Province attempts to curb July electricity rate hike

The provincial government is stepping in to reduce a planned electricity rate increase set for July 1, using a one-time credit to bring down the expected hike.

Premier Tony Wakeham has directed Newfoundland and Labrador Hydro to apply $45 million from the Rural Rate Alteration account to offset costs linked to Newfoundland Power.

Electricity rates had been projected to rise by about seven per cent. With the credit applied, the increase for island residential customers is expected to drop to roughly 2.25 per cent.

The province says it has asked Hydro, Newfoundland Power and the Public Utilities Board to ensure the credit is applied transparently. It is also calling for a longer-term plan to manage the remaining balance in the account.

While the move lowers the July increase, it relies on a one-time adjustment, raising questions about how future rate pressures will be addressed.