Friday, April 20, 2007

A responsible response to power rate increases

I want to commend the Graham Government for their decision today concerning the increase in power rates.

A lot of people, including the opposition Conservatives, have been very wary of the widely expected increase that was announced yesterday and comes in just under 10%.

Last year, when NB Power asked for an increase of 11.4%, seeing an election on the horizon, the Lord Government announced a lot of surprising measures. Many of which they had specifically rejected before as irresponsible financially and bad in terms of policy. Most notable among these was the widely known HST rebate program and a cap of 8% for a rate increase, regardless of whether the Public Utilities Board thought it was warranted and in conflict with their previous orders for NB Power to break even. Everyone knew these actions were inconsistent with the principles of conservatism and with the past statements of the Lord Governmemt and were made solely because they had a minority government (Tanker was still sitting as an independent).

This year, NB Power has asked for an increase of 9.6% (one which would probably have been unnecessary or at least lower if not for the irresponsibility of the Tory intervention last year). Spinks has wrongly suggested that this is the government's fault and should be seen as the same or similar to the income tax increase and rightly pointed out that this will mean more revenue for government (in terms of the HST collected on the hgiher power rates).

The government response has been tempered and logical. Rather than irresponsible policy u-turns, the Graham Government is going to invest the increase revenues of $37 million into new programs which will be developed to ease the burden on low income earners and to prevent it from driving businesses out of the province.

The fact that this increase will not change the fact that New Brunswick has the lowest electricity rates in Atlantic Canada and that the government is going to take any monetary benefit it gets from the increase and give it back to the consumers seems far more reasonable than the Tory reaction which was to cripple NB Power by slashing its needed revenue and launching a flawed HST rebate program which they never implemented, planned or developed.

12 comments:

Spinks said...

Never said it was the government's fault, nbpolitico (or didn't mean to anyway). Just that it a) sucks in addition to everything else the government HAS done to us, b) and they have a responsibility to make sure NB Power is doing all it can to keep costs down and c) it's worth noting the government will make millions thanks to the increased HST revenue. Worth noting in my mind.

Anonymous said...

For a change I agree with Spinks. This is money grab. Cut the fat at NBPower and lower the salaries of real big fat cats.

Those who are on the margin and do not qualify for any help are screwed and screwed real bad. Not impressed.

nbpolitico said...

This is the price of being the government, you have to wear the issues of the day so I am not surprised to hear your criticism anon.

However, despite wanting to blame someone, it is hard to logically tag the Liberals with this.

They have made NB Power trim the fat, they blocked them from giving themselves bonuses, etc

They are giving their increased revenue from this action back to the taxpayers.

Spinks said...

"They are giving their increased revenue from this action back to the taxpayers."

Not quite. Not that I totally disagree with what they're doing but they're generally targeting the poor who pay lower taxes anyway. Not a bad thing but middle class New Brunswickers have really been hit badly this year and I'm not convinced the Liberals really care about that.

Anonymous said...

How you define poor? I agree with Spinks. After paying all the taxes and power bills I am very poor. So should I not get help.

Anonymous said...

Thats a matter of perspective. The tories certainly didn't see an election on the horizon, there was no way of knowing what Tanker and Peter were going to do, thats just guesswork.

Just as likely is that the tories were looking out for NBers, and the liberals aren't. The tax hike pretty much confirms that. I don't think just because its one persons opinion that makes it 'responsible', as if everybody else is simply ignorant of what is going on.

WIth NBPower posting two years of profits, it hardly follows that tax increases are necessary. From a certain line of thinking they may be, but not necessarily.

Saying 'no bonuses' is hardly 'reigning in spending'. That's like if a millionaire decides to go on more year before upgrading that that new yacht.

As many critics point out, its virtually impossible to get a look at NB Powers books, therefore any conjecture on spending and saving is just that-a guess. And its not like its a private company, the bad excuse that somehow it may hurt their business if they give out information is just nonsense. IF they had nothing to hide, those books would be public and people could actually gauge just where the money goes and how much.

While people continue to focus on salaries and bonuses, I'll remind people of the CBC report of a year ago that talked about how NB Power was buying power from Irving, even though it didn't need to, and even though the price was significantly higher than the market. One would think that would get people's attention as much as the bonus situation does-until you remember who owns the media.

nbpolitico said...

Anon at 513 - Tanker left the Tories on Feb 18, these measures were announced on Mar 27 - when the Tories had a minority and when the media and Liberal expected the govt to fall on the Apr 7 budget vote.

nbpolitico said...

Anon at 513 - Tanker left the Tories on Feb 18, these measures were announced on Mar 27 - when the Tories had a minority and when the media and Liberal expected the govt to fall on the Apr 7 budget vote.

scott said...

This kind of stuff doesn't surprise me one bit as this current Liberal regime had absolutely no plan for the province when they took office. So in retrospect, like nbpolitco said, they're just letting the issues manage them rather than move forward aggressively on good solid policy. That's unless you consider governing unilaterally invoking tax hikes, increasing fees, breaking election promises right out of the gate and propping up Caisses?

I think it's safe to say, and I've said this many times before, that this situation is due to the fact that while in opposition, the Liberals were more concerned with attacking the sexy media issues rather than hashing out a strong set of policies through significant dialogue.

In other words, they did exactly what nbpolitico accuses the current opposition of doing, they fought ridiculous and insignicant issues in Fredericton rather than going to the people. Which is why we're in the situation we're in today, because the voters chose to send Lord a message that they weren't happy with this reative style government, not because the Liberal platform was strong. However, I just don't think the end plan was to install this inept Liberal government. Unfortunately, that's what they got.

mikel said...

I'll remind Scott of something he already knows, that NBers weren't 'sending Lord a message' at all, at least not the one he thinks. More New Brunswickers voted for Lord than voted for Graham, and more voted for Lord in this election than during the previous one. That's hardly a damning sentiment. If anything, they LIKED his style of governing. That the NDP lost votes and the liberals also gained only shows that the parties are so similar that like most provinces, New Brunswickers are split down the middle.

While the rate cap was announced in March, it had been mentioned as early as 2005, perhaps people remember all those industry insiders who held public meetings all during the winter. It was pretty clear that a rate cap was coming, but once again thats a question of perspective.

The liberals, if you recall, at the time were saying that 8% was way too HIGH. So once again see Scott's point above.

Paul said...

I suppose we have to have partisans in politics, but by trying to convince us that this rate hike is okay makes me think that nbpolitoco is blind to the facts.

Everything this liberal gov has been doing is exactly what voters did not want. The Conservatives were bad, the Liberals are worse because they are smarter and have convinced themselves they know whats best for people.

They are Liberals, who lie and cheat as a matter of course...same old same old in NB.

Too bad Shaun doesn't have a backbone and knew what he was doing, instead of listening to what old McKenna hacks think.

Brunsie said...

why is nobody challenging NB Power's declining block rate, which effectively subsidizes the power consumption of those who live in the largest homes??