Residential customers of Nova Scotia Power are on track for rate increases of 1.3 per cent in each of the next three years.

A decision released by the Nova Scotia Utility and Review Board on Tuesday clears the way for the increases, part of NSP's fuel stability plan as required by provincial legislation.

The rates come following a consensus agreement the utility signed last month with the province's consumer advocate, small business advocate, industrial group and municipal electric utilities. Although Port Hawkesbury Paper did not sign the agreement, the company does not oppose it.

An agreement in the public interest

With the terms of what amounts to a settlement agreement, the ruling said the board "can have confidence that an agreement is in the public interest when it is supported by representatives of all of the customer classes."

Following compliance filings from the utility, the following percentage change for each of the next three years will be approved and become effective Jan. 1, 2017:

Resident: 1.3 per cent (based on energy beginning to flow from Muskrat Falls on April 1, 2019).

Industrial customers: 0.5 per cent for small, 1.6 per cent for medium and 1.4 per cent for large.

Municipal electric utilities: 1.2 per cent.

Those increases are based on the expectation the utility will spend $509.8 million, $688.1 million and $653.7 million, respectively, in each of the next three years on fuel.

'Rates that are just and reasonable'

In the decision, the board said it "is satisfied that the consensus agreement is in the public interest, that it satisfies the requirements of the Electricity Plan Implementation (2015) Act, and that it should be approved. In the board's opinion, the agreement provides for rates that are just and reasonable."

Any variance in the rate stability period as a result of fuel costs would be addressed in the hearing related to 2020. A hearing in November will determine if there is an outstanding balance for this year's fuel costs and, if so, how it will be addressed.