UARB approves continuation of Port Hawkesbury Paper’s power rate

The Nova Scotia Utility and Review Board has issued a decision letter approving the continuance of the special power rate paid by Port Hawkesbury Paper.

When the mill reopened in 2012 after a yearlong sales process, new owners Pacific West Commercial Corp. 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 make a contribution to Nova Scotia Power’s fixed costs.

The rate was to be in effect for 7.5 years, but there was a provision that if the mill had not made a $ 20- million contribution to NSP’S fixed costs in the first five years of the arrangement, some cost components of the rate could be reopened.

The Point Tupper papermaker did not meet that threshold, triggering the reopening of the matter. The board held a “paper hearing process” to look at the application.

The mill also asked that a $4 per megawatt-hour cap on annual contributions to fixed costs continue. The tariff is based on the assumption that it’s better for other ratepayers that the mill continues to operate rather than if it is shut down.

A report filed with the UARB stated the load-retention tariff is the most complicated rate offered by NSP. Its electricity bill is based on a formula involving the hourly incremental cost, variable capital cost and a contribution to fixed costs.

The utility provides the mill with hourly, day- ahead and week- ahead projections, and Port Hawkesbury Paper indicates what its load requirements will be for those periods based on the price forecasts.

The mill makes supercalendered paper for the catalogue and magazine market.