Regulator urged to reject N.S. Power wind farm bid
Ratepayers at risk if utility downloads cost of building South Canoe, hearing told
Posted: Feb 21, 2013 8:09 AM AT
Last Updated: Feb 21, 2013 10:38 AM AT
Independent power producers are urging the provincial regulator not to allow Nova Scotia Power to charge ratepayers for the cost of building a wind farm in Lunenburg County.
John Brereton, the president of Natural Forces Wind Inc., told the Utility and Review Board on Wednesday that it should reject Nova Scotia Power's application to have its $93-million share of the capital cost of the South Canoe project approved and charged to ratepayers.
"We do not believe that the work order should proceed as we do not believe that it is in the best interest for the Nova Scotian ratepayer," Brereton told the hearing in Halifax.
South Canoe is a $200-million wind farm development planned for Lunenburg County that involves Nova Scotia Power, Oxford Frozen Foods and Minas Basin Pulp and Power.
The utility owns a 49 per cent stake in South Canoe, which is set to be operational by 2015 and become Nova Scotia's largest wind farm.
Brereton, whose company was among the 16 independent power producers that bid and lost out on the project last year, said Nova Scotia Power's application gives the utility an unfair advantage and may mean South Canoe's bid wasn't as low as it seemed.
"The most important thing that we'd like to say is that in submitting our bids, we priced in all of the risk associated with delivering a price per kilowatt hour. Nova Scotia Power, in this application, is now looking to shift risks on to the ratepayer," Brereton said Wednesday.
"We're confident that if the proposals were compared on an apples-for-apples basis, the best of our bids would be a better deal for the Nova Scotian ratepayer."
Project will benefit customers, says utility
John Merrick, one of the province's consumer advocates, said he's not a fan of Nova Scotia Power Inc. behaving as if it was a private wind developer when it teamed with the two companies.
"On balance, we don't like the arrangement of NSPI wearing two hats. By permitting NSPI to recover its actual costs, the bid price by NSPI is not binding and NSPI could subsequently recover increases," he said.
"That results in the potential of NSPI setting its bid price low enough that the project in which it held a partnership interest would have a competitive advantage over other independent third-party producers."
Merrick also said his role is not to speak against a proposal that may produce a lower rate for ratepayers.
Robin McAdam, an executive vice-president with Nova Scotia power, said the project will benefit customers who may end up paying more if another company produced the wind power.
"Nova Scotia Power's low cost of capital, tax advantages and experience as a generation developer is instrumental in delivering that best value for ratepayers," he said.
The consumer advocate said if the Utility and Review Board approves the $93-million cost, it should make Nova Scotia Power shareholders pick up any cost overruns rather than coming back to ratepayers.
South Canoe will also need another $20 million for transmission upgrades, which the company will apply for at a later date.
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