Emera puts Atlantic Loop project on pause after N.S. moves to limit profits

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Emera puts Atlantic Loop project on pause after N.S. moves to limit profits
WATCH: The viability of a proposed mega power project -- the Atlantic Loop -- could be in question. Nova Scotia Power's parent company says it's putting a pause on spending. The announcement came after Nova Scotia introduced legislation this week to cap power rate increases and limit the utility's profits. Alicia Draus on that story – Oct 21, 2022

Emera, the parent company of Nova Scotia Power, says it’s putting a pause on the Atlantic Loop.

This comes after the province introduced legislation on Wednesday that limits the utility’s profits.

The legislation puts a limit to a proposed power rate increase at just 1.8 per cent over the next two years, significantly lower than the nearly 14 per cent general rate increase Nova Scotia Power was applying for.

READ MORE: New study suggests Atlantic Loop needed as part of energy mix as coal is phased out

Other changes under the legislation would prevent the review board from approving the utility’s request for an increase in its rate of return on equity any higher than 9.25 per cent, while any excess profits above the approved amount will continue to be returned in full to ratepayers.

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In a statement to Global News, Emera says the proposed legislation has very real consequences for customers in the province.

“It impacts Nova Scotia Power’s ability to serve customers by limiting how the company can invest in reliability and cleaner energy,” the statement said.

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“The Atlantic Loop is a key piece of the solution to meet Nova Scotia’s mandated 2030 clean energy targets. We’ve paused work on the Atlantic Loop project while we assess the full impact of this legislation.”

The Atlantic Loop is a proposed energy corridor that would connect the four Atlantic provinces to hydroelectricity from Quebec and Labrador. It’s often been cited as a key component to help Nova Scotia reach its climate targets, which include phasing out coal-fired electricity generation and having 80 per cent of the province’s energy come from renewable resources by 2030.

“We’ve always said the loop is an important aspect that would help us achieve our environmental goals,” said Premier Tim Houston on Friday when asked about Emera’s pause on the project.

Houston maintained that even without the loop, meeting the legislated climate targets are possible.

“That’s why we’ve been focusing on solar, wind, legislation to make hydrogen happen,” he said.

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Liberal Leader Zach Churchill said it was concerning Emera is taking this action, and that it’s the government’s job to negotiate with the company.

“It’s clear that the government moved on a piece of legislation without thinking about what the consequences would be on that front,” he said.

But the Premier says the Atlantic Loop was never a guaranteed project. He noted that the project is heavily dependent on funding from the federal government and Ottawa has yet to make any commitment.

“The federal government has been cagey on whether or not they’ll fund it,” said Houston.

“That’s why we’ve always been focused on other ways to meet that targets.”

However, NDP leader Claudia Chender says her concern is that there are no detailed plans for what those other ways might be.

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“We have several times asked this government and NS Power, what’s plan B? And we’ve heard, oh there’s a plan B, oh there’s a plan B, but we’ve never heard what it is and, obviously, it’s concerning.”

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