Hydro’s statement regarding General Rate Application and 2018/2019 electricity rates

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/