HALIFAX, March 10 /CNW/ - The Nova Scotia Utility and Review Board (UARB) has released its decision on Nova Scotia Power Inc.'s (NSPI) Rate Application for 2006. "A rate increase is never good news for our customers," said Chris Huskilson, Nova Scotia Power's President and Chief Executive Officer. "However, higher worldwide energy prices are driving higher costs on all products, from the price of gas at the pump to what we pay to heat our homes." The key elements of the UARB's decision include: - An average increase in rates for residential customers of 8.9% -- which means $7 per month to the typical household; - A $61 million increase in Nova Scotia Power's annual revenues; and - NSPI's return on equity maintained at between 9.3% and 9.8%. In its decision, the UARB incorporated the positive effect of the natural gas supply contract renegotiated by Nova Scotia Power in late 2005. This reduces the company's fuel budget by approximately $36 million to reflect expected gas sales benefits. "Now that we have a decision from our regulator, our job is to continue to listen to our customers, take action, and make the kind of changes our customers want to see - within the context of the dollars that are now available," added Mr. Huskilson. The UARB approved several million dollars in new investments for customers, including: - $4.0 million more for storm response, with the regulator recognizing improvements made by Nova Scotia Power since major storms in 2003 and 2004; and - $1.6 million in additional funding towards curbing excessive vegetation near power lines - the number one preventable cause of outages. The UARB also approved funding to finalize Nova Scotia Power's conservation and energy efficiency plan for customers, subject to review. The UARB noted numerous improvements Nova Scotia Power had made in fuel procurement since the 2005 rate decision - including the company's first multi-year contract for low-sulphur coal. However, the regulator determined that a previous finding related to 2002 and 2003 fuel procurement carried over into 2006. As a result, $15.7 million in fuel costs was disallowed for 2006. Significantly, the Board noted that 2006 would be the final disallowance related to this issue. "It's good to have closure on the past fuel procurement issues, and we are encouraged that the Board has recognized our efforts and progress. We look forward to continuing to work productively the UARB on this important issue," said Mr. Huskilson. "Overall, we feel the decision is a balanced one." The 2006 decision is available online at www.nspower.ca. NSPI is a wholly-owned subsidiary of Emera (TSX-EMA), a diversified regional energy company. NSPI provides more than 97% of electric generation, transmission, and distribution to 470,000 customers across Nova Scotia.