AbitibiBowater, NewPage, may appeal to regulator if Nova Scotia Power goes ahead with 13.5% electricity rate increase; Bowater Mersey Paper in Brooklyn could be forced to close, spokesman says

LOS ANGELES , May 17, 2011 () – AbitibiBowater and NewPage Corp. have told Nova Scotia Power (NSP) they may appeal to the provincial regulator if the utility goes ahead with a 13.5% electricity rate increase.

Bowater Mersey Paper Co. Ltd. in Brooklyn and NewPage Port Hawkesbury in Point Tupper are NSP's largest customers, The Chronicle-Herald reported on May 14. The 13.5% increase equates to a real-term increase of about 16.6% once fuel adjustments and Efficiency Nova Scotia charges are added.

NSP filed an application with the Nova Scotia Utility and Review Board on Friday to increase rates by an average of 7.3% from Jan. 1 next year, equating to 9.1% with the additional charges, to cover C$94 million in extra costs. Hearings on the application are due to begin on Sept. 19. If the hike is approved, NSP has said it expects to seek another 4% in 2013 and 2% in 2014.

But lawyers representing AbitibiBowater and NewPage have told NSP they may appeal to the provincial regulator for a load-retention rate. That would provide protection from the increases on the grounds that other power customers would face larger increases if the two big plants, which represent up to 20% of NSP’s load, were forced to shut down.

AbitibiBowater spokesman Pierre Choquette said any increase in rates at Brooklyn would have a significant impact on the mill's viability. He said Bowater Mersey Paper representatives had met with the utility and other stakeholders to discuss their concerns and look at ways to mitigate these increases. "Our main goal here, to have the mill survive, is to reduce costs," he said.

Courtney Wentzell, president of Local 141 of the Communications, Energy and Paperworkers Union of Canada, said he did not think the increase threatened the Brooklyn operation, adding that the threat of closure was the company's "weapon of choice," and something they "cry all the time."

According to Wentzell, unionized workers agreed to an 18% wage and benefit reduction last December, yet the company still wants more concessions.

NSP president Rob Bennett said the utility had worked hard to keep costs down and minimize rate increases, noting that power costs to pulp mills had escalated below the rate of inflation since 1992.

The primary source of this article is The Chronicle-Herald, Halifax, Nova Scotia, on May 14, 2011.

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