The head of Saint John Energy says there is a lot of uncertainty about what the Liberal commitment to freeze NB Power rates would mean for them.
The utility buys its electricity from NB Power at wholesale rates, which would not be part of the freeze.
President and CEO Ray Robinson told our newsroom what could happen if wholesale rates are not frozen.
“The impact is either our residential rates will have to increase, thus Saint John area residents will be unduly affected, or the financial viability of the municipal utility here in Saint John is not sustainable,” Robinson said.
If the wholesale rates are frozen, he said that means their costs of energy supply will remain the same, meaning they would not have to increase residential rates.
A re-elected Liberal Government will freeze power rates for residential and small-business customers for four years. pic.twitter.com/qcZigKYY47
— Liberal Party of NB | Parti Libéral du N.-B. (@NBLA_ALNB) August 29, 2018
Robinson said the cost of buying energy makes up about 85 per cent of their operational costs.
“If those costs continue to escalate at some amount, yet we’re not able to recover additional revenues from those costs, that puts Saint John Energy into a mode of unsustainability,” he said.
A Liberal spokesperson said in an email to our newsroom the freeze would also apply for municipal utilities on the power they buy for residential or small business customers, but offered no other details.
