Consumer Advocate Alerts on ‘Capital Cost Crisis’ Amid Newfoundland Power Assessment

Newfoundland and Labrador’s consumer advocate, Dennis Browne, has raised alarm over a potential “capital cost crisis” affecting the province’s power grid. This crisis could significantly impact local ratepayers, as detailed in his submission to the Public Utilities Board (PUB) on November 6.

Concerns Over Power Expenditures

Browne emphasized the need for a thorough review of Newfoundland Power’s recent request for new expenditures. He highlighted the looming crisis as a consequence of previous decisions by Newfoundland and Labrador Hydro, rather than a failure by Newfoundland Power itself.

The Island Interconnected System (IIS), which represents the provincial power grid, is at a critical juncture. In June, Newfoundland Power filed an application with the PUB seeking $140 million in new expenditures from 2026 to 2028. This request comes on the heels of a seven percent increase in power rates implemented on July 1.

Expenditure Justification Required

Browne insists that ratepayers deserve transparency regarding the justification for these expenditures. He questioned how Newfoundland Power intends to deliver reliable energy while keeping costs affordable and maintaining environmental standards.

The combination of rising costs and Newfoundland and Labrador Hydro’s search for billions for new power capacity poses an “enormous burden” for consumers, Browne warned. He described the impact of ongoing cost overruns at Muskrat Falls as particularly concerning.

Recommendations from the Consumer Advocate

Browne’s submission includes seven specific recommendations aimed at addressing these issues:

• Do not approve projects at Mount Carmel Pond Dam due to high costs versus minimal benefits.
• Reject the proposed modernization program costing approximately $1.95 million, as there is no demand from ratepayers.
• Enhance planning processes at Newfoundland Power.
• Create a strategic distribution plan to meet proof requirements for additional expenditures.
• Finalize a capital budget application focusing on quantifying project risks.
• Transition to smart meters by the end of 2026, to align with other provinces that have adopted this technology.

Browne highlighted that a proper plan for smart meters could potentially lead to lower rates for consumers.

As discussions about the provincial power grid evolve, the insights from the consumer advocate will be critical in managing the looming challenges facing Newfoundland Power and its customers.