Newfoundland Power receives ruling on automatic adjustment formula

Source: Newfoundland Power

Newfoundland Power Inc. has received approval from the Newfoundland and Labrador Board of Commissioners of Public Utilities (PUB) to suspend operation of the automatic adjustment formula used to set the Company's rate of return on rate base for 2012.

The automatic adjustment formula was originally adopted in 1998 by the PUB. The formula is based on forecast long Canada bond yields and is used annually to determine Newfoundland Power's cost of capital for years between general rate applications.

As a result of the suspension of the operation of the formula for 2012, the Company's regulated return on common equity will remain at 8.38% and current customer electricity rates will continue in effect for 2012, both on an interim basis.

A full cost of capital review is expected to be held by the PUB in 2012.

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