New Brunswick Premier Blaine Higgs is raising concerns about the Energy and Utilities Board’s (EUB) “carbon adjustor” charge that consumers have been paying since July. The EUB implemented the levy as a result of legislation passed by Higgs’ own government.
Higgs is questioning why the EUB initially set the cost higher than Nova Scotia’s in July, only to lower it based on a market-driven formula later on. In response to Opposition Liberal Leader Susan Holt’s critique of the carbon adjustor, Higgs stated that he had no understanding of what the number should be and called for an immediate review of the formula.
The carbon adjustor, which is currently set at 3.8 cents (or 4.3 cents with HST), was introduced in response to Ottawa’s clean fuel regulations. The purpose of these regulations is to incentivize oil refineries to produce lower-emitting fuels. Refineries that comply with the regulations earn credits, while those that do not are required to purchase credits, adding to their costs.
Holt argues that Higgs has the power to repeal the legislation and provide cost-of-living relief to New Brunswickers. She suggests that the adjustor should have been borne by producers and refineries rather than consumers.
The EUB uses a formula based on the California low carbon fuel standard to estimate the cost difference between conventional diesel and diesel with renewable ingredients. Initially, the adjustor cost was 6.1 cents in July, but market changes have led to a reduction to 3.8 cents this week.
In questioning the necessity of the adjustor, Higgs raised the larger issue of regulated pricing and whether it is the best approach for all of Atlantic Canada. Attorney General Ted Flemming also voiced blame towards the federal government, stating that the adjustor clause was a result of the province being forced to react to federal regulations.
As the debate continues, the EUB has the authority to review the effectiveness of the adjustor clause after six months. Meanwhile, Premier Higgs may consider repealing the gas-price setting legislation altogether. The discussion surrounding the carbon adjustor highlights the complexities of balancing environmental and economic considerations in the energy sector.
FAQ
What is the carbon adjustor?
The carbon adjustor is a charge implemented by the Energy and Utilities Board (EUB) in New Brunswick. It is intended to support the province’s compliance with federal clean fuel regulations by encouraging oil refineries to produce lower-emitting fuels.
Who pays the carbon adjustor charge?
Consumers in New Brunswick pay the carbon adjustor charge. The charge is added to the price of gas at the pump.
Why is the Premier questioning the carbon adjustor charge?
Premier Blaine Higgs is questioning the Energy and Utilities Board’s decision to set the carbon adjustor charge at a higher level than Nova Scotia’s and subsequently lower it based on a market-driven formula. He believes the charge should be reviewed immediately.
Can the Premier repeal the carbon adjustor legislation?
Yes, the Premier has the power to repeal the legislation that established the carbon adjustor. However, he is facing criticism from Opposition Leader Susan Holt for not taking action to provide cost-of-living relief to New Brunswickers.
What is the purpose of the carbon adjustor?
The carbon adjustor is meant to incentivize oil refineries to produce lower-emitting fuels by imposing a charge on those that do not comply with federal clean fuel regulations.