Legislation that would limit power rate increases in Nova Scotia jeopardizes the province’s goal of getting off coal by 2030, the head of the province’s privately owned utility told a legislature committee Monday.
Peter Gregg, president and CEO of Nova Scotia Power, said the Progressive Conservative government’s amendments to the Public Utilities Act would restrict the utility’s ability to make immediate investments that are needed to strengthen the power grid and move to renewable sources of energy.
“These are the investments that this legislation constrains, delays or cancels,” Gregg told the law amendments committee, saying that without the government’s proposed cap, rates would increase just $15 per month for the average household by 2024. ”We have to have a clear conversation of what we’re actually saving here,“ he said.
Nova Scotia Power is asking the province’s regulator for a rate increase of nearly 14 per cent over the next two years, while the government’s bill would limit that to 1.8 per cent over the next two years — excluding increases linked to fuel costs.
The government has admitted that a hefty increase is likely still in store for customers because of rising fuel costs when the Nova Scotia Utility and Review Board makes its final decision expected at the end of December.
Gregg said the legislative changes would result in $150 million in lost revenue for the utility over 2023 and 2024, meaning “costs will have to be reduced to adjust.”
“This legislation puts Nova Scotia’s reliable and clean energy future at risk,” he said. Gregg told legislators that they have a choice to make and they can’t “logically” support both the proposed bill and the province’s climate goals.
He was later asked by reporters whether Nova Scotia Power could wean itself off coal by 2030 if the legislation passes. “I really don’t really see a path that will let us do that,” Gregg said.
Bill Mahody, who argues on behalf of consumers before the review board, criticized the bill for overriding the independence of the regulator by setting power rates from the floor of the legislature.
Mahody said the legislation runs the long-term risk of increasing the utility’s financing costs, which would result in a far greater cost to consumers than the temporary savings resulting from the government’s bill.
“I would respectfully urge our elected representatives to allow the rate-setting mechanism to unfold,” said Mahody. “Independent utility regulation is in the best long-term interest of ratepayers.”
Brian Gifford, of the Affordable Energy Coalition, also expressed concern the bill would undermine the independent review process as carried out by the regulator and said the rate increase cap would do little to help low-income earners.
Gifford called for the legislation to include a change that would allow the review board to consider different power rates for lower-income households. “If now is not the time to create a regulated low-income rate relief program, when will there ever be a time?” Gifford asked.
The change was later proposed as an amendment to the bill by the NDP but it was voted down by the Progressive Conservative majority on the committee.
The bill was returned to the legislature for further consideration with only a minor Tory amendment that clarified that revenue from the rate increase is to be used to “improve the reliability of service to ratepayers.”
This report by The Canadian Press was first published Oct. 31, 2022.
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