If timing is everything, executives at Nova Scotia Power (NSP) have clearly misplaced their Rolexes.

The publicly traded company, which provides most of the province’s electricity supply, recently applied to the province’s Utility and Review Board for a 3% hike in residential rates for each of the next two years – with potentially more increases to follow in 2015. The day after filing this application, the company held a posh party for the board of its parent company, Emera Inc. Then, 24 hours later, NSP released compensation information for its senior management that revealed salary and bonus increases of more than 50% in some cases.

In NSP’s application, the company prophesied hard times ahead. In what appears to be a catch-22 for businesses and residents alike, the 93-year-old company contends it needs money – a lot more money – in large part because two major pulp and paper companies, NewPage Corp. and Bowater Mersey Paper Co. Ltd., now have or will have significantly reduced power bills.

NewPage is closed temporarily, but is likely to reopen later this year with a new owner and a greatly reduced workforce. NewPage’s application for significantly reduced rates, which NSP supports, is now before the review board.

Bowater’s rates were slashed in January after the company made it clear it could not survive if it had to continue paying the rate that NSP was then charging.

To compensate for keeping at least two large employers competitive, the power corporation – which has raised its rates seven times in the past 11 years – is asking for another increase that will generate a total of $37.6 million over the next two years. The money will go toward meeting a projected $197.8-million total shortfall.

While Nova Scotians fumed, Emera held a swank celebration for its board and executives. According to CBC-TV, the event featured Cape Breton comedian Maynard Morrison, the Halifax Titanic Orchestra and the Mellotones, a popular band in Halifax.

The compensation issue is even more rankling for many. NSP CEO and president Rob Bennett took home more than $1.1 million last year – a 23% jump over the previous year. He was joined by chief financial officer Judy Steele, whose annual compensation more than doubled last year, and by Chris Huskilson, president and CEO of Emera, who received a 20% rate hike in the same period, pushing his total compensation package to $2.99 million.

Progressive Conservative Leader Jamie Baillie was quick to point out how excessive the pay scales are: “Hydro-Québec, a comparator to Nova Scotia Power, is 10 times the size, and yet its CEO makes half of what the CEO of Nova Scotia Power makes and [also] makes one-sixth of what the CEO of Emera makes.”

Baillie’s government has introduced a raft of new legislation to ensure that, among other things, decisions on return on equity for NSP are fair to ratepayers, not just shareholders, and that executive bonuses come from NSP profits, not from customers. For NSP execs, there could be some lumps of coal in the holiday stockings this year.

© 2012 Investment Executive. All rights reserved.