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NB Power seeks EUB approval for customer class cost allocation methodology

2014-10-17


Fredericton, N.B. – NB Power filed an updated methodology for a customer revenue-to-cost ratio with the New Brunswick Energy and Utilities Board (EUB) today.

This filing, which follows the re-integration of NB Power as a single entity last October, is the next step in a process that will allow for a transparent and fair method of establishing equitable rates across customer classes.

The 47-page filing includes a Class Cost Allocation Study (CCAS) outlining the methodology for allocating the cost to serve our customers by customer class. This study can be accessed on NB Power's website.

Today's filing will allow the EUB and various stakeholders to review the methodology in preparation of a hearing expected in 2015.

"This is our first opportunity to file our cost allocation methodology as an integrated utility since the changes to the Electricity Act in October 2013. We are very supportive of the increased transparency this process provides for," said Darren Murphy, Vice President of Corporate Services and Chief Financial Officer. "Our goal is to assist the EUB in arriving at fair and reasonable rates for our customers and - we look forward to discussing the methodology we have provided with the EUB and interested stakeholders."

The CCAS study reflects updates since the last filing in 2007, including the integration of NB Power's corporate structure made last year as a result of the Electricity Act.

A standard CCAS allocates the total cost of providing service among rate classes and compares allocated costs to the revenue generated by each customer class. The result is expressed as a 'revenue-to-cost ratio' for each rate class, and is used as a basis for differential rate adjustments between customer classes to better align revenues to costs.

The study shows NB Power's methodology results for the forecasted fiscal period for 2015/2016, including a planned uniform two per cent rate increase for all classes scheduled for July 1st, 2015.

MEDIA CONTACT: Deborah Nobes, NB Power Communications, 459-4838, dnobes@nbpower.com.