The Mactaquac dam produced 14 per cent more hydro electricity than average this fiscal year due to heavy rains and that should mean a bigger profit for the debt-laden utility, says an analyst.

In this fiscal year, the Mactaquac dam produced 14 per cent more hydro electricity than normal because of heavy rains. Overall, NB Power’s hydro-generating stations produced 12 per cent more electricity than normal.

Charles Cirtwill, president and CEO of the Atlantic Institute for Market Studies, said the nice thing about hydro electricity is that the production costs are fixed.

“What that means, of course, is that they’re not, shall we say, dipping their toe in the highly volatile market of buying fuel supplies for their other generating capacity,” he said Monday.

“The likely impact is their profit is going to be higher.”

Just how much higher NB Power’s profit will be depends on the price of oil, said Cirtwill.

“As anyone who bought gasoline lately knows, the price of most fossil fuels has been going up,” he said. “The more hydro you have, the higher your profit.”

Overall, NB Power’s hydro-generating stations produced 12 per cent more electricity than average this year, said Melissa Morton, manager of media relations for the utility, on Monday.

“Mactaquac, in particular, was 14 per cent above its normal,” she said. “Normal for Mactaquac is 1.611 terawatt hours.”

Morton said the average hydro electricity production for NB Power in total is 2.8 terawatt hours.

“We were 12 per cent above that,” she said. “That was caused by the high amounts of rainfall.”

But Morton declined to reveal the specific impact of the extra hydro production on NB Power’s financial bottom line.

“It can compromise our position in the open market when we discuss the numbers.

“With that knowledge, other people can figure things out – things like what we are buying and selling electricity for, which can negatively impact us in the open market.”

NB Power has a $4.5-billion debt and is forecasting a $30-million profit for this fiscal year, which ends March 31. The utility raised rates by three per cent in June but the newly elected Conservative government has promised to freeze electricity rates for the next three years.

Morton said every generation source in NB Power is integrated so when anything is increased it impacts all generation sources.

Last week, NB Power issued a media release, saying the Dalhousie generating plant would stay open longer than expected because it used less fuel than forecast in 2010-11 due the increase in hydro electricity.

“Where Mactaquac is one of the cheap forms of electricity generation, it positively impacts our revenue by having more of it,” said Morton.

Cirtwill said NB Power isn’t revealing the extent of its higher profit because it doesn’t want to send a signal to its fuel suppliers that it can afford to pay more for fuel.

He laughed when asked if consumers will see any benefit from higher hydro production such as lower rates.

“The rate is regulated,” said Cirtwill. “They already know how much they are going to charge you this year and next year.

“This profit is all going to go into their pocket.”

The good news for New Brunswick is that the utility’s pocket is also the taxpayers’ pocket in the long run, said Cirtwill.

“One of two things will happen with an increased profit for NB Power,” he said.

“Either they will have to borrow less or they will actually be able to pay some of their debt down.”