FREDERICTON – A public spat between some of the province’s largest industrial players and its natural gas provider is fanning the flames of an ongoing dispute over the cost of the fuel in New Brunswick.

In one corner is Enbridge Gas New Brunswick, the province’s provider of natural gas. In the other, a group of prominent companies criticizing Enbridge for rate hikes and extra fees.

Both sides have gone on the offensive of late, running full-page advertisements in the daily newspapers to try to win over public opinion to their side.

It’s the latest round in what has become an ever-present struggle between the two sides, says Charles Cirtwill, president and CEO of the Atlantic Institute of Market Studies.

“You basically see two sides in very fixed positions,” he says.
“If you’ve got a lose-lose situation, it doesn’t bode well for a quick solution.”

In January, Enbridge applied to the New Brunswick Energy and Utilities Board to increase its distribution rates – not the cost paid for the gas itself. It wanted the rates for the largest industrial users to jump by about 115 per cent.

At the end of April, the board ruled the request was just and reasonable, leading to increases for most classes of customers, ranging from about 10 per cent for residential customers to about 23 per cent for small commercial customers.

However, a decision about delivery rates for large industry was reserved after vigorous protests from that sector.

Now, industry is trying to convince the public that Enbridge’s rate increases far outpace those in other provinces and the delivery fees are unnecessarily high. Meanwhile, the provider itself is advertising that the six biggest industrial users bypass the public system, thereby avoiding helping to pay for its construction and maintenance.

“They’re all speaking the facts,” Cirtwill says of the ads.

“Enbridge has more debt than it should have. It has increased its rates higher than increases in other provinces. But at the same time, the environment in New Brunswick … is so different from Nova Scotia that those comparisons are unfair.”

The problem is in the province’s distribution model, he says, which puts both groups in a difficult position by removing the large users from the public delivery system. Instead, they have direct access to the main natural gas pipeline.

As a result, both sides are painted into corners they can’t get out of without hurting themselves, meaning other users are subsidizing the system until a more equitable process is realized.
Cirtwill says that won’t be easy.

“If you’re talking about residential consumers and how can this be fixed to mitigate the harm to them, it’s going to be an ugly exercise,” he says.
“The folks who have direct access to the distribution system aren’t going to be particularly interested in picking up a higher cost. The Enbridge guys and all of their customers are going to continue to demand that those big guys get into the system, because it would bring down their costs across the board.”

He says the province should have approved a more realistic and patient model for natural gas infrastructure expansion 10 years ago, but expected too much growth, too fast.

“Once you’ve gotten into this mess, it becomes that much more difficult to get out,” he says.
“You end up with exactly what you’ve ended up with with Enbridge, which is a lot of debt and higher costs to consumers.”