Port Hawkesbury Paper says it shouldn’t have to pay for Nova Scotia Power bailout

Port Hawkesbury Paper, Nova Scotia Power’s largest industrial customer, is challenging the notion that it should bear any responsibility for repaying a $500-million federal bailout of the utility. The paper mill recently filed an application with the Nova Scotia Utility and Review Board seeking clarity on its role in the repayment of the federally backed loan and associated costs.

In its submission to the regulatory board, Port Hawkesbury Paper argued that it would be unfair, unduly discriminatory, and seriously adverse to require the company to pay additional future costs related to the bailout. The paper mill maintained that it had already paid for all its fuel and power costs upfront, unlike other customers who had benefitted from Nova Scotia Power’s deferral of charges, leading to the accumulation of hundreds of millions of dollars in unrecovered fuel costs.

The federal bailout was necessitated by delays in the construction of the Muskrat Falls hydroelectric facility in Labrador, which connects to Nova Scotia’s grid through the Maritime Link. As Nova Scotia Power sought alternative fuels to compensate for the delayed energy from the dam, it incurred higher costs that were not immediately passed on to most customers.

However, Port Hawkesbury Paper, as an extra-large industrial customer with a unique service agreement, bore the full cost of power during this period. The company argued that it should not be held accountable for any part of the bailout since it had already covered its expenses while other customers had not.

The paper mill first raised this issue during previous board proceedings, but did not receive a clear answer. It sought assurance from Nova Scotia Power that the bailout would not impact its power rates, but the utility did not provide a straightforward confirmation. As a result, Port Hawkesbury Paper submitted a new application to the board, calling for an expedited process and a decision by early next year.

The company emphasized that incurring additional costs related to the bailout would be a violation of regulatory norms and unjustified given its upfront payment of fuel and power costs. The board is expected to consider Port Hawkesbury Paper’s arguments and make a decision before the March 31 deadline set for the development of a new tariff for the paper mill and the utility.