01/15/2014 04:41 EST | Updated 03/17/2014 05:59 EDT

Board approves NB Power plan for repayment of Point Lepreau deferral account

FREDERICTON - New Brunswick's Energy and Utilities Board has approved a plan by NB Power for the financing of a $1 billion deferral account associated with the refurbishment of the Point Lepreau nuclear power plant.

Utility spokesman Brent Staeben says the account includes labour and financing costs, and the cost of replacement power while Point Lepreau was out of service.

Staeben says the Crown-owned utility will make equal monthly payments to pay down the deferral account over the expected 27-year lifespan of the reactor.

He says the plan will allow the utility to keep power rate increases at about two per cent a year over the next 10 years, while also paying down its debt by $1 billion.

When the refurbishment began in 2008, it was expected to cost $1.4 billion but NB Power says that ballooned to about $2.4 billion when technical problems and delays extended the project three years longer than expected.

In July, a memo from the Prime Minister's Office suggested the full cost could be as high as $3.3 billion when cost overruns from NB Power and Atomic Energy of Canada Ltd. are taken into account.

NB Power has said the cost of the project to the utility was $2.4 billion.