HALIFAX, NS - Nova Scotia Power Inc. has asked its regulator for approval to reduce the fuel costs customers will pay next year. If the Nova Scotia Utility and Review Board (UARB) approves NS Power’s application, residential customers will see a rate decrease of 1.4 per cent, starting Jan. 1, 2010.
Customers pay fuel costs through a Fuel Adjustment Mechanism (FAM) approved by the UARB in 2008. The FAM reflects the actual cost of fuel used to make electricity and includes an annual adjustment for over-recovery or under-recovery of actual costs in the previous year.
“We work hard to manage fuel costs on behalf of our customers,” said Alan Richardson, NS Power’s Vice President, Integrated Customer Services. “We have a fuel portfolio strategy that incorporates a mix of fuels with short-term, mid-term and long-term contracts, much like a balanced portfolio of RRSP investments. Our regulator has approved this approach and it is serving our customers well.”
The fuel strategy has enabled NS Power to take advantage of lower commodity prices in 2009, switch between fuels at its generating stations – such as burning natural gas at Tufts Cove in Dartmouth – and import cheaper electricity when it is available. Further fuel savings in 2009 have resulted from lower demand for electricity due to the economic downturn and customer commitment to energy conservation. The addition of new renewable generation will help strengthen price stability in the future.
If approved, the fuel-related rate decrease in 2010 will be from 1.4 to 2.1 per cent for commercial customers, and 2 to 3.3 per cent for industrial customers, depending on rate class. Rates for commercial and industrial customers are more heavily based on fuel costs than are residential rates. The total rebate to customers is expected to be about $22 million.
The reduction would equate to approximately $2.50 per month for the average residential customer who uses electricity for heat and hot water, and $1.25 per month for the average residential customer with non-electric heat and hot water.
The UARB has scheduled a hearing on the requested adjustment for Dec. 2. If approved, the reduction will remain in place for one year and then be replaced by the next FAM adjustment, following an application based on 2010 prices that will be made late next year.