion of the annual rate increase is targeted at no more than 2.25% up to and including 2030.
Example: If your equal payment plan is $300 a month, you’ll pay almost $7 more after July 1, 2025 towards recovering costs related to the Muskrat Falls project. Without action from the Provincial Government and Hydro, this would have been an extra $200 a month. Over the course of the year, this is approximately $2,300 less than had the rate not been mitigated.
Who pays for the rest of the Muskrat Falls cost?
The exact sources and amounts of funding may vary each year, but essentially the difference will be funded by Hydro. Since Commissioning of the Project assets, Hydro has been responsible for paying the cost of the Project assets—approximately $740 million each year.
What were the rate adjustments from past years?
2025 – increase of 7.0%
2024 – increase of 7.0%
2023 – increase of 6.9%
2022 – decrease of 0.3%
2021 – increase of 2.5%
2020 – no change (due to pandemic, one-time bill credit applied on customers’ bills)
2019 – increase of 7.6% (includes rate change resulting from most recent General Rate Application)
2018 – increase of 4.2%
2017 – increase of 8.1%
2016 – decrease of 9.5%
2015 – decrease of 9.7%
2014 – increase of 4.0%
2013 – decrease of 8.0%
How to read your Hydro Bill
View the sample residential bill below for an explanation of each section of your bill. For detailed billing and account information, sign into myNLhydro, visit nlhydro.com, or contact us at customerservices@nlh.nl.ca or 1-888-737-1296.
Understanding your bill (pdf)
How to save money on your bill
