N.S. proposes taking on $117M in costs from Nova Scotia Power to limit 2024 power bill increases
Province says deal would stave off additional 7% increase, limit to 1.1%
The Nova Scotia government says it hopes to stave off steep electricity rate hikes by handing Nova Scotia Power (NSP) $117 million for fuel costs the utility was set to recover from customers this year.
Minister of Natural Resources and Renewables Tory Rushton said Monday that customers will still have to pay the entire amount, but it will be spread out over a 10-year period, limiting bill increases to just 1.1 per cent in 2024, instead of seven per cent if the government had not acted.
"Now is not the time for another significant increase of power rates," he said. "We needed to find a way to protect ratepayers."
The proposal is pending approval from the Nova Scotia Utility and Review Board.
In its application to the board Monday, NSP said it must recover at least $117 million of roughly $395 million in unrecovered fuel costs in 2024 or risk having its credit rating further downgraded.
Plan needs approval from regulator
The utility told regulators its plan has the general support of stakeholders, including consumer and small business advocates.
But even if it's approved, that doesn't mean customers are necessarily safe from seeing their power bills increase further in the coming years.
Roughly two-thirds of NSP's fuel costs are still unrecovered, something that will need to be addressed in the near future, according to the utility.
The costs are the amount NSP paid for fossil fuels it burned to generate electricity. Those costs jumped because of international events like the war in Ukraine, and more fuel was needed because NSP did not receive the expected amounts of renewable energy from the troubled Muskrat Falls hydroelectric project in Labrador.
Rushton said he hopes the federal government will offer Nova Scotia a similar bailout plan to the one Newfoundland and Labrador was given over the Muskrat Falls hydro project to help stave off further increases.
Global issues at play, says NSP
"We're looking at the federal government and having positive conversations of what the remaining part of this mechanism could look like for 2025," he said.
In a statement, Natural Resources Canada said it is following the deal between the province and NSP closely.
It did not answer a question from CBC News on whether it would provide a bailout.
NSP president and CEO Peter Gregg said in a statement that changes in global markets have hit the company hard. NSP is owned by Halifax-based Emera, a publicly traded company.
"We have seen unprecedented volatility in fuel costs in recent years due to global events. For example, in 2022 the actual cost of natural gas was 47 per cent higher than forecasted due to impacts from the war in Ukraine and the resulting disruption to natural gas markets. NS Power uses purchased fuel as part of our overall supply to deliver electricity to our customers."
Political opposition say the measure, while offering rate payers some reprieve, needs to go farther to make a difference for Nova Scotians.
"We are glad to see some effort to prevent further shocks to people's household budgets ... but it's a temporary measure," said Claudia Chender, leader of the provincial NDP.
Nova Scotia Liberal Leader Zach Churchill echoed the sentiment and added that to really make a difference for Nova Scotians, the province needs to stop using "Band-Aids" and move away from coal power.
"We have prices soaring and in Nova Scotia when it comes to power because we are still reliant on coal and imported fossil fuels," he said. "This government is still burning the same amount of coal that they were two years ago when they got into office."
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With files from Paul Withers and Jean Laroche