Nova Scotia Power files plan to lower financing costs and help reduce future rate increases

HALIFAX, Nova Scotia--(BUSINESS WIRE)--Nova Scotia Power has filed an application with the Nova Scotia Energy Board for a new way to finance costs tied to the province’s changing electricity system. If approved, the plan would reduce pressure on customer rates by lowering borrowing costs and spreading repayment over a 30-year period.

Originally proposed and supported as part of Nova Scotia Power’s most recent General Rate Application, the proposed plan would allow up to $1 billion in eligible costs to be financed using a lower-cost method called securitization. Securitization is a proven financial tool that has been used in other jurisdictions to lower costs for customers by enabling lower interest rates and longer repayment terms.

The filing follows a framework developed by the Province of Nova Scotia to help manage costs associated with the energy transition for the benefit of customers. Eligible costs include the remaining value of certain coal-related assets due to be retired as part of the energy transition, fuel used to generate electricity, costs to establish the Nova Scotia Independent Energy System Operator, and other deferred expenses.

These existing expenses are already part of what it costs to operate and transition the electricity system. The proposed securitization approach changes how those costs are financed, allowing for lower-cost borrowing to be accessed and used to help reduce the impact on customers as the system changes. Without this plan, these costs would be funded at higher interest rates. As a result, the proposed framework is expected to save customers approximately $265 million over the full 30-year repayment period.

If the application is approved, the lower-cost debt would be repaid through a separate line item on power bills, called a rider, beginning in 2027. For residential customers, the rider would add 2.9% in 2027. Combined with the previously approved 3.9% rate increase for residential customers for 2027, the total increase would be 6.8% for residential customers. Across all customer groups, the new rider would average 3.3%.

The Nova Scotia Energy Board will review the application and determine whether the proposed financing plan is in the best interest of customers.

Forward Looking Information

This news release contains forward-looking information and forward looking statements within the meaning of applicable securities laws (collectively, “forward-looking information”) with respect to Nova Scotia Power, including without limitation, statements about its expectations regarding: lower financing costs and reduced future rate increases through securitization; cost savings to customers of approximately $265 million over a 30-year repayment period; and new rider amounts for each customer group and the average rider for all customer groups. Forward-looking information is typically identified by words such as “anticipate,” “expect,” “intend,” “plan,” “target,” “believe,” “forecast,” “estimate,” “will,” “may,” “should,” and similar expressions suggesting future outcomes. Undue reliance should not be placed on this forward-looking information, which applies only as of the date hereof. By its nature, forward-looking information requires Nova Scotia Power to make assumptions and is subject to inherent risks and uncertainties. These statements reflect Nova Scotia Power management’s current beliefs and are based on information currently available to Nova Scotia Power management. There is a risk that predictions, forecasts, conclusions and projections that constitute forward- looking information will not prove to be accurate, that Nova Scotia Power’s assumptions may not be correct and that actual results may differ materially from those expressed or implied by such forward-looking information. The forward-looking information in this news release is made only as of the date hereof, and except as required by law, Nova Scotia Power disclaims any intention or obligation to update or revise any forward-looking information as a result of new information, future events or otherwise. Additional detailed information about these assumptions, risks and uncertainties is included in Nova Scotia Power’s securities regulatory filings, including under the heading “Enterprise Risk and Risk Management” in Nova Scotia Power’s annual Management’s Discussion and Analysis, and under the heading “Principal Financial Risks and Uncertainties” in the notes to Nova Scotia Power’s annual and interim financial statements, which can be found on SEDAR+ at www.sedarplus.ca.

About Nova Scotia Power

Nova Scotia Power has had a presence in communities across Nova Scotia for over a century. As the primary electricity provider in the province, the company is regulated by the Nova Scotia Energy Board and provides generation, transmission and distribution of electrical power to approximately 550,000 customers. This includes residential, commercial, and industrial customers across Nova Scotia. With 2,200 dedicated employees, the team at Nova Scotia Power works every day to provide safe, reliable service to customers in every corner of the province. Their focus is on engaging with communities about the important work being done to meet the evolving energy needs of Nova Scotians while supporting the exciting growth and development in the region. Nova Scotia Power Inc. is a wholly owned subsidiary of Emera Inc. (TSX/NYSE-EMA). Learn more at www.nspower.ca.