NB Power touted a $15M rebate it expected to claw back a year later

In December 2022, NB Power acting president Lori Clark announced customers would share $15M in rate rebates beginning in April, calling it 'a good news story for customers' that would soften an 8.9% rate increase to 7.9%. New rules from the New Brunswick government require the utility to rebate or surcharge each April depending on whether its accounts are over or under budget at October 31. NB Power's books showed a $28.5M paper surplus at that date, which Clark attributed to 'improved hydro flows, as a result of improved export margins, and a hedge transaction'.

What the announcement left out was that the surplus was transient. Most of it came from fuel-price hedges against oil, coal, gas and uranium — prices rose, inflating the hedge values at the October measurement. But NB Power consumes most of its fuel in winter, after the measurement. Exercising the hedges and booking the fuel costs would flip the surplus into a full-year deficit. Expert Robert Knecht told the utilities board the yo-yo proposal was 'irresponsible' — 'accounting legerdemain': the $15M paid in 2023 would be clawed back through a 2024 surcharge, leaving customers no better off.

A $15M rebate from April 2023 that the utility's own evidence expected to be clawed back from the same customers in 2024

The October measurement date rewarded a transient hedge windfall that winter fuel consumption would erase.

NB Power promoted the rebate as a customer benefit without disclosing the expected 2024 clawback.

The rebate was announced while the same utility was applying for an 8.9% rate increase.

A mechanical rebate rule keyed to one accounting date invites position management rather than genuine affordability relief.

Announcing a benefit you know is temporary buys a headline and a later bill — customers remember who told them it was good news.

The Energy and Utilities Board was hearing the 8.9% application alongside the rebate scheme. Knecht's evidence projected the variance accounts would 'drop into a significantly unfavourable position' once winter fuel costs landed, factoring the $15M payout into the next October's calculation — and the 2024 surcharge that would take the money back.