April 12, 2013 – Newfoundland and Labrador Hydro (Hydro) filed an updated fuel price projection for the Rate Stabilization Plan (RSP) with the Newfoundland and Labrador Board of Commissioners of Public Utilities (PUB) today. This will result in a decrease in electricity rates to Newfoundland Power, and therefore most electricity consumers.
“We adjust rates every year based on the annual amount of water we have for hydroelectric generation and the price of oil used to generate electricity at the Holyrood Thermal Generating Station. This adjustment ensures that rates reflect the actual cost of electricity generation,” said Rob Henderson, Vice President, Hydro. “This July, consumers will receive a decrease in electricity rates, which is due to lower than forecast cost of oil for the Holyrood plant and higher production from our hydroelectric generating plants over the past year due to the annual water availability.”

Excluding any rate changes approved by the PUB for Newfoundland Power, the RSP adjustment for most electricity consumers will result in an overall average decrease of about eight per cent, effective July 1, 2013. The actual amount of the rate change will vary, depending on customer category and the amount of electricity used.

The amount of water available for hydroelectric generation increased over forecast last year. Thermal production from the Holyrood plant was also down over the last 12 months compared to the previous year. In addition, the fuel price projection used for setting electricity rates dropped from $119 per barrel for the 12 months ending in June this year to $106 per barrel for the next 12 months, beginning in July 2013. Combined, these factors will result in a decrease in rates to consumers.

“While actual fuel prices were lower than projected over the past year, which was beneficial to consumers, the longer-term outlook is continued increases in prices and growing consumption of fuel at Holyrood due to the increasing electricity demand,” said Henderson. “The development of Muskrat Falls will avoid future exposure of growing dependence on fuel and the related increasing and volatile costs for electricity consumers, while at the same time significantly reducing our greenhouse gas emissions.”