Correcting the Record on Industrial Electricity Costs

The following statement is being issued to correct inaccurate and false information circulated recently in media coverage by the Leader of the New Brunswick Green Party and others concerning industrial electricity rate competitiveness in New Brunswick.

A cursory survey of posted industrial electricity rates in Canada (publicly available on the Government of New Brunswick website) shows that New Brunswick rates are not competitive. At $93.43/MWh, the average industrial electricity rate in this province is 22 per cent higher than the Canadian average of $72.68MWh. But even this doesn’t paint the full picture.

Key to the New Brunswick context is the province’s position as a pulp & paper competing jurisdiction. It is therefore disingenuous to compare the province’s industrial rates to jurisdictions across North America that aren’t major players in the pulp & paper sector. A closer look at industrial electricity rates in Ontario, Quebec and British Columbia – the three largest competing jurisdictions for pulp & paper production – further points to the fact that New Brunswick lags far behind when it comes to industrial electricity prices.

• Quebec and British Columbia’s industrial electricity rates, at $52.26/MWh and $65.09/MWh are respectively 44 per cent and 30 per cent below the New Brunswick rate.
  
  
• In Ontario, the industrial electricity rate is also lower, at $82.76/MWh. It’s important to note that energy intensive industries in Northern Ontario also benefit from the province’s Northern Energy Advantage Program which provides manufacturers, including pulp & paper producers, with a $20/MWh credit. This program ensures industrial energy consumers can expect competitive, stable and predictable rates and is additive to other programs like Ontario’s Comprehensive Energy Plan and Industrial Conservation Initiative that further reduce rates.
  
  
• Unlike the case for industrial consumers, the New Brunswick residential electricity rate is 10 per cent below the Canadian average.
  
  
• New Brunswick Power’s electricity rates are uncompetitive across Canada because of a legacy of high debt levels, but more importantly due to extended downtime and poor performance of generating assets like the Point Lepreau Nuclear Generating Station. According to NB Power’s recently commissioned benchmark report looking at 40 nuclear facilities, Lepreau was ranked 36^th.
  
  
• It should be noted that in the last two decades, the province has experienced a shrinking industrial base with New Brunswick industrial electrical sales 20 per cent lower than 20 years ago.

J.D. Irving, Limited has repeatedly and consistently argued that New Brunswick industrial electricity rates are unsustainable for any business where electricity is a major cost input. It’s a situation that is only going to get worse with additional rate increases set for this April, and repercussions will be felt throughout the province.

New Brunswick needs a competitive industrial sector backed by competitive electrical rates to compete globally from home, allowing New Brunswickers to support their families, jobs and the economy.