Electricity rates in the province will take a jump on July 1 as a result of a decision of the Public Utilities Board on Tuesday.
The average increase will be 5.9%, according to the PUB official statement.
No word yet on a benefit dinner to help the average consumer pay the increases.
-srbp-
Strange as it might seem, the disproportionate growth of the Executive Council budget as a share of overall government spending is attributable to the Office of the Chief Information Officer.
The Executive Council went from 0.8% of the annual capital and current account budget to 1.6% in the space of two years, 2004 to 2006. It climbed up again in 2007 and 2008.
OCIO - or NLCS v. 2 - is the controller of all computer resources and personnel within government. Over 200 employees, mostly in St. John's, and a budget which is twice that of the entity to which it nominally belongs. Big Brother, it seems, is a fiscal bandwidth hog like few others.
To be fair, ICIO's budget includes the budgets that used to be distributed around various government departments; it's not surprising it is a huge cash sucker.
But to be even more fair, like all bureaucracies, OCIO will continue to accumulate staff and budget allocations using every advantage that comes from being the information controller for all government working directly for the most central of central agencies.
The cash levels and the staff allocations are - after all - the only performance indicators any bureaucracy worthy of the name actually understands.
-srbp-
A quick flip to the current budget showed the same break down of information. Make some minor adjustments for changes in some departments over the past 16 years and - vie-oh-la - there is a chart.
Further research and analysis concerning various sectors of the economy were undertaken during Phase 2, and a public consultation paper was published to give the people of the Province an opportunity to have a say in the vision, guiding principles and actions that have become the strategic economic plan. The Advisory Council on the Economy (ACE), an independent advisory group comprising representatives from business, labour and other groups, co-ordinated the release of nearly 11,000 copies of the consultation paper, and in the fall of 1991, public consultations were held in 16 locations across the Province.
-srbp-
"Part of what we are doing over here is looking for new investments and we'll be promoting the refinery in terms of attracting a partner, so hopefully this project's going to continue".Last week, NLRC director Brian Dalton told an oil and gas industry conference in St. John's that NLRC was actively seeking investment in several areas of the world, including the Middle East, for the stalled project.
NLRC management is currently working with its advisors to determine the optimum method of restructuring, which may include the sale of its assets. A further update will be provided at a later date once key decisions are made.Earlier this week, NLRC director Brian Dalton told the annual NOIA oil and gas conference that the company was seeking investors in the Middle East, India and the Far East.
Dalton said the company's problems with financing are "due to the deterioration of global capital markets."By contrast, as Bond Papers previously noted, Dalton told the Financial Post in April 2007 that the project would only succeed if the company could find one major oil player.
At the same time, Altius is also pursuing a feasibility study on a second refinery in the Come by Chance area. The study was announced in February by Premier Danny Williams and then-energy minister Ed Byrne. The announcement was highly unusual since government [apparently - ed.] played no role in the [apparently - ed.] entirely private venture.
Development of the plan lay with a economic planning group, appointed by cabinet in the summer of 1990 under the chairmanship of the premier's chief of staff, Edsel Bonnell. The group brought together a diverse set of individuals with an equally diverse set of ideas. There were within the group contending ideas, as former chairman of the Economic Recovery Commission Doug House describes in his book Against the tide.
"I can't be overly optimistic that we will achieve it by next week," said Williams on Friday, but said a 25-per cent chance is a fair statement that an announcement will come next week. "I can tell you, though, that I'm extremely confident that this is going to get done in reasonable time frame.".That was the Telly version. Other media carried similar remarks either from the Premier or from his spokesperson who used, one must note the exact same words about the percentage chance of an announcement.
Williams said the confidentiality part of the agreement is the biggest hold up, especially now that the province owns an equity stake in Hebron.
Our economic vision for Newfoundland and Labrador is that of an enterprising, educated, distinctive and prosperous people working together to create a competitive economy based on innovation, creativity, productivity and quality.Two of our set of eight guiding principles for economic development are worthy of repeating today:
1. The only way to effectively eliminate the duplication that presently exists and would continue to exist if Hydro were simply privatized on a stand-alone basis would be a merger. All of the expert advice available to government recommends such a merger.Why is Hydro and Government negotiating only with Fortis?
2. The newly merged company would be neither Fortis, nor Hydro, but a true combination of the people, assets and shareholdings of Hydro and Fortis.
3. The percentage of the new entity that is coming from the government's ownership of Hydro is the majority interest in the new company, and will then be sold to investors in Newfoundland and Labrador, throughout Canada and the world by a public share offering.
1. Newfoundland Power, a company wholly owned by Fortis, is the only other electrical utility in the province and it distributes electricity to 85 % of all electrical customers in the province. Any effort to restructure the industry in the province must include Fortis, and only Fortis.Will the Government get fair value for its investment?
2. The advisors and government are of the opinion that the most efficient operating structure for the electrical industry is to have a fully integrated operation for the generation, transmission and distribution of the product to the customer, and that can only be achieved by negotiating with Fortis.
3. We do not want control to be with another corporation outside the province and we do not want private interests, either within or outside the province, to buy Hydro. Therefore, it is not appropriate to seek bids for Hydro. The interests of the province will be best served if its electrical industry is a widely held public company that cannot be controlled by any group either within or outside the province and can raise the capital required for future growth of the industry.
1. Most definitely, Hydro and government's financial advisors are among the best in the world. Their projections indicate a very attractive value can be achieved and that there will be a profit to the people of the province from the privatization of their investment in Hydro.How will the province's financial position be improved?
2. The government will not privatize Hydro, either in a merged entity or on a stand-alone basis, unless the value received is fair and is consistent with values other governments have received in similar privatizations.
3. The government will only agree to proceeding with a transaction with Fortis if the proceeds are at least equal to or greater than would be received by privatizing Hydro on a stand-alone basis.
4. Government will obtain an opinion from recognized investment bankers that the proposed transaction is fair to the taxpayers of the province. Without such an opinion there will be no merger.
1. The guaranteed debt of Hydro represents approximately 18% of the total direct and indirect debt of the province. This will be significantly reduced immediately, and completely eliminated over the longer term. Hydro's current debt and equity today is approximately $1,250,000,000.Will this mean that there will be an increased outflow of capital from the province through payment of dividends?
2. The province will receive a substantial amount of cash from the profitable sale of the securities that it will receive in the privatized company. This cash will be used to reduce the province's debt by lowering our future borrowing requirements, thus saving current account interest expense, which means avoiding tax increases and/or government program cuts that would otherwise occur.
I believe the answer is NO. More than 90% of Hydro's current interest payments are to institutions outside the province. While part of the debt will be converted to equity, dividend payments won't make us worse off. Thousands of Newfoundlanders and Labradorians will be encouraged to invest in the shares of the new entity, thus keeping more dividends in the province. In addition the retained profits in the new utility will be reinvested in new fixed assets within the province, no different than what occurs now. In total, more money will remain within the province.Will this assist the province's credit rating?
1. The major U.S. credit rating agencies, Standard & Poors and Moody's visited with me and senior ministers and officials earlier this year. They were strongly supportive of government's plans to restructure and privatize various crown agencies including Newfoundland and Labrador Hydro, as well as our other financial management initiatives.What will be the government's on-going role in the electrical industry?
2. The province's total direct and indirect debt as a percent of gross provincial product is 61.5%, the highest in Canada. Financial institutions frequently emphasize this when commenting on the province's financial state or its credit rating. The elimination of the Hydro debt and the reduction of future debt and borrowing requirements from privatization can only be positive, and will result in improved creditworthiness.
1. The new company will be totally subject to regulation by the Public Utilities Board in respect of all of its electrical utility activities.
2. Government will still be responsible for the regulatory policy regime of the electrical industry. We will be introducing a new Electrical Power Control Act that will ensure the people of Newfoundland and Labrador, and specifically the consumers, will continue to have an efficient, fair and reliable electrical industry.
3. The restructuring and privatizing of the industry will be governed by a Privatization Act which will outline the policies under which the new company will operate. This Act will cover major policy issues such as ownership rules, to ensure regulation and management of the industry remains within the province and not with other organizations in Canada or foreign countries.Will electrical rates increase?
4. The government will continue to control and be responsible for the development of future electrical development because it will retain ownership of Churchill Falls Labrador Corporation, The Lower Churchill Development Corporation, all other Labrador water rights, all undeveloped island water rights, and the policy direction for non-utility independent generators and alternate power sources.
1. Rates in the future, as now, will only be set after hearings by the Public Utilities Board. Under any of the alternatives of the industry, including leaving things as they are today, rates will increase as costs increase.What will be the impact on the employees and the unions?
2. Privatization, whether by merger or on a stand alone basis, will cause some additional rate increase beyond that which would otherwise occur in the first five years. That additional increase due solely to privatization should average about 1 % per year or less. Merger and privatization should result in lower rate increases beyond that five years.
3. Any rate increases must be considered in light of the benefits to the provincial treasury of privatization. Generally speaking the more the people as taxpayers get from the sale the more the same people as ratepayers will have to pay in the future. Government's objective will be to achieve the greatest fair return we can get while at the same striving to keep any increase at a minimum.
1. One of the objectives of the industry restructuring is to improve operating efficiencies. Merging two large utilities such as Hydro and Fortis/Newfoundland Power will result in the elimination of certain areas of duplication in management, administration, and maintenance. These will be identified and a fair and equitable program will be developed to accommodate early retirement, voluntary severance and position redundancies.Concluding comments
2. The Unions will be involved in the merger process if a transaction is agreed upon. So will the non union employees.
3. It is premature to speculate on numbers or specific areas of operating efficiencies that will result.
1. To create a more efficient electrical industry.I hope my comments today have helped explain how we arrived at the strategic decision to begin a restructuring process for the electrical industry; that we are going about it in a careful and responsible way; and that the achievement of our objectives will be in the best interests of all the people of Newfoundland and Labrador.
2. To be fair to the current public shareholders of Fortis and Newfoundland Power and to the electrical utility ratepayers of the province, and
3. To maximize the proceeds of privatization of Newfoundland Hydro for the people of this province.
Scope of the contract calls for Cameron (NYSE: CAM) to provide 13 subsea wellheads and Christmas trees, control systems, manifold components, flowline connection systems and engineering and project management support.
Public appearances by cabinet ministers – whether it's a speech or an interview – are carefully staged, starting with a "message event proposal" vetted by the Privy Council Office, the bureaucratic wing of the Prime Minister's Office (PMO).
And in a marked change from previous governments, now even basic demands for information from reporters, once easily fielded by department spokespersons, are sent to this office for review – and often heavy editing – before they are okayed for public release, government insiders say.