Read the fine print in 'unreasonable' NS Power contract, says lawyer
Mark Tipperman planned to install solar panels at his home, but refused to sign 'one-sided' contract
Mark Tipperman was hoping to do something good for the environment when he looked at installing solar power panels on his Gaspereau home in 2015 through Nova Scotia Power's net-metering program. But there was a problem.
Under net metering, a homeowner uses renewable energy to meet their own electricity needs. If they produce more, the extra energy is put on Nova Scotia Power's grid and the homeowner is credited for that. If they use more energy than they produce, they are billed for the additional energy.
Tipperman met with a company that did renewable energy installations for homes and he put down a $1,000 non-refundable deposit for a solar project that was expected to cost around $20,000.
Part of getting set up with Nova Scotia Power's net-metering program involves signing a nine-page legal agreement. That's when the problems started for Tipperman.
A lawyer with almost 45 years of experience practising commercial real estate, including negotiating contracts, leases and legal agreements, he said he couldn't sign the contract.
"There were a number of provisions that were very one-sided," said Tipperman.
He said he raised his concerns with Nova Scotia Power and even spoke to a company lawyer about them, but was told no significant changes would be made. As a result, he decided not to move ahead with the project.
"I wasn't going to sign a contract that was, frankly, unreasonable," said Tipperman.
Legal agreement not vetted by UARB
One of his chief concerns is that the agreement wasn't approved by the Utility and Review Board. While the framework for Nova Scotia Power's net-metering program falls under the board's authority, the legal agreement doesn't have to be approved by the board.
"They [Nova Scotia Power] shouldn't be employing a contract with consumers that hasn't been vetted and basically made reasonable by the regulatory authority, so I think there's a hole there," said Tipperman.
As well, Tipperman is concerned that Nova Scotia Power can terminate the agreement within 30 days of providing notice. Customers also have the right to terminate the agreement during that time.
He said because the net-metering program involves a major capital expense that will take years to pay off, it doesn't make sense to sign up "where there's no clear contractual obligation on the part of the utility company to keep the agreement in effect for the life of the equipment."
Nova Scotia Power defends contract
In a statement, Nova Scotia Power spokesperson Tiffany Chase said the company would only seek to end the agreement if the customer failed to produce electricity for a year or failed to meet the interconnection guidelines, "thereby risking the safety of the electricity system, public safety or safety of our employees."
She said the latter situation has never happened and the company would first work with the client to fix the safety issue. Disconnection would be a last resort.
Another concern for Tipperman revolves around risk. As part of the agreement, the customer agrees to assume certain risks, but also agrees to indemnify Nova Scotia Power. He said this isn't balanced.
Chase defended the wording.
"It's very similar to agreements we have in place with other independent power producers to ensure any service connections to our system meet our safety and reliability requirements, ultimately protecting both the individual customer and customers at large," she said.
A quarrel over alternative dispute resolution
Under the agreement, if a dispute between the customer and Nova Scotia Power can't be resolved, the dispute may be referred to binding arbitration by either party.
Tipperman said he doesn't think that's a good option for consumers.
"It's expensive and you don't necessarily get a fair shake, and you certainly don't get a jury, and you certainly don't get the chance to get a full-blown appeal of the issues that were decided by the arbitrator," he said.
Under the province's Commercial Arbitration Act, an alternative form of dispute resolution such as mediation or conciliation can be used if both parties agree.
Chase said that depending on the nature of the dispute, Nova Scotia Power would consider alternatives to binding arbitration. As well, she noted there's a dispute resolution officer who resolves customer concerns, and the person isn't employed by Nova Scotia Power or the Utility and Review Board.
'I'd seriously recommend going to a lawyer'
As a lawyer, Tipperman said he can't advise anyone who isn't a client.
"As a general educational point, read the agreement carefully and I'd seriously recommend going to a lawyer that does look at contracts on a regular basis to see whether it's something that should be signed," he said.