NS Power discusses Rate Stabilization Plan with customer representatives

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NS Power discusses Rate Stabilization Plan with customer representatives

May 5, 2011

HALIFAX, NS – Nova Scotia Power met with customer representatives today (May 5) to discuss a plan that would stabilize growth in electricity prices for three years. The proposed Rate Stabilization Plan would hold rate increases to four percent per year for 2012 to 2014 for each customer class.

“By using some short-term deferrals of expenses, we can smooth price changes for customers over the next three years,” said Rene Gallant, Vice President of Regulatory Affairs, Nova Scotia Power. “We strive to ensure that electricity prices are as low as possible for our customers, and that any price changes are as manageable as possible. This plan will help.”

Last month, NS Power initiated a public discussion with customer representatives aimed at developing a multi-year approach to smooth increases in electricity rates through 2014. The Rate Stabilization Plan builds on that effort.

In order for a rate change to take effect on January 1, 2012, Nova Scotia Power will be required to file a General Rate Application with the Nova Scotia Utility and Review Board (UARB) later this month. Nova Scotia Power has not yet made a final decision to make such a filing. General rates were last adjusted on January 1, 2009. Nova Scotia Power has been able to avoid filing a general rate application for three years, thanks to prudent management of expenses, tax credits from renewable energy projects, and the ability of the UARB to adjust fuel expense recovery through the Fuel Adjustment Mechanism (FAM).

“Our customers have benefitted from Nova Scotia Power being able to avoid a general rate application for three years,” Mr. Gallant said. “However, since 2009, we’ve made substantial investments in infrastructure, reliability improvements, and recruiting and retaining skilled workers. Those investments haven’t been accounted for in rates, and coal prices are continuing to climb.”

Using current rates, 2012 revenues would be $94.4 million less than forecasted requirements of $1.34 billion. Without the Rate Stabilization Plan, NS Power is forecasting average increases in general rates of 9 percent in 2012, four percent in 2013 and two percent in 2014. The Plan proposes to defer recovery of fuel cost increases for three years. Recovery of deferred costs would begin in 2015.

If approved by the UARB, new general electricity rates would take effect Jan. 1, 2012.