Nova Scotia Power seeking 10% rate increase over 3 years

Nova Scotia Power wants to increase electricity rates for residential customers by at least 10 per cent over the next three years.

The company applied to the Nova Scotia Utility and Review Board Thursday for a 3.3 per cent residential rate increase in 2022, 2023 and 2024.

If approved by regulators, the company said the typical homeowner would see their power bills go up by $5 per month, but that is a base-rate increase. Most businesses are facing increases of around four per cent.

The application also seeks permission to raise bills in future years through new charges.

A storm rider would allow Nova Scotia Power to increase bills by up to twoper cent. The rider would need board approval and be applied in the year following extreme storms that trigger damage repairs that exceed a five-year average, excluding the cost of Hurricane Dorian in 2019. This charge could not be used before2024.

NSP wants permission to charge ratepayers for energy saving programs that exceed the current cost of $40 million per year. The provision would go into effect in 2023.

System access charge

The company also wants to create a monthly "system access charge" for customers who generate their own electricity.

There are4,100 net metering customers almost all are residential customers with solar power.

Those customers generate their own power from the sun and can also contribute any excess electricity they produce back to the grid. They can receive credits to offset their own costs when they draw power from the grid when they aren't able to generate their own solar power, such as after the sun sets.

NSP saidthey are benefiting from the overall system, but not contributing to its cost, which amounts to a subsidy.

The company is proposing a rate of $8 per kilowattper month.

Net metering customers who enrolledbefore February2022 will be exempt from thecharge for 25 yearsafter they sign up.

In 2023, the company wants to charge ratepayers $53 million in deferred fuel costs. That's money it spent in prior yearsbuying fuel to burn for electricitygeneration,but did not recover from customers.

Writing off coal plants

The utility said it supports the government's environmental goals, but theywill result in closing coal plants before the end of their useful life.

"We support that but it does represent a significant change in our operating landscape," Nova Scotia Power president Peter Gregg told reporters Thursday.

The company estimates the cost of writing off or depreciating the coal plants at $370 million.

It proposes to create what it calls a "decarbonization deferral account." It will go back to regulators at some point to recover those costs from ratepayers in a separate application.

Annual rate of return

The company wants to maintain its nine per cent rate of return.

NSP expects to earn $153 million this year, $192 millionin 2023, and $213 million in 2024 from its rate of return.

"We're not asking for more than we need to run a reliable business," Gregg said.

"We don't take raising rates lightly. We understand the impact it can have on our customers."

This is the first general rate application since 2012. But power bills have been rising on average about oneper cent a year since 2015 under a long-term "rate stability plan" that covered renewable energy contracts and the fuel purchased to generate electricity, like coal, heavy fuel oil and natural gas.