Nova Scotians are being asked to pay an additional $7 per month for electricity starting next year but the public isn’t getting to hear much of the evidence.
The second day of public hearings into the rate increase were mostly held behind closed doors before the provincial Utility and Review Board, which sets power rates in Nova Scotia.
If approved, this will be the sixth power rate increase in nine years, with the average residential customer paying $244.08 every two months to keep the lights on, according to Nova Scotia Power.
Several consultants criticizing the proposed rate increase for homeowners and businesses testified in camera to the three board members hearing the case.
Other information about Nova Scotia Power’s coal contracts, the utility’s credit rating and mercury emissions were also marked confidential for only lawyers, consultants and board members to view.
One consultant testified Nova Scotia Power shareholders should pick up the tab for the utility ordering excessive amounts of coal in 2009, which resulted in higher carrying charges.
"I stand by my analysis of the costs borne by customers due to additional coal handling costs incurred in 2009 and would ask the board to consider that a portion of those cost should be borne by NSP and not the ratepayer base," Colin Gubbins, a U.K. coal consultant with McCloskey Group, told the board Tuesday.
He was hired by two of the province’s largest consumers of electricity, paper giants NewPage Port Hawkesbury and Bowater Mersey, which are facing an 11.3 per cent hike in power rates.
He also testified he could not find any evidence of Nova Scotia Power trying to renegotiate the coal supply contracts.
Gubbins criticized Nova Scotia Power for testing pricey low-sulphur coal during a time of year when electricity demand is high and requires more coal be burned. The utility was using the coal to ensure it met environmental rules.
The utility conducted its mercury testing in November and December of 2009, which resulted in higher fuel costs and environmental emissions that were much lower than regulations required, Gubbins testified in written evidence.
"It is unclear why ratepayers should incur additional costs in 2009 on account of a requirement effective in later years," Gubbins stated in the submission.
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 power customers money on their power bills. It extended until 2014 the deadline for the utility to lower its mercury emissions to 65 kilograms a year from 168 kg.
The deadline extension from 2010 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.
On Monday, a proposal was put forth to phase in the power rate increase over three years, but that was rejected by Nova Scotia Power.
The hearing continues today in Halifax.
Board chairman Peter Gurnham has stated a decision would probably be made in late November.
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