SUMMARY

Since 2002, power rates have increased five times. Should the 13% raise requested by NB Power be accepted, that would mean that low-income people will have had a 30% increase in their electricity bill in four years. To add a 13% increase in electric rates on our power bills on April 1 st is way beyond what we can afford. On top of the kilowatt use, NB Power will probably want to increase both the service charge and the hot water tank renal by 13%. This is unacceptable, as these items have not been affected by oil price rise on the world market.

If NB Power is allowed to impose huge increases in their rates, this will mean less money to pay rent, buy groceries, pay for transportation, etc.  If we don't pay our electricity bill, our power will get cut off, no matter what time of the year it is.  If we don't pay our rent, we get evicted. If we don't have enough money for groceries, we become malnourished and end up getting sick. "Equalized billing" is not the answer for those of us on social assistance. We would have even less money after the $110-fuel supplement starting in November is dropped after May 1st.  The level of this supplement is insufficient. The Common Front for Social Justice has asked that it be raised to $125 per month and that it be extended to all people on social welfare who heat their residence, including those who own their home.

It is publicly known that when the provincial government and NB Power made arrangements to purchase orimulsion from Venezuela, there was breach of contract by the government of that country. When the 2-million dollar lawsuit was dropped, this made many New Brunswickers angry. These deals were not made in consultation with the people of New Brunswick. It was both NB Power and the provincial government, which goofed in this deal. There needs to be more accountability in the management of NB Power. We are not happy with the big bonuses given to the President and top executives of NB Power.  It is time they do their share to reduce the debts of this corporation.

Members of the Common Front for Social Justice say that New Brunswickers living on a small income will be seriously hurt if the 13% increase requested by NB Power is granted.  We urge the Public Utilities Board to seriously take the four following recommendations into consideration:

•  Service charges, hot water tank rentals and other services should not be increased by more than the rate of inflation, which is between 2% and 2.5%, not the 13% requested by NB Power.

•  The government of N. B. should remove the HST from such an essential service as electricity.  Many other groups have voiced this recommendation.

•  The government of N. B. should give an electricity supplement to offset the hikes demanded by NB Power. It should be extended to all households living below the poverty line.

•  The Public Utilities Board should recommend that better management practices be put in place at NB Power. The high salaries and bonuses paid to the top executives should be scrutinized.

NB Power Rate Hikes: Unacceptable Blow to the Poor

I am here to voice the concerns of the Common Front for Social Justice on behalf of low-income people over the proposed power rates that NB Power wants to impose on us, the residential customers of New Brunswick. We want you to know that we are not in favour of these increases.

Here are the facts. In 2001, NB Power rates were stable. It was in 2002, that the power hikes began. Let us assume that a household was then paying $2,000 per year for electricity. The 2002 rate increase of 3% brought the bill up to $2,060 per year. Then, when the 2.9% hike of April 2003 came along, not only for power rates but also hot water tank rental and service charges, the household unit was now paying $2,120 per year. In 2004, there was another increase, bringing the annual cost to $2,181. In March 2005, there was an additional increase of 3%, bringing the household power bill to $2,247. Then came July 2005, with another 3% increase, bringing it to $2,314. This is a $314 hike in less than four years. The current request of 13% for residents would, if approved, bring the household power bill to $2,612, which is over $600 higher than it was less than four years ago.

When the notices will come with the power bills explaining the increases, NB Power will probably inform us that not only have they increased the electricity rates, but that their services and products, such as hot water tank rental and other service charges will also be increased by 13%, not by the 2 to 2.5% inflation rate . Surely, such services are not connected to the increasing fuel costs on world markets!

Like all New Brunswick citizens, including the many thousands of social assistance recipients, I have dealt with five power rate increases since 2002. I am not happy with the 13% increase now requested by NB Power. Unfortunately, as just mentioned, such an increase would greatly affect our pocket books. The power bill will be too high for those of us who are on social assistance, as well as for blue-collar low-income workers, and seniors on fixed incomes. There is no way that we can afford such a power bill hike.

Back in October 2005, when I wrote to Lillian Gilbert, I pointed out to her that increasing the residential rate by more than the industrial rate is not fair. Several large industrial companies have reported significant profit margins and they should pay their fair share of electricity cost. We are in agreement that special attention should perhaps be given to the Province = s small business enterprises. What remains certain however, is that increased rates by NB Power will hurt many residential customers like us who are living on a limited income.

Those of us on social assistance receive $110 per month as a fuel supplement from the months of November to April, and for this we are very thankful to the New Brunswick government. At the end of April however, when we receive the power bill, it is still quite high. Having too little an income to set money aside, we have to wait until the arrival of our May check to pay this bill and there is no $110 fuel supplement money included in May. This means we have to cut out essential things to pay our power bill. Moreover, at $110 per month, the 6-month fuel supplement is too low to offset the rising cost of furnace oil or electricity. In November 2005, the Common Front for Social Justice has demanded that this supplement be raised to $125 per month and that it be made available to all households on social assistance, including those who own their homes. We still believe that this is a valid request.

I would like to point out that when NB Power increases their rates, this creates real hardships for those of us on fixed income who have to pay the rent and the telephone, buy groceries, use public transportation to go to doctor = s appointments, etc. It boils down to the fact that if we don = t have the money to pay for our power bill, our electric power will be disconnected. It won = t matter whether this happens in spring, summer, autumn or winter! We cannot use part of our rent money to pay for electricity because if we don = t pay our rent, then we can be put out of where we are living. And if we squeeze the money for electricity out of our food budget, we become malnourished, more subject to infections and other diseases. You may say A There are food banks and soup kitchens; go to them for hot meals and food @ . If you ever said that to many of us, we would feel you have slapped us in the face. There are some people on social assistance who do have some pride and going to a food bank or to a soup kitchen is not something they are prepared to do. We, who are living on small budgets, we recommend that the Public Utilities Board refuse to approve NB Power = s request for the 13% increase they demand. If limited electric power increases are approved by the Public Utilities Board, the percentage should not be higher that the percent raise which the New Brunswick government is prepared to give to social welfare recipients on April 1 st 2006.

I had a telephone call from Frank Bourque and he tried to explain to me the reasons behind NB Power = s increases. During our conversation, he asked me if I had thought about going on A Equalized Billing @ . I told him A No @ . That would not be possible for me. He told me that the amount that I would pay, if I were to go on equalized billing, was in the vicinity of $102 per month. As a single person, living on $570 per month from social assistance as my only income, equalized billing is not an option. Deducting $102 per month represents an 18% drop in my income, something I cannot stand. I am not alone in this case as many other social welfare recipients are in the same boat as I am.

I also had a letter from Lynn Arsenault, Director of Retail and Customer Marketing. She suggested that we use the services of NB Power = s Energy Advisor who can make suggestions to reduce our electricity consumption. For many of us, reducing electricity consumption is practically impossible. We are already very careful not to waste heat . By October, we need to have the heat turned on and as November, December, January, February, March and April come along, there are cold spells and more electricity is needed to heat our homes. Many of us keep the thermostat much lower than most middle-income people. If we keep the heat too low during the winter months, then we get a cold and sickness sets in. So, to reduce electricity consumption, we can = t keep the thermostat down all the time. You can = t ask fragile seniors to keep warm with less heat!

I would also like to point out that when the New Brunswick Government and NB Power looked at changing to another brand of oil, this was not discussed publicly with the people of this Province. Rather, this was a decision made by both the provincial government and NB Power. Millions of dollars were lost in the Orimulsion deal with Venezuela. Because both parties goofed on this deal, it is not up to the consumers to pay for the bad management on the part of NB Power and the Lord government.

May I also like to point out that by giving the President of NB Power an annual salary of $281,000, plus a bonus of $55,000, as this was done recently, this is not a way to control costs within the power company. Normally, bonuses are only given if substantial profits have been made. NB Power should be better managed and better controlled so that it does not pay salaries beyond its means, with the money collected from our power bills. Raising the power rates without improving management will simply encourage the continuation of poor managerial practices.

We are keenly aware that as long as NB Power keeps raising their rates, there will be more and more people who will not be able to pay their power bills. It is time that NB Power put themselves in our shoes and learn to live within its means. The repayment of the debt that they have created should be gradual instead of demanding a 13% hike all at once.

In conclusion, the members of the Common Front for Social Justice say that New Brunswickers living on a small income are going to be seriously hurt should the 13% increase requested by NB Power be granted. In the name of fairness toward all citizens, the Common Front for Social Justice recommends that the Public Utilities Board request the following:

1. That increases in service charge, hot water tanks, and other services not be increased by more than the rate of inflation, which is between 2% and 2.5%, not the 13% that is requested by NB Power from all residential customers.
2. That the government of New Brunswick remove the GST from such an essential service as electricity. This recommendation has already been voiced by Members of the Legislative Assembly of Nova Scotia and other advocacy groups.
3. That the New Brunswick government give an electricity supplement to all people on social welfare as of April 1 st 2006. This supplement should be sufficient to offset the increase in power rates which will be granted to NB Power. Considerations should also be given by the New Brunswick government to extend this power supplement to all the people who are living below the poverty line.
4. That NB Power lowers the high salaries and benefits paid to its top executives and use these savings to offset electricity costs, thus reducing the energy hike requested.