Natural Resources and Renewables Minister Tory Rushton says an amendment introduced to the Public Utilities Act on Wednesday will make Nova Scotia Power “more accountable to ratepayers.”
The proposed amendment to the Public Utilities Act will increase the maximum amount the company can be fined for failing to meet performance standards around reliability, as well as the frequency and duration of power outages.
Those standards were approved by the Utility and Review Board and have been in place for half a dozen years. The current maximum fine is $1 million per year and the proposed amendment would increase that to $25 million per year.
“We’re increasing the maximum potential penalty for things like power outages and reliability. This will make the utility more accountable and motivate better service delivery,” Rushton said during a briefing with reporters.
But will it make any difference?
Consider that in 2022, Nova Scotia Power paid $375,000 for failing to meet three of more than a dozen performance standards established by the Utility and Review Board (UARB) half a dozen years ago. The power company was fined $250,000 previously, in 2019.
Rushton said his department is working on drafting “new performance standards” even though the UARB already has standards in place that are supposed to deal with restoring service following storms and responding to customer reports of outages. Standards were established following prolonged power outages in 2014 after tropical storm Arthur.
Given that the UARB is the arm’s length agency that decides if Nova Scotia Power failed to meet the bar and how much of a penalty it should pay, Rushton was asked to explain how increasing the size of the fine would lead to improved service and reliability.
“When you up the ante, so to speak, then there is more strength to hold the company accountable for what they do provide,” said Rushton.
Nova Scotia Power spokesperson Jacqueline Foster said the company will take some time to study the proposed amendment. In the meantime, Foster provided the Examiner with this emailed statement:
Our team is committed to meeting Performance Standards. They are an important part of the strong regulatory oversight of our business. We file quarterly and annual performance standards reports to the NS Utility and Review Board as part of our ongoing work to ensure transparency and accountability to our customers: Performance Standards| Nova Scotia Power (nspower.ca)
Each year we target approximately $180 million in new equipment, upgrades and refurbishments and tree trimming province wide. Going forward, our plans include increasing this investment year over year, including nearly doubling our annual investment in tree trimming over the next five years — to continue to improve reliability of service. In 2022, data shows that on average, customers in Nova Scotia had their power on 99.15 per cent of the time. That doesn’t mean there isn’t work to be done. We know that for some customers, the number and duration of outages is higher than average, and we’re focused on improving that.
Rushton said any future penalties would also be paid by shareholders — not ratepayers — and would be held in a separate fund to be distributed to those customers most affected by power outages. Rushton said he wanted to make it clear just because the maximum fine was being increased to $25 million didn’t mean it would be imposed.
It’s interesting the Houston government is proposing to increase a fine on Nova Scotia Power for failing to meet performance standards around reliability at the same time it is hesitating to impose a maximum $10 million fine for failing to meet regulations around renewable energy targets.
The company was given a three-year extension on a deadline to generate 40% of its electricity from renewable sources between 2020-2022. Delays in the anticipated amount of hydroelectricity from Muskrat Falls and no alternative plan have resulted in the power company coming up short.
Last year, 32.8% of electricity came from renewable sources, an improvement over the 30% in each of the previous two years, but still well below the bar set by the Renewable Electricity Act. Shareholders, not ratepayers, will take the hit if the government decides the company has failed to exercise due diligence and imposes some level of fine. Rushton said his department has now received the paperwork from Nova Scotia Power and a decision will be forthcoming.
It’s difficult to tell how much of this proposed amendment is serious and how much is simply window dressing.
A year ago, when the government brought in changes to the Public Utilities Act, one amendment was to appoint a committee or “partnership table” to advise the UARB on developing additional performance standards and penalties. Rushton acknowledged that has not happened yet but said the regulations to establish the advisory group are coming soon.
Other bills related to energy include anti-strike legislation
Rushton also introduced a bill to amend a section of the Electricity Act that will allow the province to issue Request for Proposals to companies interested in providing solutions to store renewable energy from the wind and sun and geothermal sources.
Currently, only Nova Scotia Power can provide energy storage systems. The power company recently announced it would delay a large-scale battery project because it no longer had as much money to spend after the Houston government limited how much it could get from consumers through power rates.
Rushton said a company would be hired to manage the RFP procurement, in a process similar to how the province approved five wind farms that are now in various stages of environmental assessment and development around the province.
The Houston government also introduced an amendment to ban strikes or work stoppages on two green hydrogen megaprojects being proposed for Bear Head and Point Tupper.
The Construction Projects Labour Relations Act was originally introduced in 2016 to accommodate the Liquefied Natural Gas (LNG) project proposed by Pieridae Energy for Guysborough County. That didn’t go ahead. The act was designed to reassure investors by legislating labour peace on megaprojects worth $2 billion or more.
The act requires the proponent and the trade unions working on the project to sign a collective agreement specific to the project that bans work stoppages during its construction.
For example, if the pipefitters union were on strike at the Irving Shipyard in Halifax, members of the same pipefitters’ union working on a green hydrogen project for EverWind at Point Tupper could not put down tools to support them.
The proposed amendment also includes onshore and offshore wind farms connected to any future green hydrogen development.
Cynthia Yazbek, a senior official in the Department of Labour, Skills and Immigration, said the Nova Scotia Construction Association and trade union associations in Cape Breton and northern Nova Scotia were consulted prior to introducing this bill.
I don’t understand what the point is to raising the maximum penalty if there has never been a fine (all of twice) anywhere near the $1M it is now. It means nothing when the province knows full well that any penalty will be passed on to the consumer. Sure, we can fine you if you can’t keep the lights on, but we won’t because we know you will only charge the poor saps who don’t have their lights on more for not being able to keep their lights on.