Nova Scotia Power seeks another rate increase

HALIFAX — - HALIFAX — Nova Scotia Power has issued a statement saying price rates should go even higher than its original increase the utility recently announced.

The company, a subsidiary of Halifax-based Emera Inc., said the second request for a rate increase stems from a recent Supreme Court of Canada ruling that added $150 million to the utility's tax bill.

If approved, the latest rate increase would add another four per cent — or about $2 — to the average monthly residential bill.

In total, the average residential customer would see their bill jump Jan. 1 by about $10 a month if the Nova Scotia Utility and Review Board approves the request after public hearings this fall.

"We know rate increases are never popular," said Margaret Murphy, spokeswoman for Nova Scotia Power. "But we also want to emphasize that costs we've had direct control over, we've done a good job holding them flat or decreasing them."

The problem is that utility's taxes have tripled in three years, she said.

Meanwhile, the company's tax bill took another hit earlier this month when the country's highest court dismissed the utility's bid to claim about $150 million in income tax deductions filed between 1998 and 2002.

"We fought hard in support of our position, and considering the potential benefit to customers, it was worth the effort," chief operating officer Ralph Tedesco said in a statement. "But we didn't win."

The deductions relate to the interest on assets constructed by the company's publicly owned predecessor, Nova Scotia Power Corp.

The company had tried to claim deductions on the ongoing interest for assets such as power plants and equipment that had been constructed in the 1970s and 1980s.

Nova Scotia Power had argued it became eligible for the deductions when it became a private company in 1992. The Canada Revenue Agency disagreed.

Murphy said it will take the company seven years to pay off the latest tax bill.

With 570,000 customers and $4 billion in assets, the utility supplies 95 per cent of the electricity consumed in Nova Scotia.