Nova Scotia Power

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Nova Scotia Power Inc.
Type Subsidiary
Industry Energy
Predecessor(s) Nova Scotia Power Commission, Nova Scotia Light and Power Company, Limited
Founded (1919 (1919))
Headquarters Halifax, Nova Scotia, Canada
Area served Nova Scotia
Key people Robert Bennett, President & CEO[1]
Products Electricity
Owner(s) Publicly traded (TSE, MSE)
Employees 1900 (approx.)
Parent Emera Inc.
Website www.nspower.ca

Nova Scotia Power Inc. (TSXNSI.PR.D) is a power generating and delivery company in Nova Scotia. It is privately owned by Emera (TSXEMA) and regulated by the provincial government via the Nova Scotia Utility and Review Board (NSUARB).[2] Nova Scotia Power Inc provides electricity to 490,000 residential, commercial and industrial customers in Nova Scotia.[3]

History[edit]

The Nova Scotia Power Commission was formed in 1919 by the provincial government, following the lead of several other Canadian provinces in establishing Crown corporation electrical utilities. The commission constructed and opened its first hydro plant at Tantallon the following year.

Throughout the 1920s-1960s the commission grew as private and municipal owned hydro plants and electrical utilities went bankrupt or sold their assets. In 1960, Nova Scotia was connected to the New Brunswick Power Corporation in the first electrical inter-connection between provinces in Canada.

The commission underwent unprecedented expansion during the late 1960s when five new thermal generating stations were constructed to meet the growing residential and industrial demand in the province.

On January 27, 1972, the Government of Nova Scotia acquired Nova Scotia Light and Power Company, Limited (NSLP), an investor-owned utility, leasing its assets to the renamed Nova Scotia Power Corporation (NSPC).[4]

In 1984, NSPC opened the world's first tidal power generating station on the Annapolis River at Annapolis Royal. This technology, similar to hydroelectric dams, did not become globally widespread.

In 1992, NSPC was privatized by the provincial government of Premier Donald Cameron in what was then the largest private equity transaction in Canadian history. Cameron's government had been under heavy pressure to control provincial deficits and debt servicing resulting from his predecessor administrations, thus the controversial decision to sell the Crown corporation. This privatization created Nova Scotia Power Incorporated (NSPI).

On December 2, 1998, NSPI shareholders voted to restructure the company to create a holding company which would be shareholder-owned, with the regulated utility being a wholly owned subsidiary of the holding company. On December 9, 1998, NSPI received approval to establish NS Power Holdings Incorporated and NSPI shareholders exchanged their shares in NSPI for shares in NS Power Holdings Inc. on a one-to-one basis on January 1, 1999. Common shares in NS Power Holdings Inc. began trading on the Toronto Stock Exchange and Montreal Stock Exchange on January 6, 1999. The NS Power Holdings Inc. name was changed to Emera Incorporated on July 17, 2000.

In 2001, Emera purchased the Bangor Hydro Electric Company of Bangor, Maine; Emera was the first Canadian company to purchase an American utility.[citation needed]

In the news[edit]

In 2012 Nova Scotia Power (NSP) was the subject of an audit commissioned by the Utility and Review Board, and conducted by Liberty Consulting Group. This audit alleges that NSP overcharged its customers to the tune of $22 million because it paid too much for fuel over a two-year period. In August 2012 a hearing was held to determine if NSP could keep blacked out sections of the audit secret. The matter has been put on hold until later this year. The current Premier of Nova Scotia, Darrell Dexter, has said that customers of NSP will get their money returned if the review board determines that it was not spent properly.

This is not the first instance of public dissatisfaction with NSP. Over the past 10 years the power rates have perpetually increased to the point where some estimates suggest that they are the highest in Canada. The continued rate hikes have caused public outcry and calls for the government to intervene on behalf of the people. The most vocal cry is for the company to once again fall under the control of the Nova Scotia government. With an election in the future some parties have stated that they will address the matter if elected.

Public opinion[edit]

There have been six rate increases over the last decade, with a seventh increase currently proposed. These rate increases have been proposed to cover investments in renewable energy, grid maintenance, environmental efficiencies in its coal generating stations and increased costs of purchasing cleaner coal.[5] Infrastructure updating has been an ongoing issue since privatization leading the utility to fall behind its neighbours in New Brunswick and Newfoundland in creating a "smart grid" to allow more competition into the market, ability to offer other services and efficient method for transmitting energy.[6] Given the monopoly held by the utility on providing power, the rate increases are seen as a way to increase profit share to its stockholders at the cost of businesses and private ratepayers in the region. The utilities largest energy customer, NewPage in Cape Breton has recently laid off workers citing inability to make a profit in the current environment, specifically citing the constant power rate increases as the number one concern.[7]

NB uncertainty, Eastern Interconnection "loop"[edit]

Concerns were raised by the Nova Scotia government regarding the future of Nova Scotia Power and the province's renewable energy strategy in the aftermath of a tentative C$ 4.8 billion deal for the sale of most assets of NB Power to Hydro-Québec, on October 29, 2009. The provincial government was concerned that the deal could affect its plan to develop renewable energy sources for exports to New England in competition with Quebec's publicly owned utility, as all existing transmission routes were through New Brunswick.[8] The deal was rescinded due to public pressure in NB, first dropped back to a sale of a hydroelectric dam, then dropped entirely. The Shawn Graham government fell partly as a result of the failure of these deals and the lack of public consultation prior to pursuing them.

In partial response to concerns about being cut off from the New England market, NS Premier Darrell Dexter began to pursue a "loop" strategy for Nova Scotia's electric interconnection, connecting Muskrat Falls in Labrador to Cape Breton, thence to mainland Nova Scotia and, via subsea DC transmission cable, New England. This would connect NL, NS and potentially PEI with its peers in FERC Eastern Interconnection directly without relying on Quebec or New Brunswick. Thus, any future deal to extend Quebec's ownership or Quebec's interconnection could not prevent dealings between peers in the Eastern Interconnection. As the deal would also provide access to long term guaranteed rates for hydroelectric power, it served the longstanding policy goal of removing dependence on coal power within NS.

However, as of December 2011 deadlines to negotiate this deal were missed, and questions raised about its cost.[9] NS was coming under pressure even from ecological advocates to switch to Quebec hydro-electric power quickly rather than wait for an expensive and questionable dam.[10] This strategy was already being actively pursued by NS's six small town utilities, see below.

Grid investment and maintenance issue[edit]

In the wake of major winter storms in 2004,[11] NS Power came under increasing criticism from the Union of Nova Scotia Municipalities, energy-oriented public interest groups, and provincial political parties for a perceived lack of investment in the monitoring, preventive maintenance and instrumenting of its electric grid. A study was eventually commissioned from SNC-Lavalin to explore a "regional system operator" to relieve NS Power of the control of the grid itself.[12]

NS Power grid reliability as 2009 election issue[edit]

Criticisms had intensified meanwhile; NS Power performance was an explicit campaign issue in the Nova Scotia general election, 2009, notably from Liberal leader Stephen McNeil:

"...they take $100M out of NS ... put it in California, Maine... don't re-invest... in the infrastructure of this province." [13]

Incumbent Premier Rodney MacDonald agreed that:

"...maintenance issues have caused a lot of problems, a lot of outages... when there's no need. If the proper maintenance had been done, people wouldn't be faced with that situation, and it's unacceptable."

When NSP president Rob Bennett endorsed a New Democratic Party campaign plank to remove provincial sales tax from electricity bills,[14] McNeil cited it as a reason to oppose the NDP, and accused NSP of seeking to raise rates to fill the gap, then portraying this as an overall reduction in rates due to the tax cut.[15]

Conservation programs[edit]

As NS implemented its climate and demand side management strategies, lobbyists question whether the utility could be trusted to administer a province-wide conservation program designed to prevent having to build any new large power plant. Its "integrated resource plan" of 2007 "indicated that energy conservation is an important element to meet the future electricity needs of Nova Scotia. NS Power began implementing Energy Efficiency & Conservation programs (EEC) for customers in 2008."[16]

In May 2009, the Nova Scotia government sought also to establish an independent body to oversee conservation programs, curtailed by the call of the 2009 election. It eventually formed Conserve Nova Scotia (now Efficiency Nova Scotia or ENS) as a supervisory body to encourage such programs and execute the province's energy strategy.

In June 2009, NSP proposed a fixed charge to pay for conservation programs to raise $23M it could spend on reducing electricity demand.[17] According to Alan Richardson, VP of commercial operations, 80 million kilowatt-hours and 60,000 tonnes of CO2 equivalent would be removed, and ordinary customers would see paybacks for the fixed fees within three years due to fuel savings alone. This proposal was rejected as a conflict of interest as NSP vends watts (see especially Town utilities section below), ENS was instituted in 2010 and became the dominant provider of conservation services.

For 2012 ENS claimed that it "helped Nova Scotians save $100 million in electricity costs. Energy savings totalled 141.8 million kilowatt hours, enough electricity to take 14,000 average homes off the grid" on expenditures of $43.7 million - a total cost under $0.31 per kilowatt hour for permanent savings that recur year over year. (the relative cost of electricity generated by different sources suggests that this figure is favourable to solar thermal construction, but the avoided emissions, transmission, distribution, billing and outage provision costs, plus averted shorts and fires, are not part of the calculation, so this underestimates the value of conservation measures. Also, the conservation savings recur forever, whereas generating plants eventually break down and no longer generate electricity.). The cash-on-cash return on investment province-wide is well over 100% for the entire history of Efficiency Nova Scotia.[18] This significantly exceeds the cash benefit promised by the NSP proposal while the watts saved are similar.

For 2013 "the typical residential customer" paid $3.85/month versus $4.40/month in 2012, and $4.24 in 2014. Meanwhile, "medium industrial" average payments dropped from over $200/month in 2012 to just over $100 in 2013 and 2014.[18] NSP as of 2012 continued to publicly advocate itself as a neutral conservation measure vendor which could both vend watts and measures to save watts, CEO Rob Bennett publicly suggesting repeatedly that it was possible for the organization to firewall its supply and savings operations to avoid conflicts of interest.

Town utilities' alternative strategy: Use no coal, not less coal, focus on peak levelling[edit]

While debates on Nova Scotia's electricity industry usually focus on Nova Scotia Power as a vertically integrated near-monopoly, there are six communities entirely outside its distribution area, all of which have the authority to buy wholesale from other sources. These cooperate as the Municipal Electric Utilities of Nova Scotia (MEUNS). These are increasingly active advocates of community economic development, and have consistently opposed granting NS Power more control of the province's electric rate structure and regulatory system.

Most recently, in 2012, the MEUNS successfully opposed (at the Nova Scotia Utility and Review Board) charges of $28–32 million as a one-time "exit fee" for leaving NSP's transmission system.[19] Given only about 8000 people are served by MEUNS this could have amounted to over $4000 per person (more per subscriber). This freed the municipal utilities to seek suppliers other than NS Power.

In 2010, Chair of NS Union of Municipalities Bill Zimmerman, critics of NSP and the MEUNS took issue with a model under which the utility managed programs that would reduce the revenue of town-owned utilities, arguing that NSP would be in conflict of interest.[citation needed] A particular concern was that NSP would accelerate conservation programs in the six MEUNS towns (Lunenburg, Mahone Bay, Riverport, Canso, Berwick and Antigonish), reducing town revenues, while lagging in its own service area to preserve its own revenues, possibly as part of a takeover strategy to bankrupt small utilities. The proposal for a small $12/year charge and was approved by the regulator.

The towns have also been consistent advocates of relief rates for basic usage by poor tenants who are not able to upgrade baseboard air heaters or unjacketed water heaters on their own, at least as an interim measure. Thus they objected to any fixed charge, even for laudable purposes, which no subscriber (regardless of how poor or diligent) can reduce by their own action.

As the conservation charge was intended to reduce emissions, as of December 2011 MEUNS was pursuing a strategy of moving to all renewables - either Quebec hydro power as the province as a whole had been advised [4] or more local wind power. Mayors of Lunenburg [5] and Mahone Bay [6][7] often publicly comment on these goals. Mahone Bay rejected a wind project as being insufficient to totally remove its dependence on NS Power, choosing instead to retain combined buying power with its five fellow small utilities.

Because it reduces emissions to near zero, any such move by any utility to universal renewables would justify an entirely separate conservation strategy for that utility, most likely one based more on smart grids, storage and peak levelling, all of which are easier to deploy in small service areas, and provide other advantages (such as secure ubiquitous communications) to residents. Peak levelling strategies had been deployed actively since at least 2007 [8] in part due to the relatively greater exposure of small utilities to peak wholesale rates when they cannot meet demand with contracted power at flat rates.

In 2013 the Town of Lunenburg Electric Utility (TLEU) initiated a smart meter pilot project involving most of the town's largest employers. [9] NSP had never initiated any such pilot project and as of April 2013 had not responded with any proposals of its own, further differentiating the strategies of the smaller publicly owned utilities and the private province-wide monopoly. As do most small electric utilities deploying smart grid devices, Lunenburg built a municipal network in effective competition with local telecom companies to support its metering pilot and tourism businesses.

Commercial/industrial programs[edit]

Conservation programs for large commercial and industrial electricity users were the first to be launched by NSPI, in May 2008.[20] Although electric utilities across Canada commonly administer similar programs,[21][22][23] lobbyists accused NSP of potential conflicts of interest,[citation needed] being both the vendor of electricity and also administrator of programs that, if successful, would result in selling less energy.

The perceived conflict appears not to have been an impediment to performance, as NSP's energy conservation efforts have been very successful, with 2008-09 programs substantially exceeding energy savings targets (per third party verification) and remaining below budget.[24]

Richardson claimed that $1/month would cover the cost of the conservation programs.

"...the company seems to want to set up automatic price adjustment mechanism to operate yearly, with annual programs cranking up prices." Merrick proposed that "cost of equipment, facilities, structure, staffing" must be recovered "through application for higher rates" and that NSP shareholders not ratepayers must bear the risk of company decisions of what to invest in.[25]Template:Citation incomplete

As of December 2011 objections to the conservation programs have been muted, especially in light of peer reviewed medical studies showing that coal extraction and burning costs the US $345–500 billion/year. [10][11][12].

Grid operations and maintenance; related communications services[edit]

By 2009, the publicly owned electrical utilities in the neighbouring provinces of New Brunswick and Newfoundland and Labrador (NB Power and Newfoundland and Labrador Hydro) had significantly upgraded their facilities to so-called "smart grids" with 100-megabit networks. These supported real time testing [13] and, in Newfoundland and Labrador, let that province's utility also deliver voice and data services to customers. Aliant XWave, IT contractor to both, touted its achievements in these other Atlantic provinces[26] as being more advanced than the many other utilities it worked with. NS Power, by contrast, had no such overarching plan and fell under increasing criticism, especially during the 2009 election for that.

Smart grid upgrade[edit]

As of 2011, Emera, owner of NS Power, had rolled out power line communication-based "smart meters" to 107,000 subscribers (192,000 people) in Bangor Hydro (of Bangor, Maine) [14], having ruled out the wireless meter option in favor of gaining experience with powerline systems. These were seen as a major gateway into homes by Qualcomm Atheros, Apple, Verizon and others. Verizon in particular had strengthened its relationships with power utilities [15] and began offering home monitoring [16] while it slowed down deployment of FTTH, possibly in favor of a future P1901 solution along the lines of Qualcomm Atheros' Hy-Fi offerings.

It was unclear what NS Power proposed to do to meet smart grid standards in its distribution network. Most of the attention to grid issues in the province focused on transmission (the proposed "loop" to Labrador) and rates vs. reliability. Several models competed.

In Newfoundland, under Danny Williams, a former cable TV baron, the communications capacity added to the grid was far in excess of what was required for monitoring purposes, suggesting that charges for voice and data services (a business Williams knew intimately) could pay for grid upgrades. In New Brunswick, a more modest upgrade was accounted and apparently paid for by maintenance cost savings alone. These models were cited as alternatives to fixed "smart meter" and "conservation" fees per customer in the June 2009 NSP hearings, by critics of NSP in the last days of the 2009 election campaign.[citation needed]

Advocates have urged small NS utilities to follow the "Chattanooga model" [17][18][19] in which universal gigabit Internet services are rolled out [20] of an electric utility [21]. In Chattanooga, 170,000 homes and businesses were connected over six counties in a 600 square mile area, to...

"make its investment ensure far greater advantages than simply automating meter readings... that not only benefited the utility, but more importantly delivered ever-growing value to the community by improving quality of life and opening up economic opportunities....the city’s decision to simultaneously deploy the country’s most powerful fiber-optic network set a new standard for how a utility can lead the way toward a bright economic future while improving power quality, reliability, customer service and energy efficiency. "

This model relies on communications revenues to subsidize power-related service upgrades. As of December 2011, this model had succeeded better than the smart grid pilots of PG&E in California (which resulted in the failure of Proposition 16 to raise the level of support to establish a Community Choice Aggregator and directly to formation of one in Marin County[22]), and of XCel Energy in Colorado, which resulted in a complete loss of mandate to a new city utility [23][24].

In Nova Scotia, however, there is no clear path to forming a new small utility regardless of poor service by an incumbent provider, so the ability of communities in NSPI's service areas to withdraw may be limited. The small utilities represented by MEUNS are better positioned to roll out additional services, especially as they own most utility poles in their districts and serve many contiguous urban customers. Some MEUNS boards of trade publicly endorsed the Chattanooga model, in part because it dovetailed well with other goals such as that of Lunenburg to bury its electrical cables in its UNESCO World Heritage "Old Town", and that of Riverport to revive a declining community, and of all three South Shore communities to remain competitive with Bridgewater in broadband Internet. As of December 2011, Bell Aliant had refused repeated requests by Lunenburg to guarantee simultaneous extension of its FTTH service.[25], leaving the town in a position to consider rival services/proposals.

As of December 2011, neither the provincial government nor NSP had commented on the implications of the Bangor rollout or MEUNS moves or technology advancements. NS Renewable Electricity Plan and Broadband for Rural Nova Scotia initiative have no provision for utilities' distribution upgrades.

Generating facilities[edit]

Lingan Generating Station
Point Tupper Generating Station.

NSPI has a generating capacity of 2,368 megawatts and produces 13,000 gigawatt hours of electricity each year.[27] It operates a variety of generating stations using various sources of energy including coal, natural gas and renewables:

Thermal[edit]

Coal[edit]

Oil/natural gas[edit]

Combustion turbines[edit]

Tidal[edit]

Annapolis Royal Generating Station

Wind[edit]

Hydroelectric[edit]

Purchased power[edit]

NSPI also purchases energy from independent power producers who generate electricity using wind, hydro, and biomass (including landfill gas). Notable examples include wind farms at Pubnico Point, Lingan, and Dalhousie Mountain.

Major customers[edit]

Provincial[edit]

  • The vast majority of residents of Nova Scotia are direct retail customers of NS Power's distribution network, receiving bills directly from NSP.

Industrial[edit]

Municipal utilities[edit]

There are six municipal utilities currently operating in the province. These cooperate as an association called the Municipal Electric Utilities of Nova Scotia (MEUNS). Together, they serve under 15,000 people, or about 2% of the provincial population. The majority of these utilities purchase electricity through an interconnection with NSP, however, some such as the Berwick Electric Light Commission, have supplementary generating assets such as small hydro stations:

  • Antigonish Electric Utility (Town of Antigonish)
  • Berwick Electric Light Commission (Town of Berwick)
  • Canso Electric Light Commission (former Town of Canso)
  • Lunenburg Electric Utility (Town of Lunenburg)
  • Mahone Bay Electric Utility (Town of Mahone Bay)
  • Riverport Electric Light Commission (Village of Riverport)

Supply "monopoly" issue[edit]

A standing conflict between NSP and the MEUNS was the terms by which small utilities could entirely leave NSP's system. In late 2012 the Nova Scotia Utility and Review Board (NSUARB) ruled that they could buy their power from suppliers not affiliated with NS Power without paying a penalty for leaving the system. Since 2000, NSP Inc. had a "Load Retention Rate" available to customers who are considering an alternate supply of at least 2,000 kVA or 1,800 kW.[30] In general, small municipal utilities are required to separately apply to approve capital expenses or change rates when NSP Inc. changes its wholesale rates.[31]

Notes[edit]

  1. ^ NSP Inc., Executive team
  2. ^ "Electricity". NUARB website. Nova Scotia Utility and Review Board. Retrieved 10 February 2011. 
  3. ^ "KUBRA And Nova Scotia Power Expand Outsourcing Contract". Mississauga, ON: KUBRA. 7 Jan 7, 2013. 
  4. ^ Nova Scotia Light and Power Company, Limited: Annual Report, 1972
  5. ^ "CBC Nova Scotia". CBC News. April 20, 2011. 
  6. ^ "Ernst & young". Ernst & young. August 30, 2011. 
  7. ^ "Chronicle Herald". Chronicle Herald. August 24, 2011. 
  8. ^ Canadian Broadcasting Corporation (29 October 2009). "NB Power deal raises concerns in N.S.". CBC News. Retrieved 2009-11-19. 
  9. ^ [1]
  10. ^ [2]
  11. ^ Nova Scotia premier calls for independent review of power grid as thousands sit in the dark, November 26, 2004
  12. ^ Province explores options for cleaner power grid, February 2009
  13. ^ Nova Scotia provincial general election leaders' televised debate, June 2, 2009
  14. ^ Paul McLeod,"NS: Liberals blast Nova Scotia Power for supporting NDP", Metro Halifax, June 3, 2009
  15. ^ first Nova Scotia provincial general election leaders' televised debate, May 2009
  16. ^ NSP Inc., Conservation and Energy Efficiency Plan (About page)
  17. ^ NS Power seeks $23M for conservation program
  18. ^ a b Joann Alberstat (2012-05-29). "Efficiency N.S.: It's costing more money to save on power". Chroncicle Herald. 
  19. ^ Joann Alberstat (2012-09-07). "Board nixes NSP exit fee plan". Chroncicle Herald. 
  20. ^ Nova Scotia Power launches new energy efficiency initiative
  21. ^ BC Hydro PowerSmart
  22. ^ Manitoba Hydro PowerSmart
  23. ^ Hydro Quebec Energy Wise
  24. ^ NS Power customers save money, electricity through conservation and efficiency programs [3]
  25. ^ CBC Mainstreet Halifax, June 3, 2009
  26. ^ XWave
  27. ^ "Quick facts about Nova Scotia Power". NSPI. Retrieved 2009-09-01. 
  28. ^ "Chester approves Nova Scotia's largest wind farm". CBCnews website. CBC. 2013-03-15. 
  29. ^ Beswick, Aaron (31 October 2013). "Power starts in N.S.forests". Chronicle Herald. Retrieved 31 October 2013. 
  30. ^ NSUARB
  31. ^ NSUARB

External links[edit]