Energy agreement offers significant savings: analysis17 February 2010
FREDERICTON (CNB) - New Brunswickers will enjoy significant rate savings under the new energy agreement, an international economic consulting firm concludes in a report released today.
NERA Economic Consulting re-examined its initial analysis of rate savings to determine how the announced changes to the energy agreement will affect New Brunswick ratepayers.
The report, tabled today in the legislative assembly by Energy Minister Jack Keir, concludes that ratepayers will receive about $5 billion in rate savings under the energy agreement with Hydro-Québec.
"Residential rates in the amended agreement will be lower than in the stand-alone case due to the five-year rate freeze, and this benefit grows over the five-year period," NERA states in its report.
In addition, NERA confirms in its report that residential and small business ratepayers will receive more than twice the savings of industrial customers under the final agreement.
NERA states in its report that residential and commercial customers will receive 68 per cent of the savings, while New Brunswick's industrial customers will receive the other 32 per cent.
NERA found that ratepayers will enjoy lower rates because the energy agreement will shelter NB Power from substantial future capital costs, increasing fuel prices and potentially significant costs of limitations on carbon emissions.
As announced in January, NB Power will remain a New Brunswick-government owned corporation. New Brunswick will receive $3.2 billion and a secure, affordable, clean supply of electricity large enough to meet its existing needs forever.
"These rate reduction benefits are made possible by replacing the expected costs of power supply from NB Power's existing generating plants with a lower-priced heritage pool of power from Hydro-Quebec," NERA states in its report.17-02-10