New Brunswick’s Energy Challenge

1. New Brunswick’s Energy Challenge A presentation by Kurt Peacock 2007/08 Crabtree Scholar in NB Public Policy UNBSJ

2. The price at the pumps is simply one indication that New Brunswick is facing an energy challenge... The price per litre of gasoline in the Fall of 2008 is roughly 40 cents more than 2 year ago Contrary to what some industry individuals insist, gas regulation appears to be working The escalating price is a result of global factors, although consumers can expect some relief this winter NB Power purchases its fuel 18 months ahead of time, so painful power rate increases are likely coming

3. The Energy Challenge is especially pressing on low-income households, whose incomes are not keeping pace with expenses

4. This report was developed through partnerships with:

5. In Saint John’s very high poverty neighbourhoods, the majority of dwellings are rented. These neighbourhoods are more dependent on government institutions like the Rentalsman, and they are more vulnerable to issues like energy poverty. Percentage of dwellings that are rented

6. In the inner city of Saint John, residential growth has become stagnant, especially in the most vulnerable neighbourhoods. In the affluent suburbs, housing construction is on pace with national trends.

8. The Energy Challenge is seen in the number of NB households whose power is disconnected

9. A question of justice: NB Power charges its consumers a much higher monthly service charge than its provincial counterparts This represents an effective toll on the right to use electricity

10. A question of justice: under its current rate design, NB Power charges a higher rate per kWh to its smallest customers than to its largest The declining block rate represents an income redistribution from poor NB residents to large consumers of energy

11. Because of Higher Energy Prices, small consumers deserve greater government oversight on Energy • Despite having the largest refinery in Canada, NB residents have historically paid more than the Canadian average at the pump • Regulatory institutions like the Energy and Utilities Board (which regulates both electricity and gasoline)are meant to serve the best interests of NB residents, but are often ignored by government, general public

12. If we can have a consumer advocate for car insurance, why not energy? • The current provincial government pledged a more activist role in energy, but so far has been principally concerned with promoting an ‘energy hub’ • New Brunswick residents need a consumer watchdog on the energy file, to ensure that the decisions being made by NB Power and at the EUB are in the best interests of small consumers

13. What should be done? Some Ideas… • More co-operation between Efficiency NB and low-income communities should be encouraged. The corporation currently has almost $10 million in its annual budget, yet little progress has been made in addressing energy poverty • Residents need to demand that our power rate design is not discriminatory toward small consumers (i.e. no declining block rate, lower monthly service charges) • Pressure should be put on NB Power to lower its interest penalty from credit card levels • Stronger oversight on the energy file should be encouraged, including the establishment of a consumer advocate • All new non-profit housing built or funded by NB gov’t should meet the highest efficiency standards • The idea of a provincial ‘energy hub’ should recognize that the energy consumer comes first