CBC.ca: Higher electricity rates on the way due to oil prices
Last Updated: Thursday, April 17, 2008 | 6:51 PM NT CBC News
Higher prices for oil mean that people in Newfoundland and Labrador will have to pay six per cent more for electricity as of July 1.
On Wednesday, Newfoundland and Labrador Hydro filed its annual updated fuel price projection for the Rate Stabilization Plan to the province's public utilities board. In a news release, Hydro said this year's update will mean an average increase of approximately six per cent.
Every year, the utility calculates the rate between what it thought it would pay for the oil it uses to generate electricity versus what it actually paid. The difference ends up being passed on to the consumer. The new rate goes into effect on July 1.
This year, it based rates on oil at $56.60 a barrel, but ended up paying an average of $71.45 a barrel.
The Rate Stabilization Plan is meant to protect electricity consumers from fluctuations in monthly bills as a result of rising oil prices, said the release.
On average between 15 and 25 per cent of the province's electricity comes from thermal generation such as burning oil at Hydro's Holyrood plant.
Hydro sells much of its electricity to Newfoundland Power, which sells it to homes throughout the province.
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