Emera denies misleading Nova Scotia regulators over Maritime Link
Emera is trying to recover the full cost of Maritime Link from ratepayers
The chair of the Nova Scotia Utility and Review Board challenged Emera's move to recover the entire cost of the Maritime Link from ratepayers when it was delivering a fraction of promised electricity from Labrador.
Board chair Peter Gurnham is hearing an application from an Emera subsidiary seeking $1.7 billion, which is the money spent on the transmission system to bring hydroelectricity from Muskrat Falls to Nova Scotia.
From mid-August to the end of November, only 18.9 per cent of contracted electricity from the Nova Scotia Block of the Muskrat Falls hydroelectricity project was delivered to Nova Scotia.
When electricity first started being transmitted in August, that triggered the start of a 35-year supply deal. It also allowed Nova Scotia Power Maritime Link to apply to regulators to recover the total cost of the Maritime Link from customers, which it did immediately.
Gurnham questioned the timing during Tuesday's public hearings into the application.
"Do you think that if the board had been aware that only 19 percent of the energy was going to be delivered, that we would have agreed to convene this hearing?" Gurnham asked Rick Janega, CEO of Nova Scotia Power Maritime Link.
"I can assure you we did not put this application forward with an expectation that it was going to be 19 percent. We did expect higher energy flows than that," Janega replied.
$169M already rolled into rates
Nova Scotia Power Maritime Link is seeking $169 million from Nova Scotia Power customers in 2022. The amount has already been rolled into rates.
Since the Maritime Link was completed on time and on budget, ratepayers have paid the Emera subsidiary about $450 million.
This summer the Emera subsidiary signed an acceleration agreement with its Newfoundland partner, Nalcor, to at least get some of the long promised, long delayed electricity finally flowing into Nova Scotia.
But once again the Newfoundland and Labrador side of the development disappointed. Software bugs persist at Nalcor's Labrador Island Link or LIL.
No electricity at all went sent in October, leading Gurnham to muse about whether regulators were being duped.
"Is it your view that the board shouldn't feel it was misled into having this hearing," Gurnham asked.
"There was no effort to mislead the board in this, we signed the acceleration agreement in good faith that we were acting in the best interests of customers," Janega said.
"We were in no way shape or form intending or misleading anyone in this hearing process with this application."
Janega insisted the extent of the software bugs came as a surprise.
He also repeatedly defended the acceleration agreement. He said it brought Nova Scotia Block electricity into the province as much as a year earlier than if the company waited for Muskrat Falls to be fully commissioned, which was part of the original deal with Nalcor.
Nalcor has agreed to make up undelivered electricity by the end of 2022 and cannot sell to anyone else until that is completed.
"I admit it is bumpier with the LIL commissioning," said Janega. "It's been off more than on. But this is a short period of time at the front end of a 35-year agreement."
Surprised 'critical software bugs' remain
In the short term, it's unclear when the software problems will be fixed.
On Monday, Janega and Nova Scotia Power vice-president David Landrigra predicted they would be solved "in the near future."
On Tuesday, lawyer David MacDougall, who is representing municipal utilities, raised a monthly status update filed last Thursday by Nalcor to Newfoundland regulators.
The report said supplier General Electric was still fixing "critical software bugs" and that without a detailed schedule, March 31, 2022, was a reasonable date for trial operations to be completed.
"I guess I'm somewhat surprised that this report was indicating that there were still critical software bugs that had to be resolved," MacDougall said.
Situation improving daily
Janega said there has been progress made since the Dec. 2 update and his understanding is that final software is being installed on the Labrador Island Link.
"It is changing day-to-day," he said. "If you know each day that they complete another version of bug removal and satisfaction on its functionality, it is closer to the finish line.
"They've been at that finish line a couple of times before, so in fairness to Nalcor it's appropriate to be guarded."
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