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Variance Account Recovery Filing

Variance Account Recovery Filing

NB Power does its best to project the costs of delivering electricity for the upcoming year. These forecasts are based on a number of factors including energy consumption, weather, commodity prices, exchange rates and hydro flows. Sometimes, due to factors outside of NB Power’s control, variances can occur, resulting in additional revenue or losses.

Until now, NB Power had to absorb any variances, whether they were positive or negative. In recent years, NB Power has experienced primarily negative variances, which has become increasingly challenging for us.

Following changes to the Electricity Act in 2021, a new mechanism is in place to provide greater transparency to customers and help us ensure the actual costs of delivering electricity is recovered in rates.

Regulation now requires NB Power to file a Variance Account Recovery with the New Brunswick Energy and Utilities Board (EUB) each fiscal year. If actual costs come in lower than anticipated, New Brunswickers can receive a reduction in rates. If actual costs come in higher than anticipated, New Brunswickers can receive an increase in rates.

On December 15, 2023, as actual costs came in higher than anticipated due to a number of factors, primarily an unplanned outage at the Point Lepreau Nuclear Generating Station, NB Power filed with the EUB for a three per cent rate increase over 12 months. Last year, customers received a 0.9 per cent rebate for 12 months.

This filing is separate from the rate request made as part of the General Rate Application also made in December 2023.

The application went through an independent, rigorous review process by the EUB, giving customers and others an opportunity to offer feedback. On March 19, 2024, the EUB approved the adjustment for 12 months starting April 1, 2024. The average adjustment amount is 3%; however, charges vary depending on rate class and energy usage.