Advocate says deal with the utility doesn't balance the risk of the proposed seven-year-long agreement.
POINT TUPPER, N.S.—A consumer advocate says the proposed power rate arrangement to reopen a Nova Scotia mill is too risky for rate payers.
Lawyer Bill Mahody has been appointed consumer advocate in the case by the provincial government and the Nova Scotia Utility and Review Board.
His views on Pacific West Commercial Corp’s plan to buy the NewPage Port Hawkesbury mill have been released by the board in advance of a public hearing Monday.
The mill was shut down in September 2011, it’s owners blamed high power costs, a strong Canadian dollar and rising shipping costs for the closure.
The closure put most of the mill’s 600 employees out of work, roughly 50 people were left in place to maintain the plant while searching for a new buyer.
Pacific West hopes to take possession of the mill in August, offering to pay $33 million for the operation.
The deal now hinges on approval from the Canada Revenue Agency as well as the utility board’s approval of a complex partnership with Nova Scotia Power.
But Mahody argues the amount of money Pacific West is willing to put into the partnership with the utility doesn’t balance the risk of the proposed seven-year-long agreement.
Pacific West says if the partnership isn’t approved it could mean the mill won’t be a low-cost operation, which it says will prevent the mill’s success.
It cautions that delays in approval would push back the opening of the mill which would in turn jeopardize the company’s ability to take paper orders for 2013.
It hopes to have the mill reopen in late September.