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Nova Scotia Power Files for New Rates for 2005

Thursday, May 28, 2004 (Halifax, NS): A sharply higher tax bill is the primary reason Nova Scotia Power (NSPI) is requesting an increase in power rates. The power company today made an application to the Nova Scotia Utility and Review Board for new rates for 2005. Nova Scotia Power is a wholly-owned subsidiary of Emera Inc. (EMA-TSX).
The company's total tax costs are forecast to be $113 million in 2005, triple what they were in 2002, the last time NSPI applied for a general rate increase. The sharp tax increase is the main driver behind the rate application.
"We have been subject to higher taxes for the last couple of years, but we have been able to shelter customers from the impact by reselling natural gas into the U.S. market and using the gains to offset higher tax costs. Our ability to offset these higher taxes with natural gas sales will be reduced next year, yet we must continue to pay a hefty tax bill," said Ralph Tedesco, Nova Scotia Power's Chief Operating Officer.

Nova Scotia Power pays numerous types of taxes to federal, provincial and municipal governments. In the last few years, income taxes are up by $64 million, to $70 million, and property taxes have doubled to $32 million.
The proposed rate increase would see residential power bills in the province go up by approximately 10%. By way of comparison, in the last six months gasoline prices have increased 40%, propane has risen 35%, and home heating oil is up 15%. The typical NSPI residential customer will see an increase of about $8 on their monthly bill.

Customers can mitigate changes in their electricity bill by reducing energy usage. NSPI has an on-line energy calculator and energy saving tips available at www.nspower.ca.

"NSPI is focused on being a low-cost, reliable energy provider," said Mr. Tedesco. "We have had considerable success in managing the costs within our control."

NSPI's operating expenses, excluding pension costs (which are affected by financial market performance), have remained flat since 2002, despite adding customers and generating more electricity. Operating costs are not a factor in this rate application.

A series of stakeholder technical conferences will be held throughout the summer in connection with this rate application, with a public hearing expected this fall. Pending UARB approval, new rates would be effective January 1, 2005. NSPI's web site, www.nspower.ca, has the full regulatory filing and will carry updates.

About Emera Inc.

Emera Inc. (EMA-TSX) is an energy and services company with 570,000 customers and $4.0 billion in assets. The core business of Emera is electricity and the company has two wholly-owned regulated electric utility subsidiaries, Nova Scotia Power Inc. and Bangor Hydro-Electric Company. Nova Scotia Power supplies over 95% of the electric generation, transmission and distribution in Nova Scotia. Bangor Hydro provides electricity transmission and distribution service to 110,000 customers in eastern Maine. It is a member of the New England Power Pool, and is interconnected with the other New England utilities to the south and with New Brunswick Power to the north. In addition Emera owns a 12.5% interest in the Maritimes & Northeast Pipeline, which delivers Sable natural gas to markets in Maritime Canada and the northeastern United States; Emera Energy Services which manages energy assets on behalf of third parties and provides related services; and Emera Fuels, which distributes home heating oil and related products to customers in the Maritime provinces.