With Premier Tim Houston in Hollywood last week, Natural Resources & Renewables minister Tory Rushton was the government’s point man on Nova Scotia Power following a meeting of cabinet ministers last Thursday.
Rushton told the Halifax Examiner he still hasn’t seen the paperwork Nova Scotia Power has completed on how much electricity the company generated from renewable sources in 2022.
That’s literally a ten-million-dollar question because according to government regulations, if the power company didn’t average 40% from renewables in 2020, 2021, and 2022 it could face a maximum fine of $10 million.
The company essentially got an extension from the previous Liberal government when it couldn’t meet the original Renewable Energy Standards deadline by 2020. The 40% average was part of an agreement called the “alternative compliance plan.” But Nova Scotia Power has failed to comply, according to its own report to shareholders filed on February 23, 2023.
At issue is the failure to deliver the expected amount of renewable hydro power from Muskrat Falls, dubbed the “Nova Scotia Block.”
“With delivery of the NS Block commencing later than anticipated, as well as further interruptions in supply due to delays in the Labrador Island Link, NSPI did not achieve the requirements of the alternative compliance plan,” reads the report to shareholders. “The Renewable Energy Regulations require NSPI to have acted in a duly diligent manner. If NSPI is found not to have acted in a duly diligent manner, it could be subject to a maximum penalty of $10 million.”
Unlike most other costs, the regulations say this penalty cannot be downloaded on ratepayers. Shareholders will have to foot this bill if Rushton and Houston decide the company didn’t act with “due diligence.”
At this point it’s worth noting the problem in receiving renewable hydroelectricity from Muskrat Falls is due to the transmission system — the Labrador Island Link — in which Nova Scotia Power’s parent company Emera is part-owner.
Rushton didn’t want to talk about this on Thursday.
“I understand they [Nova Scotia Power] have completed their paperwork but it is not at my table yet,” said Rushton. “Once I have that documentation, I will tell you where we are going to go. But let’s see what those numbers are.”
Rushton wouldn’t have had to look very far to find those numbers. The chart above, which was included in a required report to federal regulators (Nova Scotia Power’s Management Discussion & Analysis for 2022), shows renewable sources accounted for 32.8 % of electricity produced last year.
That includes wind and hydro purchased from independent power producers, Nova Scotia Power’s own dams and wind farms, hydro over the Maritime Link, and biomass. That 32.8 % is less than the required 40% but it is an improvement on the 30% generated from renewables in each of the previous two years. Still, that’s a long way from averaging 40%.
The chart shows renewables accounted for 3,655 GWh of electricity compared to 11,134 GWh of all electricity produced in 2022 was part of financial disclosure made public more than a week ago on February 23. That said, I believe Rushton when he says he hasn’t seen these numbers yet. Because when he does, he is going to have to make a decision and sit down with Nova Scotia Power to discuss the consequences.
Projects shelved
The company has submitted a revised capital expenditures plan for 2023 and 2024 following the government’s passage of Bill 212, which limited its capital spending over the next two years to projects that will improve the reliability of the grid.
Nova Scotia Power has deferred or delayed work on a proposed transmission line at the New Brunswick–Nova Scotia Border, postponed a battery storage project to enable the addition of more wind and solar power, and moved back plans to convert a couple of coal-fired generating units to natural gas.
In its management discussion and analysis that accompanied its year-end financials released on February 23, Emera had this to say about the environmental goals Nova Scotia Power is supposed to meet and the obstacles thrown up by government legislation last November:
Future compliance with provincial and federal GHG emission caps, coal phase out requirements and targets, and renewable standards has been challenged as a result of the constraints imposed by the enactment of Bill 212, “Public Utilities Act (amended).
Interestingly, while Nova Scotia has legislation in place requiring coal-fired stations to close by 2030, the goal Emera listed in its management discussion with shareholders has a much later timeline: “The retirement of Emera’s last existing coal unit no later than 2040.”
Rushton was asked if he is concerned the government’s restriction on how much Nova Scotia Power can spend may jeopardize the province getting off coal by 2030.
“No, I’m not”, replied Rushton. “They are held to account by the legislative deadline of 2030. We will hold Nova Scotia Power to account on that. Nova Scotia Power has asked for a meeting but we haven’t scheduled one yet. I’m open to having a conversation if there is a capital project they need to do.”
The Houston government has already forgiven $165 million in compliance costs so Nova Scotia Power wouldn’t pass those on to ratepayers. So the door to government is never truly closed.
Perhaps the best news in the Nova Scotia Power year-end financial reports were numbers that show carbon emissions have declined by 45% since 2005 and the company expects to achieve 80% reductions by 2040. Of course considering that 80% of Nova Scotia’s electricity used to come from fossil fuel, it’s not surprising adding renewables yields some impressive sounding reductions. But hey, we’ll take it! Especially since there doesn’t appear to be a lot of progress toward other environmental goals.
Not surprised by this at all. Please don’t fine the beast. They will only apply for another rate increase to cover that fine. Why don’t we put and end to the guaranteed profit for the fat cats at NS Power and force them to run it like a real business in the real world. Who was the clown that spun it out of publicly run utility? Never mind. I know the answer. I am not a big fan of govenment run anything, but this is a huge disaster.