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The following statement was issued today by Consumer Advocate, Dennis M. Browne, Q.C. Public Utilities Board's experts release final report-Newfoundland Power's rate of return should be 9% Newfoundland is forecast in 1998 to have the highest growth rate among the Provinces and Canada forecast to have the highest productivity among G7 Countries. Two professors from the University of Toronto have advised the Public Utilities Board and therefore, Newfoundland Power's rate of return should be lowered form 11% to 9%. Doctors William Waters and Ralph A. Winter, have appeared before Public Utilities Boards throughout the country. Their report states"... the elimination of the Federal Government Deficit and the dramatic lowering of the Provincial Government Deficit has laid the foundation for an increase in consumer investor confidence and a reduction in economic uncertainty generally". The Professors stated that with the elimination of the deficit, the risk of higher taxes is greatly diminished and the uncertainties with inflation are reduced as well. Long term Canada Bonds are yielding well under 6%, a lower rate in more than a quarter of a century. This level of long term interest rates is the central fact relevant to the establishment of a fair rate of return on common equity for Newfoundland Power. The Professors allow a return in the range 8.25% to 9.0% down from the current rate of 10.75% - 11.25%. Consumer Advocate Dennis Brown stated, "This is a very important decision for the consumers of the Province. If the Board accepts this report, consumers can expect to see reduced electricity rates this summer. The report clearly indicates that Newfoundland Power has been overearning. This report means that consumers collectively can save in excess of $12 million in electricity rates and individual bills will be reduced in a range of 3%. The Public Utilities hearing to consider the report is scheduled to commence May 25, 1998. Contact: Dennis M. Browne. Q.C., tel:(709) 754-1800, fax:(709) 754-2701, e-mail: mgk@roadrunner.nf.net
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