Muskrat Falls is seen at the Churchill River in central Labrador in this undated file photograph. (Greg Locke/Reuters)


The Nova Scotia government has passed regulations laying out the process to approve or reject a $1.2 billion project underwater cable bringing  hydroelectricity from Newfoundland and Labrador to the province.

One block of Muskrat Falls power, about 20 per cent after the first five years, is reserved for Emera Inc.'s use. In return, the Nova Scotia company is building the maritime subsea link between the two provinces.

Another 40 per cent block is reserved for power needs on the island of Newfoundland.

Ratepayers will pay to build the transmission link if the Utility and Review Board decides it is the lowest cost alternative to supply power.

New federal regulations phasing out coal are forcing the province to import hydro and Emera's president estimates the changeover will push rates up between two and three per cent every year.

Premier Darrell Dexter said ratepayers would be worse off sticking with coal.

"This is not you should expect to see something go up two to three per cent or zero, this is you accept the fact that renewables is the best stable energy course to pursue, or you take some other course that will cost you much more in terms of meeting those coal regulations. It would be $1.3 billion of  lost investment which would go straight to the ratepayers," he said.

The UARB has 180 days from the date it receives Emera's application to make a decision.

The process can't begin until a federal loan guarantee is signed for the Muskrat Falls project.

The Nova Scotia government said the Maritime Link project would bring stable electricity rates for 35 years.