Prepare for a shocker

Nova Scotia Power wants to raise rates by another 6.5 per cent next year
By JUDY MYRDEN Business Reporter
Tue, Aug 17 - 4:53 AM

Nova Scotia homeowners are facing their sixth power rate increase in nine years after Nova Scotia Power applied to government regulators on Monday to raise rates 6.5 per cent starting next year.

The increase would cost the province’s 440,000 households an extra $13.35 per two-month billing period, or $6.68 per month, plus tax. The average residential customer has a bill of $244.08 every two months, according to a Nova Scotia Power internal memo inadvertently sent to The Chronicle Herald.

The utility is also seeking rate increases of 8.6 per cent for commercial customers and 11.3 per cent for industrial customers. The increases, if the provincial Utility and Review Board approves them, would take effect next New Year’s Day.

Nova Scotia Power needs to charge more to cover higher costs incurred this year for fuel to generate electricity, company president Rob Bennett said.

"Fuel is the largest cost in making electricity for customers," he said in a news release.

A hearing before the review board is scheduled for October.

Earlier this year, Nova Scotia Power forecast power rate hikes of 12 per cent for residential customers and 18 per cent for industrial customers so it could buy more expensive coal with reduced mercury content as the provincial government required.

But in late July, the Dexter government softened its pollution rules to save ratepayers money on their power bills. It extended until 2014 the 2010 deadline for the utility to lower its mercury emissions to 65 kilograms a year from 168.

"The government’s decision to manage mercury emissions differently over the next decade reduces the burden of rising fuel prices on customers — especially next year," Bennett said in a news release.

The extended deadline will reduce Nova Scotia Power’s fuel expenses by $60 million for 2011, the company says. It is forecasting fuel costs of $544.7 million for the year.

Premier Darrell Dexter said the proposed rate hikes are more reasonable than what was talked about earlier in the summer, but he’s still concerned about any increase.

"I’m not satisfied that the increase is what it is, but I am satisfied that we have made the effort that we could make in order to make the impact of the mercury emission targets as reasonable or as little as possible," Dexter said in an interview.

He said the province is still demanding that total emissions over the next 10 years not exceed the amount under the previous arrangement.

The premier said the government is working to reduce the province’s reliance on fossil fuels to generate electricity and that renewable energy sources will provide more stable pricing in the future.

Dexter said his government removed the provincial portion of the harmonized sales tax on power bills last fall to cushion the blow to consumers from continually increasing costs.

In its emailed memo, Nova Scotia Power said it is doing everything it can to keep costs down and it advises customers who cannot afford to pay more to contact Efficiency Nova Scotia for tips on how to reduce their use of electricity.

The email also says it is a "good-news story" that the company is asking for smaller increases than previously predicted.

Nova Scotia Power and its parent company, Emera, recorded lower profits in the last quarter but that is not behind the request for higher rates, the email says.

"We don’t make money on fuel, so it has no bearing on profits."

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UP, UP AND AWAY

Residential power-rate increases since 1996:

2002 3.1 per cent

2005 6.2 per cent

2006 8.6 per cent

2007 4.7 per cent

2009 9.4 per cent

Source: Nova Scotia Power

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http://www.thechronicleherald.ca/Front/1197337.html