Nova Scotians will pay just over nine per cent more in the new year to light and heat their homes.

In approving a rate hike, the Nova Scotia Utility and Review Board also denied the province's two big mills the five-year discount they wanted.

Instead, NewPage Port Hawkesbury Corp. and Bowater Mersey Paper Co. Ltd. are getting a discount for three years, the board announced Tuesday.

For residential customers, the base increase will be 6.1 per cent, but that's before a three per cent fuel adjustment is added.

The board said the two paper mills must pay the fuel charge too, but justified the rate discount by saying ratepayers are better off if the mills remain in business.

Both mills have cited high power costs as a problem threatening their continued operation.

The NewPage paper mill near Port Hawkesbury has been closed since September, while the owner of the Bowater Mersey mill near Liverpool has been threatening to shut it down if it doesn't get help from the province.

Bowater's future

The discount will go into effect right away for that mill.

Some employees at the mill, as well as local business owners, hope Tuesday's decision to cut the company's power rate will make a big difference for the town.

Chris Evans has been an employee at Bowater Mersey Paper Co. Ltd. for 22 years and now eligible for a pension. He said at his age, it would be hard to find new work.

Evans said the mill's future has been on a lot of people's minds.

"It's big news. I mean, I think it's going to help some people, and some people it's not, but at least it'll help the town and the area and hopefully the company decides it's enough to keep it going," he told CBC News.

David Whynott, general manager of Carroll Tri-County Automotive in Liverpool, said the dealership's business could be affected, directly and indirectly.

"We cater to a lot of other businesses around the area, and do service work for them, we sell them vehicles and it's going to affect everyone because of the uncertainty of jobs is going to be a major factor in this area."

"My grandfather worked there, my girlfriend's father works there, so I hear about it all the time on a regular basis," Kyle Zwicker said. "You know three years is better than nothing at all, I mean I guess we would have liked to have got five."

The owners of the company that runs the mill, Resolute Forest Products — formally known as AbitibiBowater — say they're happy with the decision to cut their power rate, but over the next few weeks they'll evaluate the decision and review all possible impacts.

NewPage's future

It will likely also be available to any company that takes over the NewPage mill, although the new owner would still have to apply to the UARB to receive it.

The discount was welcome news for Matthew Harris, the court-appointed monitor looking after the NewPage sale.

"The two parties that are trying to establish a going concern for this mill have made it clear that it has to be profitable and has to be profitable for some time in to the future," Harris said Tuesday. "The only way that that happens, given the price of the product today, is if all of the costs are significantly reduced."