Nova Scotia

Nova Scotia Power executives, interveners meet

Executives at Nova Scotia Power Inc. met privately with the groups that are intervening in the utility's proposal for a rate hike.

A lawyer for NewPage Port Hawkesbury was present at Thursday's meeting

Executives at Nova Scotia Power Inc. met privately with the groups that are intervening in the utility's proposal for a rate hike.

Thursday's closed-door session took place in Halifax ahead of public hearings into the rate application.

Meetings like the one on Thursday are common before consultations.

However, this one comes on the heels of NewPage Port Hawkesbury's announcement that it's shutting its pulp and paper mill down indefinitely.

The mill is NSP's largest customer with an annual power bill of about $100 million.

One of the reasons cited for the pending shut down of the mill is the province's high power rates and a proposed increase of 16 per cent.

Rene Gallant, senior vice-presdient with Nova Scotia Power, said part of the reason NSP called a stakeholder's meeting Thursday was to discuss the prospect of how to adjust power rates if the mill doesn't reopen.

"We understand that situation is very serious and very urgent, so we are are looking at all the scenarios of what could happen in 2012. In the room today, our stakeholders were talking about that issue and trying to get an understanding of what that means and not just for rates for next year, but for the next several years," said Gallant.

Gallant said NSP views NewPage's decision to close as a temporary shutdown, but the utility must also prepare for a scenario in which the mill stays closed for good.

In that case, the power company would go to the Utility and Review Board to ask for an adjustment to power rates similar to situations in which fuel costs go up.

All other customers would pay more for electricty, but would have the option of receiving a rebate if rates went up by too much.

A lawyer for NewPage was at the meeting, along with representatives from the Halifax Regional Municipality, Efficiency Nova Scotia, business groups and the consumer advocate.

Nova Scotia's Consumer Advocate Bill Mahody said giving industrial users a break would have consequences for residential customers.

"Initial indication is that the shift of revenue requirement would be approximately $30 million that would be moved to other classes, it would make an increase in your rates somewhere in the range of two to three per cent in residential rates," said Mahody.

"Again, any increase in rates is of substantial concern to all rate classes."

Nova Scotia Power has also requested a higher rate of return for its investors. Earlier this week, Premier Darrell Dexter said he believes this is the wrong time to seek higher returns for shareholders.