Halifax , NS – Nova Scotia Power announced that an agreement has been reached to settle the company's 2007 rate application.
The agreement was filed today with the company's regulator, the Nova Scotia Utility and Review Board (UARB). It has the support of almost all active intervenors, including the Consumer Advocate.
A central provision of the settlement is an agreement in principle that the UARB should establish a fuel adjustment mechanism for Nova Scotia Power . Such a mechanism will ensure that customer prices reflect the actual cost for fuel used to make electricity.
"With the price of fuel on worldwide markets continuing to be so volatile, it's in everybody's interest that there be an open, transparent way to reflect in a timely manner the actual cost of fuel o n the electricity bills of our customers," said Ralph Tedesco, President and CEO of Nova Scotia Power.
Pending approval by the UARB, the agreement provides for the following:
- a $43 million increase i n the overall revenue requirement for Nova Scotia Power , which is $38 million less than requested in the original rate application filed in October 2006;
- The decrease in the revenue requirement reflects an approximately $20 million reduction in the company's fuel budget and the postponement of the phase in of higher depreciation costs. Additionally, up to $8 million of fuel costs may be deferred, depending on gas sales margins; and
- effective April 1, 2007, an overall rate increase of 3.8 per cent, with residential customers seeing a *4.8 per cent rate increase.
The following elements of the original application were all agreed to under the settlement:
- rate base;
- return on equity:
- operating, maintenance and general expenditures; and
- regulatory amortizations.
The agreement calls on the UARB to hold hearings no later than July 15, 2007, to put in place a fuel adjustment mechanism.
“This settlement agreement involves a very broad cross-section of Nova Scotians – the vast majority of our customers, covering the residential, commercial and industrial sectors,” said Mr. Tedesco. “We’re pleased to have worked together on achieving this constructive agreement.”
* as revised on January 23, 2007