Newfoundland and Labrador’s Consumer Advocate Warns of Looming “Capital Cost Crisis” for Power Grid
In a recent assessment, Newfoundland and Labrador’s consumer advocate, Dennis Browne, has sounded the alarm about an impending “capital cost crisis” that threatens the province’s power grid. His plea was directed to the Public Utilities Board (PUB) during a submission made on November 6, where he emphasized the necessity of scrutinizing new expenditure requests from Newfoundland Power.
Browne asserted that the Island Interconnected System (IIS)—the primary power grid for the province—is on the brink of a financial crisis due to prior decisions made by Newfoundland and Labrador Hydro and their projected future plans. He clarified that while Newfoundland Power is not directly responsible for this crisis, there are proactive steps the utility can take to alleviate the financial burden on ratepayers.
Earlier in June, Newfoundland Power sought approval from the PUB for $140 million in new expenditures covering the timeline from 2026 to 2028. In addition to these requests, consumers have already experienced an average rate hike of seven percent effective July 1. Browne emphasized that ratepayers have a right to transparency regarding the justification for this increase in expenditures and the utility’s commitment to providing power at the lowest possible rates while upholding reliability and environmental stewardship.
The situation has been exacerbated by Newfoundland Hydro’s ambitions for significant new power capacity, which, alongside the cost overruns associated with the Muskrat Falls project, presents a daunting financial challenge for consumers. Browne described this scenario as an “enormous burden” on residents, who could face soaring costs in the near future.
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Browne’s 20-page submission included seven recommendations aimed at guiding Newfoundland Power towards better expenditure management. A notable recommendation was to reject the proposed projects at Mount Carmel Pond Dam on the grounds that they would incur excessive costs with minimal benefits. Furthermore, he suggested opposing a plan for a customer correspondence modernization program, projected to cost approximately $1.95 million, due to a lack of demonstrated demand from ratepayers.
To bolster accountability, Browne urged Newfoundland Power to enhance its planning processes, including the creation of a strategic distribution plan that meets the burden of proof for justifying additional expenditures. He also called for the finalization of a capital budget application that would require the utility to assess the risks associated with new projects.
Another significant point raised in his submission was the need for Newfoundland Power to transition to smart meters, ideally by the end of 2026. Browne noted that eight other provinces have either already adopted smart meters or have plans to do so, and criticized Newfoundland Power for lacking a coherent strategy that could ultimately lead to lower rates for consumers.
As the situation develops, the PUB will have the crucial task of evaluating these expenditures and recommendations, ensuring that the interests of consumers are safeguarded amid the financial challenges facing the province’s power infrastructure.
