We know price certainty, stability and affordability are important to our customers, said Bob Hanf, President and Chief Executive Officer. Customers have also asked us for clarity on where rates are heading particularly business customers who are preparing their 2015 budgets. Its important to provide certainty on base rates, and indicate our objective for no rate increases in 2015.
Since the Nova Scotia Utility and Review Board approved a two-year Rate Stabilization Plan in 2012, Nova Scotia Power has implemented internal productivity initiatives to significantly reduce operating costs. Focus on cost management remains a priority for the company in 2014.
We are focused on affordability for customers, said Hanf. The Rate Stabilization Plan has allowed the company to reduce costs while improving service and reliability. We continue to address the challenge of rising fuel costs.
Nova Scotia Power has initiated discussions with customer representatives regarding rate recovery of outstanding fuel costs, and has proposed no fuel cost increase for 2015, while managing these costs for our customers. Since January 2013, Nova Scotia Power has incurred approximately $95 million more in fuel costs than those estimated and included in rates pursuant to the Fuel Adjustment Mechanism. Additional fuel costs have been primarily driven by constraints in the supply of natural gas in Nova Scotia.
Electricity rate adjustments in Nova Scotia occur through either a general rate application or the Fuel Adjustment Mechanism FAM process. The FAM ensures that customers pay only the actual, prudently incurred costs of fuel used to make electricity. Applications under either mechanism are adjudicated by the Utility and Review Board through a public process.