SYDNEY, N.S. — The provincial regulator has approved on an interim basis a proposed new power rate for Port Hawkesbury Paper and set dates for a hearing where a final determination on the tariff will be made.
Port Hawkesbury Paper and Nova Scotia Power Inc. have filed an application with the Nova Scotia Utility and Review Board for a new electricity rate for the mill, the utility’s largest single customer.
The board has held a preliminary hearing, where dates for filings in the matter were set. Notices of intervention are to be received by Oct. 22; information requests to NSPI and PHP are due Oct. 29, with responses from the parties due by Nov. 19; intervener submissions are due Dec. 3.
Opening statements are scheduled for Feb. 5, while the hearing begins Feb. 10.
Because the current load retention rate paid by the papermaker is due to expire at the end of the year, the mill and utility asked the board to grant the new rate on an interim basis beginning Jan. 1. The board has granted that, pending a final decision being made.
Under the proposed rate, NSPI would have more authority to scale back or ramp up the mill's power usage, with PHP turning over the keys to the utility from an electricity supply perspective depending upon the system load. In essence, it would treat the mill as a part of its system — NSPI tells its own plants what load to run, and now that would also be extended to PHP.
The proposed extra-large industrial active demand control tariff is described as a below-the-line rate that has been designed to create further value for the utility’s other customers as compared to the current rate.
The province’s consumer advocate has requested intervener status in the hearing, to be represented by William L. Mahody, noting the application will have an impact on residential ratepayers and the consumer advocate intends to represent the interests of those ratepayers.
Peter MacDonald, resource manager with PHP, said recently that the new arrangement is projected to triple the contribution that the mill makes annually to NSPI’s fixed costs.
PHP uses approximately 10 per cent of NSPI’s system load, annually.
In recent years, the mill has improved its facilities to allow it to better manage its electricity use on short notice and for longer periods of time.
When the mill reopened in 2012 after a yearlong sales process, it received a special load retention tariff for the electricity that it uses. Under the tariff, the mill is to pay for the costs of generating electricity for it to operate and also contribute to Nova Scotia Power’s fixed costs.
In its submission to the board, NSPI wrote that the new tariff has been designed to produce additional value for its other customers. Under the current tariff, the contribution to NSPI’s fixed costs paid by PHP is $2-$4 per megawatt hour. Under the new proposal, it would increase to a minimum of $4.
The mill currently employs approximately 330 direct employees and supports about 500 indirect jobs. It produces glossy paper for the catalogue and flyer market.
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