Emera - Fuel practices changing at Nova Scotia Power

Fuel practices changing at Nova Scotia Power – June 20, 2005

June 20, 2005, Halifax, NS- Nova Scotia Power is changing the way it buys fuel. The energy utility today filed an update with the Nova Scotia Utility and Review Board (UARB) on its response to recommendations made by the regulator on Nova Scotia Power's fuel procurement practices.

"Less than three months ago, the regulator said Nova Scotia Power should do a better job on fuel procurement. We agree and are taking steps to do just that," said Ralph Tedesco, Chief Operating Officer of Nova Scotia Power. "The cost of fuel is a growing, worldwide challenge for customers and companies like Nova Scotia Power that use fuel to produce electricity and deliver service. Our customers are counting on us to do everything we can to manage fuel costs - our single biggest expense."

The UARB made several findings and directives concerning fuel procurement in its decision of March 31, 2005. In its update to the UARB, Nova Scotia Power outlined the following changes it has made to fuel procurement:

Consolidating responsibility for buying fuel with one staff person at Nova Scotia Power - a key recommendation of the UARB;
Changing the fuel buying strategy team at Nova Scotia Power to remove any potential conflict issues between the company and its parent Emera that were raised by the UARB;
Strengthening the company's in-house expertise on fuel by starting the search process to hire a senior fuel procurement manager experienced in international coal markets and procurement;
Revising Nova Scotia Power policies on fuel buying to ensure they're based on balancing commodity price swings with lowest available cost;
Signing longer-term contracts for cleaner low sulphur coal, with a multi-year deal already signed with an international supplier and negotiations underway with two other parties - complementing other long term deals already in place on other fuel sources, such as petroleum coke, local coal, transportation and natural gas.

"Nova Scotia Power is listening to what our regulator and many of our customers told us as a company," added Mr. Tedesco. "With high energy prices affecting every utility in North America, we have a responsibility to Nova Scotia Power customers to take action on how we buy fuel and make the necessary changes."

A final report on the actions taken by Nova Scotia Power to fulfill the UARB's recommendations will be filed with the regulator by September 30, 2005. Nova Scotia Power is also working with its independent consultant, Energy Venture Analysis Inc, to further supplement its fuel procurement operations.

Nova Scotia Power Inc. (NSPI) is a wholly-owned subsidiary of Emera (TSX-EMA), a diversified regional energy company. NSPI provides more than 97% of electric generation, transmission, and distribution to more than 460,000 customers across Nova Scotia.