N.S. Power rejects rate hike rollout

Nova Scotia Power is rejecting a deal proposed by its customers to phase in rate increases over three years.

At a hearing that began Monday in Halifax, the utility asked permission to hike power rates in January. If the Nova Scotia Utility and Review Board approves, the rate for residential customers would go up 6.5 per cent.

Several groups joined forces to try to avert a big rate increase in one year.

But Nova Scotia Power says it needs to hike rates now to cover the rising cost of fuel.

"Further deferral would erode one of the key objectives of the fuel adjustment mechanism stable, predictable and timely cost recovery," said Rick Janega, the utility's chief operating officer.

Commercial customers face a rate hike of 8.6 per cent, while large industrial customers, such as NewPage and Bowater, face an increase of 11.3 per cent.

The province's consumer advocate, industrial customers and other businesses proposed that only half of the rate hike take effect next year, with another increase to take effectin 2012, and the last 20 per cent in 2013.

"Double-digit increases are very troublesome at any time, but in these uncertain economic times they are of greater concern," said David MacDougall, a lawyer acting for NewPage and Bowater.

Connie Brauer, one of a dozen residential customers who wrote to the utility and review board to protest the proposed increases, said she has noticed consistent hikes on her bill.

"We have to take it away from somewhere else, which is usually the food budget," she told CBC News.

Nova Scotia Power's customers already face a 2.3 per cent rate hike in January to pay for programs that encourage energy conservation.

With the utility's proposed hike of 6.5 per cent, residential customers are looking at an overall increase of 8.8 per cent in the new year.

Liberal energy critic Andrew Younger said consumers should beware.

"We heard Nova Scotia Power today say that they have $1 billion in capital plans," he said."Who's going to pay for that? It'll be the ratepayers."

The hearing continues in Halifax this week.