Nova Scotia Power says repaying its $96-million fuel bill starting next April will cancel out a rate cut consumers are getting in the new year.

Residents would see a short-term 4.5 per cent drop in their power bill this January when the cost of energy conservation programs is taken off because of regulations introduced by Nova Scotia's Liberal government.

In April, the same amount would be added back to start paying that fuel debt.

On Monday, NSP filed scenarios on the impact on rates if it recoups its fuel bill over a two- or three-year period

All of the utility's scenarios include starting to pay off the bill next April and applying a $33 million windfall from higher electricity sales last winter.

In the long term, one scenario sees residential customers paying 3.3 per cent less in 2017 than we do today. But that's conditional on nothing else changing for Nova Scotia Power.

The utility says consumers are still ahead because the short-lived rate cut is during the highest use winter period.

Avoid interest

Nova Scotia's consumer advocate, representing the utility's 400,000 residential customers, wants the outstanding fuel bill paid back as soon as possible to avoid paying NSP interest.

Delaying the fuel repayment until April will cost an additional $1.7 million in interest costs.

Consumer advocate lawyer Bill Mahody is concerned the rate scenarios presented do not take into account $30 million in additional fuel costs the utility knows it will incur next year.

"There could be another deficit by the end of 2015. Nova Scotia Power has not factored that in yet," he says.

Large businesses are proposing a three year payback period but still want to start paying off the fuel costs in January to avoid assuming their portion of the $1.7 million in interest.