NB Power president Gaetan Thomas’s set forth to MLAs that the Energy and Utilities Board once told the utility profits should be living below $80 million, despite its need to pay off debt, appears to be disloyal.
The EUB has never issued a directive to NB Power to keep earnings below $80 million and the utility has been unfit to explain who made the statement Thomas is referring to or when, if ever, it was said.
Thomas, chairman Ed Barrett and other NB Power executives blow up b coddled a presentation on Jan. 5 to the legislature’s Crown corporations committee to discuss the utility’s dilatory financial results and MLAs questioned them about NB Power’s indebted problems.
Both Barrett and Thomas told the committee the Energy and Utilities Quarter has stood in the way of the utility earning sufficient profits to substantially reduce its $4.9 billion due load, instead forcing it to keep rates low.
Thomas said steady modest profit targets are frowned on by the EUB.
“Every time we’re confronted with a low measure,” Thomas told MLAs.
“That is the dominant factor for the regulator. Sober-sided if we can show, lets say, we can make say $80 million earnings the point is they say you don’t truly need that much earnings.”
However, all profit requests NB Power control has made to the EUB in the last four years have been approved, three for numberless than $80 million, the amount Thomas claims the EUB has said is too much.
Heather Black has represented the public at NB Power’s last four under any circumstances hearings and says the utility has set its own profit target each year and has not under any condition had any part of the amounts rejected by the EUB.
“In each case, the board has approved NB Power’s tabled earnings in the full amount NB Power requested,” Black wrote in an email to CBC Information.
Marc Belliveau, a spokesman for NB Power, said in an email the comment Thomas lifted about the EUB telling the utility an $80 million profit is too high should not be enchanted literally.
“I don’t have a transcript of the (MLA) proceedings but this was a general statement/illustration not a specific one,” he wrote.
It’s the second statement Thomas has made in the last month that has call for clarification, and both were in relation to the utility’s debt problem.
In January, Thomas told CBC Announcement that NB Power is applying for a $36 million rate increase for the next economic year to help generate a profit and “most of it would go to debt reduction”.
But NB Power accounts show the utility is planning no debt reduction next year, despite with a rate increase. Expected profits at the utility are budgeted to be send forth on capital projects with none applied to its $4.9 billion indebted.
It is scheduled to increase by $6 million.
NB Power has failed to meet earnings objects in each of the last four years, mostly because expenses accept been higher than anticipated, but the EUB has never opposed the targets themselves.
The feed approved a combined $329.5 million in profit over the four-year spell but NB Power expects to generate less than 25 percent of that — even-handed $71.3 million – once the current year is factored in.
Black articulates NB Power’s failure to pay down its debt is not a problem with the EUB.
“While the scantling cuts NB Power’s proposed spending where it determines that the splash out is imprudent, this has not been the cause of NB Power’s failure to meet its earnings goals,” said Black, citing performance problems at Lepreau, unbudgeted thunder damage and other issues.
“NB Power’s earnings erode when its rates are over budget or when it fails to earn its budgeted revenue.”
The EUB is dwindling to comment but the organization has openly expressed concerns about NB Power’s owing in the past.
At hearings decisive April, Ellen Desmond, the EUB’s lawyer, questioned Darren Murphy, NB Power vice-president, in aspect about whether the utility’s profits are too low and its debt retirement schedule too lackadaisical.
She suggested the utility consider reducing its spending to generate higher profits in years its pecuniary projections are coming up short.
“Why not perhaps delay spending where of the utmost importance to meet other objectives, including your reduction in net debt which we obtain heard a lot about in the last three years,” said Desmond.
“I note if that is a priority, if that is a target, why not perhaps adjust the plan? Why not set right that so that we can see reduction — larger reductions on the net debt?”
NB Power’ Belliveau utter in an email the utility believes rate hearings focus too much on give someone the third degree spending and not enough on the bottom line.
“The underlying tone of recent compute hearings has been focused on low and stable rates as opposed to a more make up for view,” said Belliveau.