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Newfoundland Power seeks to raise electricity rates 1.2%

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Newfoundland Power seeks to raise electricity rates 1.2%

Newfoundland Power Inc. is proposing an average 1.2% electricity rate increase for residential and commercial customers by March 1, 2019, according to its 2019-2020 general rate application filed with the Newfoundland and Labrador Board of Commissioners of Public Utilities.

"Over the past five years, we have invested approximately [C]$500 million in our provincial electricity system," President and CEO Peter Alteen said in a June 1 statement. "Establishing a fair and reasonable future return on this investment is a component of this rate increase."

In its application, the company cited cost changes ranging from increased operating costs to lower employee future benefits expense which amount to a required 0.7% increase in revenue, the rebalancing of 2019 and 2020 supply costs from Newfoundland and Labrador Hydro resulting in a decrease of 0.7%, and an increase in Newfoundland Power's ratemaking return on equity for the 2019 and 2020 accounts for an increase of approximately 1.2%.

The general rate application indicated a forecast average rate base of C$1.15 billion for 2019, and C$1.18 billion for 2020, as well as forecast revenue requirements from customer rates of C$661.5 million for 2019 and C$664.1 million for 2020.

It also called for a rate of return on average rate base of 7.47% for 2019 and 7.49% for 2020, and recommended a return on equity of 9.5% for the next two years.

Newfoundland Power is the primary distributor of electricity on the island portion of Newfoundland and Labrador, and it purchases 93% of its energy needs from Newfoundland and Labrador Hydro.