Business
New Gas pricing agreement reached by Nova Scotia Power
New Gas pricing agreement reached by Nova Scotia Power.
About this update from Emera Incorporated
[{"type":"text","content":"\n\n\n\n\nHALIFAX, Nov. 21 /CNW/ - Nova Scotia Power Inc. (NSPI) announced today\nthat it has reached an agreement with its supplier on pricing for natural gas\nunder an existing long-term natural gas purchase agreement.\nAs a result of the agreement, NSPI will lower its 2006 fuel forecast by\n$22 million. This will reduce the Company's 2006 rate application from an\naverage increase of approximately 15 per cent to approximately 13 per cent.\nNSPI has filed supplementary evidence with its regulator, the Nova Scotia\nUtility and Review Board (UARB).\n\"This agreement is good news for Nova Scotia Power customers,\" said Chris\nHuskilson, President and Chief Executive Officer of Nova Scotia Power. \"Given\nmarket conditions similar to today, the customer benefits from this agreement\nwill continue for several years.\"\nThe financial benefits of the agreement will vary based on world energy\nprices. Nova Scotia Power will propose to the UARB that should its 2006 fuel\ncosts be lower (as a result of this agreement) than the amount the regulator\nultimately provides for in the rate decision, the difference will be refunded\nor credited to customers.\nThe agreement provides NSPI with natural gas at a discount to current\nworld market prices. By having the option to resell the gas, NSPI and its\ncustomers can gain financial benefit.\nThe contract - which began in 2000 and runs until 2010 - calls for up to\napproximately 60 MMBtus of natural gas per day to be supplied to Nova Scotia\nPower. The contract was subject to a price re-determination on November 1,\n2004. With both Nova Scotia Power and its supplier unable to come to terms\nlast year, the matter was referred to binding arbitration. The two companies\nreached agreement in advance of any arbitration decision. The UARB has been\nprovided with details of the agreement which is confidential for competitive\nreasons.\n\"This agreement is more than a year in the making,\" added Mr. Huskilson.\n\"Customers are being asked to cover skyrocketing fuel costs - it's only fair\nthey receive the benefit of this fuel contract gain by Nova Scotia Power.\"\nThis agreement also results in a favourable adjustment to NSPI's fuel\nexpense for 2005. Consequently, as a result of this agreement and other\nfactors, including warmer weather in the fourth quarter, NSPI has revised its\nfinancial forecast e...