HALIFAX - The court-appointed monitor overseeing the sale of an idled paper mill in Cape Breton said Wednesday two potential buyers need lower power rates if they're to reopen the mill and operate at a profit.

The comments about the NewPage mill in Point Tupper came within hours of Nova Scotia Premier Darrell Dexter hearing an ultimatum from AbitibiBowater that it will shutter its mill in Brooklyn unless it gets provincial aid and lower power costs.

Mathew Harris, a spokesman for monitor Ernst & Young, said the paper mill in Cape Breton needs to lower electricity rates and other costs to remain viable.

"They (the bidders) expect to see lower rates if they're going to operate a profitable mill," he said outside court.

"It's not just power rates. It's the cost of (wood) fibre, it's the cost of labour and it's the cost of power. At the end of the day, there's been a significant change in the paper industry in Canada and the cost structure has to change if the mill is going to be operated at a profit."

Liz Pillon, a lawyer representing Ernst & Young, told a hearing in the Supreme Court of Nova Scotia that there are four remaining bidders for the NewPage mill in Point Tupper.

Two of the bidders want to keep the mill operating and two would buy the plant and sell off its assets, Pillon said.

Harris declined to reveal the names behind the four final bids.

The issue of electricity rates at the big mills has been before the province's utility regulator this month.

Last week, NewPage and Bowater made their case for a special discount at a Nova Scotia Utility and Review Board hearing, saying a lower rate would help secure the future of the mills.

A spokesman for Nova Scotia Power said the issue of lower rates for the mills is before the board and the company looks forward to its decision.

The paper companies said in their submission that electricity rates rose 23 per cent in two years, and those increases are one of the reasons for their difficulties.

They have asked the regulator for a nine per cent drop in rates in 2012 from current levels, and also want exemptions from variations in rates tied to Nova Scotia Power's fuel costs. The companies also wanted the special discount rates to continued over the next five years.

Bill Mahody, the province's consumer advocate, said he objected to the submission because NewPage didn't prove the price drop was necessary to keep the company in operation, and he would like to see a future buyer of the NewPage mill make its own application for a rate decrease.

"The new operator needs to come before the board and prove the new rate is needed for them to operate the mill," he said in an interview.

Ernst & Young was appointed monitor in the case by the province's Supreme Court after NewPage applied for protection from its creditors in September.

About 1,000 people lost their jobs after the mill shut down. The company said it was struggling with soaring fuel and electricity costs, a strong Canadian dollar and declining demand.

It lost US$50 million over the last year, according to an affidavit NewPage filed with the court.

The mill has the capacity to produce 545,000 tonnes of paper a year, and was an economic mainstay in the Port Hawkesbury area for the past five decades.

Harris said the goal is to complete a sale by Dec. 1, but it's possible the monitor will request an extension on the original timeline.

The court also heard a submission from non-union employees of the mill, who said they're going to create an association to represent their interests.

Russ Waycott, a former vice-president at the NewPage mill, told Judge David MacAdam that about 200 former supervisory employees are looking for a qualified lawyer.

Outside court, he said the former employees were shocked to find their pension is underfunded and they will seek status at the top of the creditor's list. Waycott said the group will urge any new buyer to assume responsibility for the unfunded pension liability.

A hearing will be held Friday to hear arguments on how many of the woodland harvesters and silviculture operators who are owed money by the mill will get access to a special fund set up by the monitor.