The year 2021 delivered record profits for shareholders of Emera Inc, the parent company of Nova Scotia Power.
Earnings per share were up 11% from $2.68 in 2020 to $2.81 in 2021. Emera earned $723 million in profit; Nova Scotia Power made $241 million profit, an increase of $20 million from 2020.
Higher natural gas prices and stormy weather last year in many parts of the United States helped Emera Energy, the division that makes energy trades, increase its profits by 37%.
Emera noted it spent a total of $250 million in Florida and Nova Scotia last year to strengthen the reliability of the grid and reduce power outages. During a conference call with financial analysts this morning, Emera CEO Scott Balfour said the “frequency” of power outages in this province decreased by 29% last year, compared with the five-year average.
Emera told analysts it plans to spend $8.4 – $9.4 billion over the next three years, 2022-2024, making new capital investments. Seventy percent of that spending will be in Florida — Balfour said continuing sales growth there will help subsidize investments in renewable energy projects here to meet government environmental targets by 2030.
Balfour described Nova Scotia Power’s request to increase power rates by 10% over three years as well as a controversial proposal to shift millions of dollars in project costs to ratepayers from shareholders this way:
The General rate application is an essential step on the path to a greener Nova Scotia and achieving the government’s 2030 carbon goals. Decarbonizing our electric grid is a complex endeavour, ensuring the reliability of the grid as a whole is not put at risk. It also required significant investment which is why all jurisdictions that are working to reduce carbon intensity are seeing the cost of that energy increase.
Balfour said Emera plans to spend $500 million over the next three years on a project called the Eastern Clean Energy Initiative.
“We need to continue to invest in wind, batteries, and transmission infrastructure to import clean hydro from neighbouring provinces because they offer the most reliability for Nova Scotians,” said Balfour. (This does not include the Atlantic Loop, which is still in a conceptual stage, but does include costs associated with the Labrador Island Link and Maritime Link.)
Balfour apologizes to solar companies
“Solar is absolutely part of helping Nova Scotia reach its 2030 climate goals,” said Balfour, before adding solar cannot be relied upon to replace coal-fired generation that is still required during cold winter nights. Balfour then did something unprecedented: he apologized for how the power company handled proposed changes in the rate application around the net-metering program.
“The reaction from the solar industry, customers, and government was strong,” Balfour told those participating on the conference call. “We listened. We understand the concerns we heard and we have since withdrawn the proposal….we are seeing the debate over net-metering play out in many locations. It’s a complicated issue… Our initial proposal tried to solve an issue of imbalance in the current rate design between customers. We were trying to do the right thing for our customers. It was certainly not our intention to hurt businesses in Nova Scotia with this proposal. We are sorry for not working harder to address the impact this change would have had on those businesses.”
At the end of 2021, about 30% of electricity in Nova Scotia came from renewables sources such as wind and hydro. Balfour continues to say that by the end of 2022, “60% of our energy will come from renewable sources.”
He is clearly banking on full and steady deliveries of renewable hydroelectricity from Muskrat Falls, despite the fact there will be interruptions during the commissioning of the Labrador Island Link until the end of May. The CEO was asked when he expects to have enough information to determine whether the Atlantic Loop — a potential $5 billion power line that would be built from Quebec through New Brunswick to Nova Scotia — might get off the drawing board.
“We are still hopeful for more clarity by mid-year,” replied Balfour. “We continue to be encouraged by ongoing discussions with the federal and provincial governments. It’s a really complex project and we need to work through those complexities.”