The legislation introduced Thursday by Energy Minister Charlie Parker also means the amount of money paid through electricity rates for executive salaries would be capped at a level similar to a provincial deputy minister.
As well, he said bonuses at the private company would be covered by shareholders, not ratepayers.
"People are telling me that it's not fair that executives at Nova Scotia Power have had their bonuses and salaries paid for by ratepayers when there are families struggling to make ends meet, and I agree," Parker said in a statement.
The salaries of deputy ministers range from $139,000 to $191,000.
The salary of Rob Bennett, Nova Scotia Power's president and chief executive officer, was $398,000 last year, according to a regulatory filing in May with the province's Utility and Review Board.
The salaries of 13 other senior executives at Nova Scotia Power were included in rates in 2011, including five who were with the utility for only part of the year.
Their salaries totalled $1.6 million, or an average of $129,000. But their individual pay wasn't disclosed in the May regulatory filing.
The legislation would also require Nova Scotia Power to file multi-year rate applications, which Parker says will cut the costs of hearings at the utility and review board.
The government says the cost of a rate hearing can reach $2 million.
The legislation would also block additional rate increases until at least 2015.
The bill is seen as a response to a public backlash over rising electricity rates.
Parker promised to bring in the legislation last month on Nova Scotia Power, a subsidiary of Emera (TSX:EMA).
The government says based on 2012 salaries, the cap on executive salaries would mean savings of more than $500,000 a year.
Electricity rates have become a key issue in the province and on Thursday, Liberal Leader Stephen McNeil and Progressive Conservative Leader Jamie Baillie also introduced bills in the legislature.
McNeil's bill proposes setting performance standards for the utility and significant fines when those standards aren't met.
"We have frequent power interruptions around this province — fining Nova Scotia Power substantial sums of money when Nova Scotians endure repeated electricity outages means reliability becomes a much greater priority for the monopoly," said McNeil in a news release.
Baillie said his bill would remove a guaranteed profit for Nova Scotia Power.
"We can make the power company work for us, not Emera," he said in a news release. "They will lose money when they let customers down."
The NDP holds a majority in the legislature, so bills brought in by opposition members rarely get passed.