If the board finds it is not the same commercial arrangement, however, then a full public hearing would be required, which could derail Pacific West’s plans to begin producing supercalendered paper early next week. If the board finds a hearing is needed, Pacific West has asked that the rate be approved on an interim basis.
A letter filed with the board by NSPI on Wednesday says the utility has reviewed Pacific West’s application and supports approval of the load-retention rate it is proposing.
“It is (Nova Scotia) Power’s view that the proposed tariff will allow customers to obtain the benefit of fixed-cost contributions that would not otherwise be available if the mill does not operate,” it states.
Pacific West is due to take ownership of the mill Friday, with production of paper to begin early next week. The company hasn’t said whether it will proceed if the expedited approval isn’t granted.
Fibre began being delivered to the mill’s scalehouse Wednesday, with about 300 tonnes of wood received. About 1,000 tonnes are expected to arrive daily on Thursday and Friday.
The August decision by the board granting Pacific West a reduced load-retention power rate from Nova Scotia Power was conditional on the Canada Revenue Agency granting an advanced tax ruling, which has since been denied. Pacific West is now seeking to have that condition lifted.
The original plan was for Nova Scotia Power to take a 30 per cent ownership stake in the mill and be paid in dividends. Under the new arrangement, Pacific West would make 18 per cent of earnings before tax available to make annual upside payments to a maximum of $4 per megawatt hour beginning in the 2013 fiscal year. The arrangement would last for 7.5 years but could be reopened after five if the mill doesn’t contribute at least $20 million to NSPI fixed costs in that period.