NS Power clarifies Annually Adjusted Rate filing

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NS Power clarifies Annually Adjusted Rate filing

November 9, 2011

HALIFAX – Nova Scotia Power is clarifying information related to a regulatory filing the company made on November 7, 2011. The filing relates to Annually Adjusted Rates, which are filed each November in accordance with Nova Scotia’s regulatory process.

Annually Adjusted Rates are affected by fuel prices, so they are set late in the year when Nova Scotia Power has the best information about fuel costs for the year ahead. The filing includes six different annually adjusted rates, one of which is the Generation Replacement and Load Following (GRLF) Rate.

Here are the facts:

  • The GRLF rate is available to customers who produce their own power. It is intended as a rate for back-up power they may need if they don’t make enough of their own energy. It is also available for additional energy supplied under the Bowater Mersey Agreement.
  • Nova Scotia Power filed a lower price for this rate on November 7th because, as discussed during recent general rate proceedings, fuel costs are forecast to be lower in 2012. The filing requests a 14 per cent reduction for this rate – from 6.226 cents per kilowatt hour to 5.332 cents per kilowatt hour. The customer savings associated with this rate reduction are expected to be less than $2 million in 2012.
  • When Nova Scotia Power forecasts a large reduction in load, there is also a reduction in fuel costs. This reduction in cost is passed through to all customers, and was part of the General Rate Settlement reached with customers in September. If the load reduction becomes permanent, other customers will also likely experience an increase related to the recovery of fixed costs.
  • The maximum amount of energy that any single customer can take at this rate is limited to the amount of energy that the customer can produce for themselves (i.e. if a customer produces 10MW, they could only take 10MW of energy at this rate).

What this filing is not:

  • This filing is not about a new rate. The GRLF rate has existed since 1989 and is filed every year in early November.
  • This filing is not related to the unfortunate economic circumstances of NewPage Port Hawkesbury or Bowater Mersey Paper Company. This filing happens every year at this time.
  • This filing is not a solution to the complex economic challenges facing the pulp and paper industry in Nova Scotia.

If approved by the UARB, these annually adjusted rates would take effect Jan. 1, 2012.