If approved, the settlement will result in an average increase of approximately five percent for all customers, effective January 1, 2012. For the average residential customer, the increase would be approximately $6.00 per month. The settlement is a reduction in the average increase of 7.2 percent proposed in NS Power's May rate filing. General electricity rates in Nova Scotia last increased on January 1, 2009.
"We have worked with customer representatives to reach an agreement that balances the increased cost of making electricity in Nova Scotia with everyone's desire to keep rates as low as possible for customers," said Rob Bennett, President and CEO of Nova Scotia Power. "We want to acknowledge the dedicated efforts of stakeholders who worked tirelessly on behalf of our customers to help reach this positive outcome."
Nova Scotia Power and customer representatives have agreed to defer recovery of any fixed costs resulting from uncertainty in the pulp and paper industry. Those costs would be recovered in 2013 or as part of the next general rate application.
The settlement includes a change to Nova Scotia Power's regulated rate of return, or Return on Equity (ROE). The company's ROE will now be 9.2 per cent for rate-making purposes, with an allowed range of 9.1 to 9.5 per cent.
Parties to the settlement agreement include: the Consumer Advocate, the Avon Group, Halifax Regional Municipality, the Small Business Advocate, the Municipal Electric Utilities of Nova Scotia, and Nova Scotia Power.
The 2012 settlement proposal will be presented to the Nova Scotia Utility and Review Board (UARB) for consideration. The Board will determine next steps as part of its approval process.