Nova Scotia Power gets green light to raise power rates 2.4%

The Nova Scotia Utility and Review Board has given Nova Scotia Power the go-ahead to raise power rates an average of 2.4 per cent.

The money collected through higher rates will cover the first instalment of paying down a $500-million federally backed loan.

The electric utility applied for the rate increase last fall after securing a long-sought federal bailout. Nova Scotia Power has said it needed the money to balance unrecovered fuel costs that it had been shouldering as part of the fallout from delays to the Muskrat Falls hydroelectric project in Labrador.

Without the bailout, the utility said it would have raised rates an average of 19.2 per cent this year. Instead, it will apply more modest rate hikes over the course of the loan's 28-year payback period.

The rate increase varies depending on the type of customer, but the average for residential customers is 2.4 per cent. Unmetered customers see the smallest bump, at 1.6 per cent, while the large industrial tariff changes the most, by three per cent.

In a decision released Wednesday, the regulator said the rate increase was calculated to cover $42.4 million for Nova Scotia Power's debt payments.

Nova Scotia Power says the rate increase takes effect immediately and will be reflected in the next billing cycle.