NB Power witnesses at rate-hike hearing challenged about executive pay raises

Three NB Power vice-presidents were challenged Monday on their personal responsibility for the utility's financial problems and questioned about whether they deserved raises this year as the utility began its annual rate hearing and grilling in front of the New Brunswick Energy and Utilities Board.

Keith Cronkhite, Lori Clark and Darren Murphy were sworn in as a three-person panel to give evidence in support of NB Power's requested two per cent overall rate hike beginningApril 1, which includes a 2.3 per cent increase for residential customers.

Theyare the first of 14 utility witnesses who will be answering questions for most of the week from a variety of groups, industries and citizens investigating the reasons driving the proposed increase.

The hearing is being held in the shadow of growing uncertainty about the affordability of NB Power's carbon emissions, the health of its nuclear plant, and its ability to cope with increasingly destructive storms.

Hearing gets personal

But it also veered into the personal.

Anti-nuclear activist Chris Rouse, who is one of two non-lawyers registered to ask questions at the hearing, called the three NB Power vice-presidents "lifers" for spending most of their careers with the utility and wondered whether they were partially responsible for its financial troubles.

Do you think you deserve a raise?- Chris Rouse, anti-nuclear activist

He then asked whether they felt they were entitled to raises this year, a decision Murphy said would be made by others.

"That's not what I asked," said Rouse. "Do you think you deserve a raise?"

Murphy said it's not relevant what he thinks.

• NB Power seeks average 2% rate hike for all customers next year
• NB Power predicts much higher rate hikes after carbon tax

Rouse then said he would be opposing the portion of the rate hike that will be used to finance raises.

Subsidies criticized

Also questioning the three vice-presidentsMondaywas former utility employee Greg Hickey, who has been critical of the way NB Power subsidizes several large industrial customers.

Keith Cronkhite acknowledged the large industrial renewable energy purchase program, where NB Power buys renewable energy from large mills at a high price and then resells it back to the same mills at a lower price, often involves phantom transactions.

Cronkhite said NB Power often never takes possession of the electricity it buys under the program since the mills consume it as it is produced.

The program costs NB Power several million dollars per year and is expected to grow larger next year.

Goal to reduce debt $1B

NB Power has been pursuing a long-range goal of paying down $1 billion in debt but has fallen well behind on that plan. It missed its profit target last year and again this year by nearly $120 million combined, although that was before accounting for last month's ice storm.

It has also already announced the likelihood of missing next year's profit target, even if it wins a two per centrate increase.