Nova Scotia Power is defending the suite of rates and tariffs it wants to impose on renewable energy producers who use its grid to get into the retail electricity business.

"The tariffs are fair and transparent," Nova Scotia Power vice president Mark Sidebottom told a Nova Scotia Utility and Review Board hearing.

Regulators began hearings Monday to open Nova Scotia's retail electricity market.

The board is reviewing the tariffs NSP wants to charge renewable energy developers.

Independent wind developer Dan Roscoe told the board the charges will thwart attempts to open the marketplace.

"We don't think it was government's intention to do that," he said.

Behind the meter transition tariff

He and others object to the so-called renewable transition tariff, which is designed to recover a portion of NSP's fixed costs.

"No service is associated with the tariff. It represents the costs of assets that are no longer cost effective," he said.

Port Hawkesbury Paper also warned that so-called behind-the-meter customers who have their own private electricity source would for the first time be subjected to the transition tariff.

"Electricity customers in Nova Scotia that may wish to take alternative electricity service behind the meter would actually be in a worse position than they would have been absent the introduction of the renewable-to-retail legislation," Port Hawkesbury Paper lawyer James MacDuff told the board.

NSP officials confirmed it intends to levy the transition tariff to behind-the-meter transactions.

NSP says it's following government orders

Company officials repeatedly told regulators it is merely following principles spelled out in legislation passed by the McNeil government to open the market.

It says customers who remain with NSP should not be forced to subsidize the new market. The government also stipulated that new entrants and their customers must bear the cost of opening the market.

Eric Ferguson, NSP's director of regulatory affairs, told the board the tariffs ensure renewable producers pay a share of fixed costs of the system.

"If that was disallowed there would be a cost transfer to bundled customers, the customers of NSP would pay," Ferguson said.

'The costs are the costs'

NSP spokeswoman Sasha Irving told reporters renewable producers will remain part of the current system and the company is expected to step in when renewables are not available.

"[Renewable] customers are still attached to our grid and Nova Scotia Power is still providing back-up services to these customers," Irving said.

"The costs are the costs. The power will still have to be produced and we still have to produce the safety net for this market."

Department of Energy spokeswoman Michelle Lucas said the utility board hearings will establish the appropriate tariffs for the new marketplace, while protecting NSP ratepayers from rate increases.

"We are monitoring the discussion around behind-the-meter transactions and tariffs and want to allow the hearing to unfold before commenting," Lucas said in an e-mail to CBC News. "Government will deliver its position in a closing statement at the end of the hearing."

Hearings are scheduled to continue all week.