HALIFAX -- The provincial regulator has sided with a non-profit agency and ordered Nova Scotia Power to spend more than $33 million annually on energy efficiency programs over the next three years.

In a decision released Wednesday, the Utility and Review Board rejected a proposal from the power company to spend just $22 million per year on its 2016-18 Demand-Side Management plan.

"While NSPI's Plan may meet the test of short term affordability, it does not do it in a manner that is in the best interests of Nova Scotia Power Incorporated's customers, who also must be given the opportunity to achieve long term cost savings," states the board in its decision.

Demand-Side Management refers to any program or activity designed to influence the amount and timing of electricity usage, and ultimately reduce the overall demand for electricity.

The board has ruled that Nova Scotia Power must spend $33.2 million on DSM in 2016, $34 million in 2017 and $34.9 million in 2018.

Efficiency One, the non-profit agency responsible for providing energy efficiency programs, had initially submitted a proposal to the board calling for spending of about $40 million per year. It reduced that amount to $38 million in June after talks with the province's consumer and small business advocates and the Affordable Energy Coalition.

The agency said the cost to consumers, which is embedded in power rates, would result in some minimal short-term increases to power bills that would be offset by long-term savings as the overall system reduces energy costs.

Nova Scotia Power said at the time that $38 million per year was more than consumers should be expected to pay, saying customers want short-term as well as long-term savings.

The board notes in Wednesday's decision that Nova Scotia Power customers have been paying about $40 million per year for DSM since 2011, and raised concern about the company's proposal to reduce that amount by nearly half.

"This comes at a time when NSPI's own (integrated resource plan) supports DSM spending 35 to 40 per cent higher than the amount suggested by (Efficiency One,)" reads the decision.

"There is a radical disconnect between the IRP, which is designed to achieve the lowest long term cost for customers, and the NSPI Plan, which appears focused mainly on avoiding a 2016 rate case."