Upcoming power increase has businesses worried

Although sentiments ranged from frustration, worry and resignation, everybody contacted by The Weekly News last week agreed that Nova Scotia Power's upcoming 9.4 per cent electricity rate hike will have a serious negative impact.

Earlier this month, the Nova Scotia Utility and Review Board approved a settlement agreement reached in September by representatives of all Nova Scotia Power groups. Effective Jan. 1, 2009, residential and commercial customers will pay 9.4 per cent more for electricity.

"We have to really keep this place heated and use a lot of power," said Ellen Hallett who works at Lakeland Plant World on Main Street. "You can't keep putting prices up, or the customers won't buy things, so we will take a direct hit on the bottom line."

Lakeland has been in business for more than 30 years and provides six local jobs.

"There have been so many cost increases," said Hallett. "It is not good news."

This latest electricity rate increase is the fifth in seven years. The most recent hike was on April 1, 2007.

"We appreciate that any increase in the price of electricity will be challenging for many customers," Nova Scotia Power president Rob Bennett said on Nov. 5. "As our regulator points out in today's decision, the world price of coal, which is the main fuel we use to make electricity, remains high and is twice as much as it was when rates were last set."

Kim Stacey owns her own small business, Emma's Eatery, in Eastern Passage.

She said she is disappointed that the increase is coming so soon after the last one and is frightened at the effect it may have on her ability to grow her business.

"I'm not sure yet exactly how I will alleviate the crunch of the increase, but as usual in this early stage of my business, I am always in survival mode and this is just another huge challenge to stay in business," said Stacey. "So I will follow the typical basics to start, which is to decrease wage expenses, food costs and overhead costs."

Stacey said her power rates have almost doubled since she opened in August 2007.

"This is due to a combination of the increases and some growth in operational volume of about 25 per cent, but really the increases will be quite a challenge because propane is also increasing at a similar rate and is a comparable operational cost for us that has hit us very, very hard," she said.

"Each time overhead costs increase it slows the potential growth rate of the business."

It is extremely difficult to run any business, said Stacey, and especially a new and small-to -medium-size business like hers.

"Budgeting is extremely important and the margins are non-existent, or minimal, and very slow going," she said.

Deacon Len Moore is on the finance committee at St. Vincent de Paul Parish in Cole Harbour. The church is entirely dependent upon donations, and like everyone else, he is very unhappy with the rate increase.

"Last year, we spent $28,000 on electricity costs and so this upcoming year with the increase we expect to pay well over $30,000," said Moore. "We can't turn the heat down, so we will just have to live with it."

joanneoostveen@accesswave.ca