Nova Scotia Power lays groundwork for further rate hikes
Posted Sep 21, 2011 09:44:12 AM.
This article is more than 5 years old.
Nova Scotia Power began its appeal for higher power rates by laying the groundwork for further increases in years to come.
President and CEO Rob Bennett told the Utility and Review Board the biggest challenge the company faces is that the province does not have a low-cost, primary energy resource which can be used to make electricity.
“The agreement we’re placing before you today will address the challenges of 2012, but as we discussed publicly this spring in open stakeholder sessions, we anticipate needing additional rate increase in the next several years,” Bennett told the board, Wednesday.
He said NSP is making investments in long-term, low-cost primary energy opportunities such as wind, biomass and tidal power, but that it would take more than one year to reduce the province’s dependency on fossil fuel.
“Nova Scotia Power proposed developing a multi-year plan to smooth rate increases, but we were unable to reach an agreement with stakeholders on this point,” he added. “Frankly, I understand their reluctance. It’s a new idea, and the future holds much uncertainty.”
Nova Scotia Power announced Monday it is now asking for an average increase of 5 per cent for all customers, effective Jan. 1, which would add approximately $6 per month to the average residential customer’s bill.
NSP was originally asking for an increase of 7.2 per cent.
The corporation is making other concessions in its settlement.
NSP agreed to defer recovery of any fixed costs resulting from uncertainty in the pulp and paper industry. Those costs would be recovered in 2013 or as part of the next general rate application.
The company is also seeking a smaller increase in profits or return on equity, of 9.2 per cent instead of 9.6 per cent.
Also, the cost of executive bonuses will be covered by shareholders and not ratepayers.
