POLITICS

Nova Scotia Power customers should pay for biomass plant if necessary: premier

07/19/2012 01:40 EDT | Updated 09/18/2012 05:12 EDT
HALIFAX - Nova Scotia Power customers should pay the costs of operating a biomass plant for the next two years if a deal to sell a shuttered Cape Breton paper mill goes through, Premier Darrell Dexter said Thursday.

But Dexter said any concerns that running the mill, which closed last fall, won't offset the cost of running the biomass facility are "false" and "hypothetical."

Dexter said the economic ramifications of the mill not reopening would exceed what Nova Scotia Power customers would pay to operate the $208-million biomass plant.

"We want the mill to operate and we want it to operate because it's an important part of the economic architecture of the province," he said.

"The loss in terms of economic impact and in terms of the contribution to the province would far exceed any cost associated with the operation of the biomass plant."

His comments come a day after a lawyer raised the possibility of power customers facing the costs of running the biomass plant at a Nova Scotia Utility and Review Board hearing.

The hearing into a proposed discount electricity rate for the mill concluded Wednesday, and the prospective buyer of the mill is urging the regulator to make a decision before the end of August.

Pacific West Commercial has said that without a decision in its favour and approval from the Canada Revenue Agency, the deal to buy the mill could collapse.

The operation in Point Tupper, N.S., shut down last September, throwing 600 employees out of work and affecting another 400 forestry contractors. It was closed after struggling with soaring fuel and electricity costs, a strong Canadian dollar and declining demand.

It is under creditor protection until the end of August.