Nova Scotia’s Utility and Review Board has officially approved the $500-million bailout that the federal government offered to Nova Scotia Power two months ago. This decision, released on Friday, comes as a relief to both the utility company and its customers.

The board stated that Ottawa’s loan guarantee would “benefit customers by mitigating the potentially significant rate pressures in the near term that would otherwise occur absent this commercial arrangement.” This means that without the bailout, customers could have faced a substantial increase in their electricity bills.

The board further added that approving this application is in the public interest, highlighting the importance of ensuring stable and affordable electricity rates for Nova Scotians.

This decision is directly related to another application by Nova Scotia Power, which aims to determine the impact of the loan guarantee on rates. In their filing, the utility company revealed that without the federal bailout, customers would have seen an average rate increase of 19.2 per cent. However, with the bailout, the projected increase for next year is only 2.4 per cent.

To cover the $42.4 million that the utility will pay as the first instalment of a 28-year payback period for the loan, customers will have to bear a slight increase in their electricity bills. Nevertheless, this is seen as a necessary step to ensure the financial stability of Nova Scotia Power.

The UARB is expected to make a decision on Nova Scotia Power’s application early next year, providing further clarity on how the loan guarantee will impact rates in the long run.

Nova Scotia Power has been facing challenges due to a growing fuel bill, partly attributed to delays in receiving power from the Muskrat Falls hydroelectric plant in Labrador. The bailout from the federal government will help alleviate some of the financial strain on the utility company and its customers.