By Stephen Llewellyn
As appeared on page A3

NB Power’s requested 9.6 per cent rate hike would cost the City of Fredericton about $200,000 a year.

But Coun. Dan Keenan, chairman of the city’s finance committee, said council anticipated a rate hike when it did the 2007-08 budget.

“We have done a good job in anticipating that might occur,” he said. “We put in a contingency of about eight per cent.”

He said the power-rate hike won’t impact the property-tax rate in Fredericton this year.

“NB Power needs to pay for what it costs to generate power, and we are the rate payers,” said Keenan. “It is unfortunate that we are seeing these significant (power-rate) increases one on top of the other.”

NB Power raised prices by eight per cent last year.

Dan Weston of the Fredericton Anti-Poverty Organization said the increase will hit the poor hard.

“Lower-income New Brunswickers have to make choices that nobody should have to make,” he said. “Do you eat or do you try to keep your place heated?”

Weston predicted that more people will have their power cut off because they can’t afford it.

He said he didn’t think that the rate hike is necessary. He said NB Power should boost its price on energy exports to the United States instead.

“There should be some kind of inquiry done by an independent party from outside the province to see where all that money (from exported power) is going,” said Weston.

Fredericton Chamber of Commerce general manager Anthony Knight said the rate hike will create significant hardship for Fredericton businesses.

“Businesses are looking to be as competitive as they possibly can,” he said. “This pulls back those efforts.

“They have to pass those costs onto consumers.”

Knight said the rate increase combined with the business-tax hike makes it even harder for businesses.

“It certainly appears that New Brunswick is at a disadvantage right now,” he said.

Knight called on NB Power to be more aggressive in marketing its excess energy to the United States to help hold down rates.

Wayne Harrigan, New Brunswick representative for the Canadian Association for the 50 Plus, said this is another challenge to seniors struggling to pay higher gasoline prices, higher personal-income taxes and higher property taxes on a fixed income.

“For the last while, they have been braced for increases in energy cost,” he said.

“This increase will have a serious impact on many, many seniors.”

The Liberal government wants to keep seniors in their homes as long as possible, but all these things are making that a challenge, said Harrigan.

“They lost the (energy-tax) rebates that were promised to them in September,” he said. “It would have been a small thing but it would have been able to say someone is helping them.”

People want to retire in New Brunswick, said Harrigan.

“But boy it is getting tough,” he said. “You can feel the worry.”

David Plante, vice-president of Canadian Manufacturers and Exporters, said the proposed power-rate hike will threaten the viability of some businesses in the province, particularly in the forestry sector.

“An increase of this order of magnitude is going to have a devastating impact on the competitiveness of New Brunswick manufacturers,” he said.

Some saw mills in this province have closed because of higher energy costs, the strong Canadian dollar and tax hikes, Plante said.

Businesses would rather see power-rate hikes spread out over time to avoid rate shock, said Plante.

He said since 2004, NB Power has raised the price of electricity by 16.2 per cent, which should have covered a majority of its fuel-cost increases.

Plante called for a study of the cost of electricity generated by NB Power.

Charles Cirtwill, acting president of the Atlantic Institute for Market Studies, said the increase couldn’t come at a worst time after the personal and business tax hikes in the Liberals’ budget.

“It is just another chorus in the negative messages going out to businesses and former New Brunswickers seeking to come back to New Brunswick,” he said.

Cirtwill said bad decisions made in the past at NB Power are being paid for now. While power rates in New Brunswick will still be competitive in Atlantic Canada, this province is competing with places like Alberta, British Columbia and the rest of the world, he said.

“From that perspective, the energy rates and tax rates make New Brunswick significantly less well off compared to those jurisdictions,” said Cirtwill.

The only good news is that NB Power said it may be able to hold future rate hikes to three per cent for the next two years, he said.

“At least that gives a figment of stability for business users in New Brunswick,” said Cirtwill. “That is something that business likes.”