The Nova Scotia Utility and Review Board has approved, with conditions, a $1.52-billion deal for the Maritime Link — a subsea cable designed to transport electricity from the Muskrat Falls project to Nova Scotia.
Nova Scotia Power's parent company, Emera, is a minority partner in the Muskrat Falls hydroelectric project and is responsible for the Maritime Link, which may see as much as 40 per cent of the electricity from the 824-megawatt project moved to Cape Breton by subsea cables.
The UARB ruled the project is likely the cheapest option for Nova Scotia ratepayers but only if Newfoundland and Labrador's power company, Nalcor Energy, can guarantee access to additional electricity to meet Nova Scotia's needs at market price.
Emera is currently set to receive 20 per cent of the power produced by the $7.7-billion Muskrat Falls project, but the UARB said the lack of guaranteed power beyond that 20 per cent creates "substantial uncertainty," and without a commitment from Nalcor to provide additional energy, the deal is not the cheapest energy alternative for ratepayers.
The board's approval is conditional on receiving that commitment from Nalcor in writing.
"Taking into account all of the evidence, the board finds, on the balance of probabilities, the [Maritime Link] project (with the market-priced energy factored in) represents the lowest long-term cost alternative for ratepayers in Nova Scotia. In the absence of market-priced energy the Maritime Link project is not the lowest long-term cost alternative," stated the UARB's summary of findings.
Nalcor is non-committal
The head of the electrical utility in Newfoundland and Labrador wouldn't agree to put in writing an offer to sell its excess hydro from Muskrat Falls at market prices.
Ed Martin, the president and CEO of Nalcor Energy, said the project is being developed first for the benefit of Newfoundland and Labrador.
Martin told reporters he wants time to study the UARB decision, but added it leaves Nova Scotia's Emera Inc. with a decision: either find another source of low cost energy or take power from Labrador at market prices.
"We're open for business, the markets are out there and what we see now is just a confirmation of additional demand for our product," he said.
Emera said the project would add $1.50 per month to the average household's power bill over the first five years. The deal will run for 35 years.
During the spring UARB hearings, no one opposed the project outright but the consumer advocate, along with a lawyer representing several big businesses, said it's simply too risky to be locked into a deal for more than three decades.
They said they believe Emera should bear the cost, not ratepayers.
PCs, Liberals say they feel justified
"I think it's a green light and that the UARB has a done a full analysis," said Nova Scotia Premier Darrell Dexter. "They see the project as the lowest cost alternative for ratepayers. They certainly have given Emera some work they have to do, but I would see this as a step forward."
Both opposition parties said they feel vindicated by the UARB’s decision after levelling criticism at the deal.
The Nova Scotia Liberal Party said the province's arrangement wasn't the best deal for ratepayers.
"Without having a guaranteed price for the surplus energy at the price that Emera projects it to be, this isn't the lowest cost alternative. So at the end of the day the deal as submitted by Emera and the NDP to the board for approval was not the lowest cost option," said Liberal energy critic Andrew Younger.
He said he isn't sure whether Nova Scotia Power will be able to negotiate a better deal with Nalcor.
Progressive Conservative Leader Jamie Baillie said he applauds the provincial regulator's changes to the deal.
"The premier should say to Nova Scotia Power and Newfoundland that the deal is not going forward as is. That it's obviously too expensive for Nova Scotia families to afford and that significant changes need to be made. The deal needs to be renegotiated if they want to save the project," said Baillie.