Emera - NSPI Receives UARB Ruling on 2002 Rate Application

NSPI Receives UARB Ruling on 2002 Rate Application

Halifax, Nova Scotia, October 23, 2002. Today, Nova Scotia Power received a ruling from the Nova Scotia Utility and Review Board (UARB) regarding the power company's 2002 rate application. The application sought an average rate increase of 8.9 percent across all customer classes. Nova Scotia Power filed the application in response to significantly higher prices for import coal in 2002. Nova Scotia Power Inc. is a wholly-owned subsidiary of Emera (TSX-EMA)

Some key features of the decision include the UARB allowing:

a Return on Equity of 9.9%-10.4%
rates to be set based on the existing Common Equity Component of 35%, with the ability to raise the Common Equity Component to 40%
an average increase in rates across all customer classes of 3.3%.
The Board disallowed the amortization of the $13 million contract termination fee paid to the Cape Breton Development Corporation in 2001.

"We're pleased to have a decision from the Board which will provide clarity for our company and for customers. On one hand, we have been granted a rate increase and opportunity to strengthen our balance sheet. On the other hand, while the Board supports our business development initiatives, they are asking for more information around the allocation of functions as they relate to Nova Scotia Power," said Chief Operating Officer Chris Huskilson. "It has been six years since our last rate application and this is a lengthy decision from the Board. We have begun preparing the compliance filing for the Board's approval and it will take a few weeks to assess the implications on the 2003 rate application."

NSPI provides 95% of electric generation, transmission and distribution to 440,000 customers across Nova Scotia.