Nova Scotia Power is asking the province's Utility and Review Board for a rate hike of three per cent in each of the next two years for residential customers.

The utility said the increase will add about $3.50 a month to an average household's power bill in both 2013 and 2014.

If the increase is approved, residential customers will pay Nova Scotia Power an additional $37.6 million over the next two years — $18.6 million in 2013 and about $19 million in 2014.

Rob Bennett, the president and CEO of Nova Scotia Power, said he knows Nova Scotians are angry about rising electricity prices.

"Any rate increase is difficult for families and businesses," Bennett said in a statement.

"We're trying to minimize the impact on our customers. That's why we're proposing a plan that will stabilize rate increases and give us all time to adjust to the rising cost of providing electricity in Nova Scotia."

Nova Scotia Power blamed the need for the increase on troubles in the pulp and paper industry and the fact that NewPage Port Hawkesbury and Bowater Mersey Paper Company Ltd. have reduced payments to the utility. The company said the transition from coal to renewable energy was also driving up the price of power.

The uncertainty surrounding the shuttered NewPage Port Hawkesbury mill has cost Nova Scotia Power about $45 million, said René Gallant, the vice-president of regulatory affairs for the utility.

"We can't make up for the lost contributions from the paper mills," Gallant told reporters on Tuesday.

"Families and businesses will benefit from predictability and stability. Everyone will know what they will pay for the next two years."

If the plan is approved by the UARB, new electricity rates would take effect on Jan. 1.

Nova Scotia Power has raised its rates seven times in the last 11 years. The latest hike was earlier this year, when the base fee increased by 6.1 per cent in addition to a three per cent fuel adjustment hike.