Nova Scotia regulators approved a 14% electricity rate hike on Thursday, defying Prime Minister Tim Houston’s calls to reject the hike.
Interest rates will rise by an average of 6.9% each year in 2023 and 2024.
The Nova Scotia Utility and Review Board has reviewed most of the elements of the settlement agreement reached between Nova Scotia Power and a group of customers after the government of Houston enacted caps on utility fees, spending and profits in November. issued a 203-page decision approving.
The board said the approval was in the public interest and that the price increase was “reasonable and appropriate.”
“The Board cannot simply deny NS Power’s reasonable costs to make tariffs more affordable. These principles ensure fair tariffs and financial soundness of public utilities. So that we can continue to invest in the systems that serve our customers, the Board can (and) sanction any unauthorized costs that prove to be unreasonable or unreasonable, and in the absence of such discovery, NS The cost of power must be reflected in the tariff,” wrote the three-member committee.
In addition to the 14% increase, the Board maintained Nova Scotia Power’s current return on equity of 9%, with a margin of 8.75% to 9.25%. Agreed in principle to establish a decarbonization deferral account to pay for decommissioning and related decommissioning costs of coal-fired power plants, and introduced a storm cost recovery covenant for a three-year pilot period.
The Board rejected several items of the agreement, including passing on consumer charges for some Maritime Link transmission capital projects.
Nova Scotia Power welcomed the ruling in a statement, calling it “the culmination of an extensive and transparent regulatory process over the past year.”
pressure from the prefecture
Houston claimed the settlement violated his government’s law known as Bill 212. We have capped the charges by 1.8% to cover non-fuel costs. We did not cap our rates to cover fuel costs or energy efficiency programs.
Bill 212 was passed after the Commission completed weeks of hearings on Nova Scotia Power’s request for an electricity rate increase. This is his first general charge application in a decade. Nova Scotia Power is a subsidiary of his Emera, a publicly traded company based in Halifax.
The law has caused credit downgrades from two credit rating agencies, alleging it undermined the independence of the Nova Scotia Public Utility Review Board.
In its decision, the Council acknowledged that the law is intended to protect toll payers but does not prevent toll increases.
“Given that fuel and purchased power costs were excluded when we expected significant upward pressure on tariffs, a significant increase in tariffs was not ruled out either. The protection provided appears to be focused on NS Power’s electricity non-fuel costs, with some modifications targeting NS Power’s capital costs and earnings.”
The Commission noted that the only participants in the fee lawsuits that challenged the settlement were the states.