Despite cap, electricity bills are poised to jump 10.5% on July 1, says Newfoundland Power

On the heels of the Newfoundland and Labrador government finalizing its plans to keep power rates stable, Newfoundland Power says electricity bills are set to jump in less than two months.

Announced on Thursday, the province's proposed plan is to cap the residential domestic rate increases on the island of Newfoundland at 2.25 per cent annually — called rate mitigation — until 2030.

However, in a statement, Newfoundland Power said there are other rate increases coming.

Besides the 2.25 per cent increase as part of the rate mitigation plan with N.L. Hydro, there is a 6.7 per cent rate increase related to costs Newfoundland Power paid to N.L. Hydro in 2023. In addition, Newfoundland Power has applied to the Public Utilities Board for a 1.5 per cent increase to its rates.

All the proposed increases need to be reviewed by the PUB, but if they are approved would account for a 10.5 per cent increase in rates on July 1.

Energy Minister Andrew Parsons said the 2.25 per cent increase cap would mean a $300 electricity bill would be $307, as opposed to $500 without any mitigation. With the additional proposed increases from Newfoundland Power, that bill is more likely to be closer to $340.

Dan Meades, provincial coordinator of the Transition House Association of Newfoundland and Labrador, said there are people who can't handle this price hike.

"The truth is that $350 a year, on top of all of the other increases that we've seen for people living in poverty, can make a huge difference," Meades told CBC News.

There are a large number of people living in poverty who are already making decisions between paying for food and rent, and this will be another burden, he said.

"And so then energy and power rates on top of that continuing to rise just makes that poverty line go higher and higher and higher."

However he hasn't seen the provincial government bring in solutions to address poverty, like increases for income support or bigger increases in minimum wage. Instead, he said the government has increased taxes and fees, like drivers' registration, which results in people living in poverty disproportionately bearing the burden of these increases.

"All it takes is for that next bill that goes up high enough for people to fall below the poverty line. And suddenly those outcomes get a lot worse," said Meades.

Newfoundland Power also has another proposed general rate application before the PUB for 2025 to increase its rates by 5.5 per cent, as part of a filing it is required to do every three years.

"We have a responsibility to inform our customers, and want to provide a fulsome view of the estimated impact of costs on their electricity rates effective on July 1, 2024," Newfoundland Power president and CEO Gary Murray said in a statement on Thursday.