NS Power rates could rise by 14 per cent by 2024: settlement agreement

NS Power wants 14 per cent rate hike over 2 years N.S. Power has proposed a rate hike of 14 per cent over the next two years, which would meet the recently imposed maximum by the province.

A new proposal from Nova Scotia Power would see electricity rates rise nearly 14 per cent by 2024, despite efforts to limit increases by the province.

The rate increase across all customer classes, according to the proposed settlement agreement, would average 6.9 per cent in both 2023 and 2024, with further terms added in 2024 and 2025 to “recover historical under-recovered fuel costs.” The proposed agreement addresses both fuel and non-fuel rates, in line with the provincially legislated cap of 1.8 per cent total increase allowed for 2023 and 2024.

"It's likely that future increases, purely related to the costs of fuel that Nova Scotia Power needs to burn, in order to produce our electricity, those increases are not fully addressed by this settlement," said consumer advocate Bill Mahody.

The agreement also includes a Storm Rider for the years 2023-25, “to provide clarity around the recovery of costs for major storms and extreme weather events in future,” as well as a Demand Side Management Rider to “support initiatives to increase efficiency in Nova Scotia and help reduce energy costs for customers.”

The proposed Storm Rider would allow NS Power to apply to the NSUARB to recover costs for severe weather events from customers, with the utility allowed to apply for recovery aid if amounts exceed $10.2 million in 2023, and $10.4 million in 2024 and 2025 respectively. The Storm Rider is slated to end after the recovery of any 2025 storm costs.

"Nova Scotia has traditionally used fossil fuels to generate a large portion of our electricity able that's a declining portion in the last number of years but that cost of getting to no coal is a substantial cost," Mahody said.

In the general rate application (GRA), NS Power proposed a customer charge of $22 per month by the end of 2024 “to help ensure proper alignment of its fixed and variable costs.” According to the utility, the increase “would bring Nova Scotia more in line with other Canadian jurisdictions.”

The settlement agreement would see a smaller charge of $19.17 per month for residential customers and $21.28 per month for small business customers.

The settlement allows NS Power to apply to the Nova Scotia Utility and Review Board (NSUARB) to defer costs during “the Test Years 2023 and 2024,” with any costs proposed to be deferred subject to review and decision by the Board.

The process of defining the scope of a Decarbonization Deferral Account is also in the works, with a report and recommendation slated to be submitted to the NSUARB for approval by June 30, 2023.

The agreement also confirms NS Power’s withdrawal of a request for a revised Earnings Sharing Mechanism for the utility, as well as a deferral for the GRA. According to the agreement, NS Power is required to file a Cost of Service Study and a Line Loss Study before the utility is eligible to file its next GRA, or by Dec. 31, 2025.

REACHING THE AGREEMENT

The litigation dates back to NS Power’s 2022-2024 GRA filed with the NSUARB on Jan. 27. The settlement comes after the NSUARB approved an extension for NS Power to file its closing submission as part of its 2022-24 GRA.

The utility noted the GRA was subject to a full regulatory process, which included 700 information requests with over 1,900 questions to NS Power and a nine-day oral hearing resulting in 71 undertakings.

The originally proposed rate was thwarted by new legislation from the provincial government introduced earlier this fall.

On Oct. 19, the Progressive Conservatives introduced Bill 212, an act to amend the Public Utilities Act, legislation that would cap rate increases by NS Power, excluding fuel costs. The bill became law on Nov. 9.

According to a letter issued by the utility Thursday, NS Power has already reached a settlement agreement with interveners Eastlink, Rogers, and Xplornet on the pole attachment rate.

The proposed settlement agreement has been reached between Nova Scotia Power and key stakeholders representing customers. It now heads to the Nova Scotia Utility (NSUARB) and review board for approval.

NS Power notified the NSUARB on Thursday that a comprehensive settlement agreement of the GRA was reached with the Consumer Advocate, Small Business Advocate, Industrial Group, Dalhousie University, Ecology Action Centre, the Affordable Energy Coalition, and the Municipal Electric Utilities (MEUs).

The utility provided copies of the agreement with Port Hawkesbury Paper LP, which indicated “that it was not in a position to note its support for a settlement agreement to which it was not a party.” Meanwhile, Freeman Lumber told NS Power they refused to take a position on the agreement.

According to NS Power, EfficiencyOne advised that “given the discrete nature of its intervention in the GRA, it does not feel it is appropriate to sign on to the broad-based Settlement Agreement, but that it does not have an intention to file any position contrary to the terms of the Settlement Agreement.”

As part of the agreement, MEUs will now have the opportunity to provide a “narrowly scoped closing statement on matters regarding the Open Access Transmission Tariff capacity-based ancillary services… and the Wholesale Market Backup/Top-up Service Tariff GHG credit.” After providing responses, NS Power says the NSUARB will make an ultimate determination on the matters.

NS Power has also requested that the NSUARB create a schedule to expedite the process “so that rates may be put in place by January 1, 2023.”

As inflation drives up the cost of living, it’s putting a strain on households facing sky-high energy bills.

“There are approximately 113,000 households in Nova Scotia that are in energy poverty,” Ecology Action Centre Energy Coordinator Jacob Thompson says.

Energy poverty is defined as households paying more than six per cent of their net income on energy bills.

Thompson says the government needs to do more to help those in energy poverty equip their homes with alternative heating systems like heat pumps to save them money, but also transition to a greener energy solution.

“That's actually the cheapest cost option to help green the grid and Nova Scotia and it helps the people who are in energy poverty,” Thompson said.