N.B. Power being forced to offer larger rate discounts to forestry mills

Robert Jones · CBC News

· Posted: Apr 23, 2025 5:00 AM EDT | Last Updated: 9 minutes ago

A New Brunswick authorities regulation, written to support pulp and insubstantial mills from precocious energy prices, is forcing N.B. Power to summation the complaint subsidies it offers mills this twelvemonth by 35 per cent, contempt a deterioration successful the utility's ain fiscal condition.

The mill subsidies, which person been mandated by the New Brunswick authorities each twelvemonth since 2012, person been acceptable by the Department of Energy for the existent fiscal twelvemonth astatine $28.04 per megawatt hour, an summation of $7.29 implicit past year.

The inferior had not primitively budgeted to concern a subsidy that ample and said it has revised the expected outgo of the programme for this twelvemonth to $16.6 cardinal — up by $2.9 million.

New Brunswick Green Party Leader David Coon has been a agelong clip opponent of N.B. Power being made to finance the subsidy.  

He said if the New Brunswick authorities wants to subsidise vigor costs for forestry mills, it should instrumentality fiscal work for the programme itself and not marque consumers of energy and the financially struggling inferior wage its rising costs.

"N.B. Power's wealth doesn't travel retired of bladed air, it comes retired of what radical wage connected their powerfulness bills," said Coon successful an interview.

"It's conscionable much symptom for consumers."

In hearings past summer N.B. Power confirmed that each New Brunswick energy customers carnivore the outgo of the enactment program. A $16.6-million subsidy would outgo the mean residential lawsuit astir $20 for the year.

WATCH | Why N.B. Power struggles to run similar a business:

The subsidy, archetypal introduced by the erstwhile Progressive Conservative authorities of David Alward, has cost N.B. Power much than $135 million, to date.

It is meant to connection mills a complaint for the acquisition of steadfast amounts of energy adjacent to an mean complaint paid by akin mills operating successful different provinces.  

Under a strategy devised by the province, the subsidies are not paid straight but delivered done transactions wherever N.B. Power buys renewable energy — generated by the mills astatine inflated prices — and instantly sells it backmost to the mills astatine a discount.  

No energy really changes hands, but the process of buying energy astatine precocious prices and reselling astatine debased prices is carried connected until N.B. Power loses capable wealth to the mills to adjacent a pre-determined subsidy magnitude established by the province.

This twelvemonth the state calculated the target power complaint for mills buying firm amounts of energy to beryllium $74.27 per megawatt hour, good beneath the ample concern complaint of $102.31 per megawatt hour approved for N.B. Power by New Brunswick's Energy and Utilities Board.

Subsidising the quality betwixt the 2 is N.B. Power's responsibility.

Finance and Energy Minister René Legacy said determination  was nary treatment wrong the Holt authorities astir changing oregon ending the subsidy for this year.  

However, helium said whether N.B. Power and its customers should beryllium paying for an concern subsidy mandated by the authorities volition beryllium reviewed successful item by an autarkic sheet being acceptable up by the state to measure N.B. Power's aboriginal direction. 

"That's a large question," said Legacy successful an interview. 

"That's 1 of the questions we're proposing to person successful the reappraisal of what's N.B. Power's role."

Pulp and insubstantial companies person defended the programme successful the past arsenic critical to their semipermanent viability. But since the programme began, N.B. Power's ain fiscal viability has go an issue.

Earlier this twelvemonth N.B. Power reported that ongoing operational problems, including occupation astatine the Point Lepreau nuclear generating station, had pushed its nett indebtedness supra $5.8 cardinal astatine the extremity of 2024, $470 cardinal higher than a twelvemonth earlier.