Smaller, more frequent power hikes proposed
Posted May 6, 2011 04:46:02 AM.
This article is more than 5 years old.
Consumer power rates are going up. The Question is, by how much?
Nova Scotia Power is deciding between asking for one large rate increases in 2012 or a series of small increases over the next three years.
The corporation had said it would seek a nine per cent increase from the regulator for 2012, but a second option was unveiled to stakeholders Thursday.
Under the Rate Stabilization Plan, customer rates would be increased by four per cent each year for three years, instead of the traditional approach.
“It’s designed to help our customers during this time of change when costs are increasing quite a bit,” Rene Gallant, vice president of regulatory affairs, told News 95.7 following the announcement. “These rate increases that we’ve seen in the past are very hard on them and we understand that.”
Last month, the utility started a public discussion with customer representatives in an effort to develop a multi-year approach to smooth increases in electricity rates between now and 2014.
However, there would be a cost to consumers.
A series of smaller increases would mean NSP would have to defer paying a multi-million-dollar fuel bill for three years with the recovery of deferred costs beginning in 2015.
An unpaid fuel bill is estimated to reach $139 million by the end of 2014.
The option is still being discussed.
“We have seen it in other jurisdictions,” said Gallant. “Mostly in the United States they have this kind of situation, but we haven’t tried it in Nova Scotia and we don’t know if customers will want to take this path.”
An application to change rates for 2012 needs to be before the Utility and Review Board this month.
