Nova Scotia Power customers to foot $24M in storm recovery costs

Nova Scotia Power customers will see rates go up next year to pay for the utility's cost of dealing with storms in 2023.

In a newly released decision from the Nova Scotia Utility and Review Board, Nova Scotia Power got the green light to charge ratepayers $24 million starting in January 2025 through a mechanism called the storm cost-recovery rider.

According to the board, the impact on rates will vary depending on the customer, but on average, rates will rise about 1.4 per cent. The increase is set to last for one year.

There were six storms in 2023 that were severe enough to qualify for cost recovery, including post-tropical storm Lee, which temporarily knocked out power to nearly a third of Nova Scotia Power customers when it hit the province last September.

The other named storm included in the rider is post-tropical storm Philippe, which came just a few weeks after Lee. It was forecast to be a significant wind and rain event, but it weakened on its approach to Nova Scotia.

The utility predicted Philippe would cause tens of thousands of customer outages over a few days, but fewer than 5,000 households lost their connections. Still, Nova Scotia Power spent about $1.9 million in emergency preparations.

The board took a close look at the response to Philippe before concluding that the preparations were reasonable and it should qualify for cost recovery.

"Obviously, N.S. Power must act before the storm arrives," reads the decision from the board. 

Far exceeded base rate for storm recovery

The utility had a base rate of $10.2 million for storm operating costs in 2023, and was allowed to apply for cost recovery for anything spent above that. It far surpassed the base rate, spending an additional $21.8 million on restoration efforts, plus $2.2 million in financing costs.

A breakdown in spending submitted by Nova Scotia Power shows the bulk of the spending went to contracts with outside companies, followed by overtime labour, meals, travel and repair materials, among other expenses.

Not the only rate increase coming

Storm cost recovery is not the only thing that will be driving up power rates in Nova Scotia next year. 

Last week, the board approved an application from Nova Scotia Power to accept a $50-million loan guarantee from the federal government, which will save the utility from having to impose a nearly 20 per cent rate hike, but will likely lead to an average rate increase of 2.4 per cent.