The Current - New Brunswickers suddenly paying hundreds more in power bills

Episode Date: February 26, 2025

New Brunswicker Peter Cote says he’s scared to death of opening his next power bill. People in the province have been getting shockingly high bills during a very cold winter — in some cases hundreds of dollars more than expected — prompting the provincial government to order an independent audit.

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But it's time to imagine what we can do with more. Join Scarborough Health Network and together, we can turn grit into greatness. Donate at lovescarborough.ca. This is a CBC podcast. Hello, it's Matt here. Thanks for listening to The Current, wherever you're getting this podcast.

Before we get to today's show, wonder if I might ask a favor of you, if you could hit the follow button on whatever app you're using There is a lot of news that's out there these days We're trying to help you make sense of it all and give you a bit of a break from some of that news, too So if you already follow the program, thank you And if you have done that maybe you could leave us a rating or review as well

The whole point of this is to let more listeners find our show and perhaps find some of that information that's so important in these really tricky times. So thanks for all of that. Appreciate it. And on to today's show. It is a classic image. The dad who is hyper vigilant about his kids fiddling with the thermostat or leaving the lights on in an empty room. He'll holler about the power bill while his kids roll their eyes or even worse, laugh

at their old stick in the mud dad. I might be that dad. Just a little bit of self confession there. Over the last year, people in New Brunswick have not been laughing. Energy bills in that province are going up and up and up. A price spike in December prompted an audit of the provinces electric utility, NB Power.

And in a moment we'll hear how the province got here. But first we're joined by Peter Cody, a retiree Electric utility, NB Power. And in a moment we'll hear how the province got here. But first we're joined by Peter Cody, a retiree who has watched his energy bills skyrocket over the last couple of years. He's in Fredericton. Peter, good morning. Good morning.

How are you, Matt? I'm okay. How much more are you paying for electricity now compared to what you were paying just a couple of years ago? Well, my bill, I've been here 13 years. So it's like, it starts off, let's say in the summertime, it's $89 or something. And then you get November and it's 50 bucks, 50 bucks higher every time.

Now it's a hundred dollars higher every time. There's no, it's nicer weather. This month's been cold, but we've had nicer winters and the bill is still going up. So when you get the bill in the mail and you pull it open and it's $100 more, what goes through your mind? Well, you get all the sick inside. I went yesterday, because my bill should have been in, and I go, I had to pay the last one. I go, here we go. Nobody cares.

And then I thought, this one, my highest bill in 13 years was like $300, I think it was $68 or something. And now I'm getting was like $368 or something. And now I'm getting him like $420. It looked like you said $450, they gave me $45 off. Now you're up to $450. So this month has been cold here. And I went yesterday, wasn't there yet. I'll be there today and I'm thinking,

it could be $600, it could be $700. Like, I don't know what people are supposed to do. Like, you don't know, it's scary. I feel like I'm going through the customs every day or something. So are you doing anything different? Do you have the heat cranked up or anything like that? No, no. There's no reason why the building- It's just the opposite really. All these years I know, I was a home inspector. I know how to keep

it, everything is right on. Like it's not taking extra power or nothing, you know. It's just the way it is. It's just he's going up. I have friends down the street here and you know, he got laid off. That's okay. That's life. He's selling all his tools. A hundred dollars, 50 bucks, expensive tools. And like, what are you doing? You sell all your tools. I don't know. He says they're way behind in their hydro. We said we're trying to catch up. He's not going to have any tools left. People are, my other people I know, they haven't had their car in the road for two months. It needs to be inspected. They need about 400. We're paying the hydro bill. The car is sitting there buried in snow. He gets on the bus to go to work. It's getting that bad.

Like it's just making you sick inside. What have you had to do? I mean, you mentioned your neighbor down the street selling the tools. What have you had to do? Have you had to make any sacrifices or compromises to help pay those expensive bills? I've sold a few things, yeah. I've sold a guitar I've had for 20 years for like $200 and I sold a few things that I have, like when to shoot guys But you know a couple of hundred bucks here 200 bucks there, and it it just said like I don't like it It's degrading in it if you're young they don't know what's going on They think that's the way life is but when you're older we know we're just getting ripped off. We know it You feel like you're getting ripped off

Yeah, you people that be like you actually think like, wow, somebody really cares here. That's a nice feeling inside when you're scared and you know, people get scared. What are you gonna do? If I lose this place over hydro, where am I supposed to go? Live under the bridge? Oh, I go into homeless shelter downtown and live in a cot and I got a little bag of clothes underneath. This is getting so scary for anybody who's 50 and up. So we talked to NB Power and they said that they offer these assistance programs, they said there are payment plans, you can get a free heat pump, there's insulation that's available to households with an income of less than $70,000, there's efficiency programs that are designed to

reduce energy use. Or any of those things, those options that NB power is suggesting are they Would they be of help to you? There's nothing going on and if you go to I don't know what you call that place something New Brunswick, it's like trying to get welfare, you know, like it we're not on welfare But you only get so much when you're retired you get so much money and if you if you're getting I don't know if you're retired. You get so much money and if you're getting, I don't know, if you're getting $1,500 a month and your bills at $2,200, what are you supposed to be doing here? Like that's what I'm saying. It's got to the point I'm paying more for hydro than I am for my not mortgage but lot rent and stuff.

The government took interest in this and launched this audit of NB powers pricing earlier this year. The results apparently could come out as early as this week. What are you hoping to find out? I think it's coming out tomorrow. Okay, so when that comes out, what do you think is going to be in there? Nothing. It's just a joke. They're going to say, oh yeah, well everything's been checked. They put everybody's smart meter, except me here,

because there's supposed to be a safety cable, so they didn't put one. I didn't want one. Everybody said their hydro went up 30, $35 about eight months ago. They've been here, they still haven't hooked it up. I don't want the smart phone, it's a smart meter if it's going to go higher. It's just another, I don't know what to do. Nobody knows what to do. So your bill- Not like I can go out and work and do other things and make, oh, I got to make another thousand dollars forro this month. Nobody's got the money. And you think your bill's coming in the next day or two,

the new bill? I thought it was going to be yesterday. And then I'm scared to death. Looked at that like I'm thinking the last one, if it was 450, it said 402, but it's on it. It's hard to read it. It looked like they gave me $45 off. And I thought, so you're trying to tell me it was 450, there's no way.

Not after living here for 13 years. I wish you the best of luck, Peter. It's good to talk to you. Thank you very much. Oh, thank you. It's nice to know somebody cares. Yeah, take care of yourself. Thank you very much.

Peter Cote is a retiree. He lives in Fredericton, New Brunswick. David Campbell is an economic development consultant, former chief economist of the province of New Brunswick. David, good morning to you. Good morning. People complain about the electricity bill

across this country, but what's going on in New Brunswick? Why are electricity prices spiking there? So there's a number of reasons. One is we did have an extra cold winter until recently started to warm up a bit. Plus there was a big rate increase. So you combine those two things and we are seeing a significant spike in people's bills, particularly if

they don't have the annualized billing like I do. I get the same every month. But people that don't do that, you know, it's very cheap in the summer and very, very high in the winter. But the other thing about New Brunswick is we're almost exclusively, we heat our homes with electricity and most of us with baseboard heat. So if you compare that with Ontario and other places that have natural gas or places like Quebec that have very cheap hydro, it just, we feel it a lot more when the electricity rates go up. If electricity rates go up in Ontario or even Nova Scotia where a lot of people heat with oil,

not as many people are as affected by the increase in the price of electricity because we are very dependent on electricity in this province. We've heard from people though who heat their houses with wood and even they're getting a bill that is a bit eye-watering to them and a shock. What's at the root of this? I mean, part of this is, you mentioned Quebec and cheap power. Some of that power used to come into New Brunswick, right? Yeah, that's right. So we relied on Quebec for a while to help us meet our spike in demand for electricity.

So what happens is in the winter in February, we need twice as much electricity or more than we need in the summer. And so we relied on Quebec and recently Quebec has said we can't supply that anymore. So we've had to, we're building now new electricity generation facilities and we have to get the power some other way or do other things and that is pushing up pressure on costs. And of course, we've had our nuclear power plant has been down on maintenance, extended maintenance, and that has also pushed up costs. We heard Peter talking about the fact that people in his neighborhood are selling things off

so that they can afford the electricity bill. New Brunswick has the highest rates of energy poverty in Canada. What does that mean? It means that you have lower income households are very dependent on electricity. So if you take the highest quintile of income earners in New Brunswick, they pay about 2% of their income on electricity, and the lower income households spend close to 5%. And so it really impacts them when the rates go up. So that's a real challenge, is how do you have a sustainable and viable electricity utility when you're in an environment with significant increases. Why would that be so high in New Brunswick? Again, is that about the fact that so many

people rely on electric baseboard heating, for example, or is there something else going on? So there's a couple things going on. One is the baseboard heating, but the bigger issue here is that Enby Power carries a lot of what is called stranded debt. And so that debt, they have much more debt on their balance sheet than they should have for the size of utility and for the generation assets that they have. And so when that debt gets rolled over, it's at higher interest rates. And that is, again, another major reason that rates are being put up.

So I've been calling for what happened in Ontario 20 years ago when they had a lot of stranded debt in the electricity system. They pulled off over 50% of that debt. They recapitalized the electricity system and rates were more stable. And of course, Ontario now has one of the best electricity systems in the country. And I think we're going to have to do something like that in New Brunswick. In other words, we're going to have to move a lot of the debt off NB Power's balance sheet and put it on the taxpayers' balance sheet.

Let's talk a little bit about the role of the pulp and paper industry in this. There was a mill that's owned by Irving Paper. It said this week it's going to permanently shut down 50% of its operations. It blamed in its words, uncompetitive electricity prices, something like 140 people are going to be able to work because of this. Envy Power says its prices are comparable with other jurisdictions. So who's right in this? So the rate facing those very large users of electricity is about 40 to 50% lower in Quebec. And so it is higher in Nova Scotia, it is higher in certain other jurisdictions in Canada, but the bottom line is, you know, the pulp and paper industry competes with plants in

Quebec but also in places in the US that have very cheap power rates. And so the reality is if you can't have a reasonably priced industrial electricity rate, you're not going to have those large users of electricity. They just can't make money here. They can't be profitable here. So that's a real problem and it's something that we need to think about because New Brunswick has a lot of very electricity sensitive industries, food manufacturing, the refinery, pulp and paper mills, saw mills, those are all big users of electricity. And as the rates go up, it puts upward

pressure on costs. But that plant specifically is, is very unique. It's the largest user of electricity in the province. I heard that it uses as much electricity as PEI, is that right? That's right.

That's right. It's upwards of a hundred megawatts. So it's a massive user of electricity just because of how those paper machines are, are powered. They're not powered with natural gas. They're powered with with natural gas, they're powered with electricity.

But the general principle is there that as our large industries are facing big increases in electricity, it's impacting their competitiveness. What do you make of the fact that 140 people are gonna be tossed out of work because the folks who run the plant say that it's uncompetitive? Those are good six-figure salaries. It's a real problem and I'd love to find a solution.

There's got to be a solution here. We have- Part of the solution has been NB Power subsidizing electricity costs for pulp and paper mills, right? Including this one. There are various opinions on that in terms of what kind of overhead, what kind of debt costs and so on need to be built into the rates. So, I mean, we could argue that all day. I still think that it's not about subsidization. It's about if you don't have a rate structure that's competitive, you know, it's going to be very hard to keep these industries. So what do you do about this? I mean, you have a suggestion as to how to get a handle in some

ways on the financial problems of Envy Power. What do you want to see done? I want to, I'd like to see a significant amount of that stranded debt taken off NB Power's balance sheet. And that means what specifically? You take it from the rate payer and you give it to the taxpayer. So it literally goes on the government of New Brunswick's books. And the reason you do that is because the reason the debt is so high right now is because of bad political decisions in the past. NB Power did not pay down its debt in an orderly fashion because of political pressure and other reasons. And now those mistakes of the past are being taken out on the rate payer, like the gentleman that you interviewed. I think that debt should be paid for by the taxpayer because the taxpayer,

it's income sensitive. The more I earn, the more taxes I pay. Whereas in the case of the rate payer, they pay the same rate, whether they're at the low income or at the high income, unless they take advantage of some of those programs you mentioned. But in general, they face the exact same rate, whether it's a rich taxpayer or poor taxpayer. So I believe that the one of the big solutions here is to move that stranded debt off of the power books. Would generating more power be an option? People have floated the idea, for example, of more wind power generation.

Absolutely. We've got, if you look at the country of Portugal, it's only slightly larger than New Brunswick in landmass. It has 11 million people and has 2,900 wind turbines. We have two-thirds of the province's industrial freehold or crownland with very little population, and we only have less than 300 wind turbines. What's holding New Brunswick back? Maybe a lack of ambition, but I think we need to really look at driving a new generation of electricity generation in the province, whether it's wind or small modular reactors, and use that electricity as a driver of economic development in the future. So,'s wind or small modular reactors, and use that electricity

as a driver of economic development in the future. So I think the first thing you do is you get NB power sort of fixed properly, and then you turn your focus to using all of this open space and these hills and this opportunity for wind and solar and also nuclear, and use all that energy to drive new green and clean industries like data centers and clean manufacturing and so on. In the meantime, folks like Peter are getting clobbered. Folks like Peter are getting clobbered, yes. David, it's good to talk to you about this.

Thank you. There's a lot of insight in what you've said. I appreciate it. Anytime. David Campbell is an economic development consultant, former chief economist for the province of New Brunswick. In Scarborough, there's this fire behind our eyes. A passion in our bellies. and economic development consultant, former chief economist for the province of New Brunswick. In Scarborough, there's this fire behind our eyes.

A passion in our bellies. It's in the hearts of our neighbors. The eyes of our nurses. And the hands of our doctors. It's what makes Scarborough, Scarborough. In our hospitals, we do more than anyone thought possible. With less than anyone could imagine. But it's time to imagine what we

can do with more. Join Scarborough Health Network and together we can turn grit into greatness. Donate at lovescarborough.ca. This message comes from Viking committed to exploring the world in comfort. Journey through the heart of Europe on a Viking longship with thoughtful service, destination-focused dining and cultural enrichment on board and on shore. With a variety of voyages and sailing dates to choose from, now is the time to explore Europe's waterways. Learn more at Viking.com. Randy Hatfield is executive director of the St. John Human Development Council,

working to address that issue of energy poverty. Randy, good morning to you. Good morning. How do you define energy poverty? Well, there's no established definition of energy poverty, but I think most would concede that it refers to the condition where households or individuals struggle to afford adequate energy to meet their basic needs, heating, cooling, lighting, empowering essential appliances. It's impacted by several factors, Matt. I mean, certainly low incomes experienced by New Brunswickers, whether it's median household income or economic family median income, New Brunswick tends towards the bottom of the 10 provinces.

We have 40% of workers in New Brunswick that don't earn a living wage. We have increasing numbers of folks on social assistance. During COVID and served, they be due markedly, but we're back to pre-pandemic levels of people on social assistance.

Caseloads increased by 10% last year, 129,000 people in the province. That's a huge increase. And serve, they, they be do markedly, but we're back to pre pandemic levels of people on social assistance, caseloads increased by 10% last year. 129 cases were added in January, almost 39,000 New Brunswickers are in social assistance now. What are you hearing about the choices that people have to make? Again, we heard people selling off guitars and parking the car in the snowbank and taking the

bus because it's too expensive. What are you hearing? Well, a lot of the heat or eat situations that folks are in, there are certain cohorts of the population that are really struggling. We constantly hear from fixed income seniors, particularly women that are relying on OIS and GIS

and women didn't accumulate CPP credits a lot because a lot of women's work in the last century was unpaid. So in the absence of rent controls in New Brunswick it wasn't uncommon to have rents increased by two or three hundred dollars a month and then extra utility charges of you know twenty or thirty dollars and the math no longer works. You hear from Enby Power that there are these payment plans, programs that offer free heat pumps and insulation to perhaps, you know, you could turn the heat down if the insulation is a bit

more robust in your home. Are those steps in the right direction in terms of addressing that issue of energy poverty? Sure, I think there are four principal pillars in a comprehensive energy poverty strategy. And that was our position before the energy and utilities board in the last general rate application. And New Brunswick does have some of those pillars. It does provide emergency fuel benefits, but we have a question always of how much is in that plot to be

distributed. It does have customer rules, which can impact greatly the situation of low-income residential rate payers. 13% of rate payers in 2023 missed a payment or renegerers. More than 3,500 individuals had their homes cut off and were disconnected. And there's a huge waiting list for those heat pumps that MBFH talks about. Over 9,000 people currently are on the list. So those are the pillars of energy poverty. There's a

glaring heat. There's one in four that New Brunswick is missing that you folks in Ontario enjoy through the electricity support programs. We don't have a low-income rebate for low-income ratepayers, and that's a glaring hole and a glaring omission. Yes, we have customer rules, but they have to be tweaked. Yes, we have energy efficiency programs, but they have to be more fully funded and accessible. We did get a bone from the EUB in the last rate hearing where they agreed that they would now ask the utility to disaggregate the income of rate payers. Right now it's an LMI low market, low to moderate

income threshold for that $70,000. But we wanted to look particularly on the interest of low income. So going forward, the utility has to look at low income rate payers together with low and moderate rate payers. I'll let you go, but the last thing is just the Premier, Susan Holt said that the provincial portion of the sales tax is going to be removed from power bills starting later on

this year. What else do you want to see from government? Well, I want to see a low-income rebate. I want to see what Nova Scotia has done like a universal services program, what you folks in Ontario have. It's very hard to advocate effectively in New Brunswick. We're the only province without a dominant urban area, a street census metropolitan areas that with combined population are less than Halifax. It means community nonprofits in those communities are flat out containing things. And so the chance for us to advocate wholeheartedly for systems change is difficult. I appreciate your perspective on this.

It is something, we talk a lot about cost of living. And this is a snapshot of how that crisis, such as it is, is being felt specifically in one province in this country. Randy, thank you very much. Pleasure. Thanks for calling. Randy Hatfield is executive director of the St.

John Human Development Council.