Nova Scotia Power

Nova Scotia Power Inc.

Company type	Subsidiary
Industry	Energy
Predecessor	Nova Scotia Power Commission, Nova Scotia Light and Power Ltd.
Founded	(1919 (1919))
Headquarters	Halifax, Nova Scotia , Canada
Area served	Nova Scotia
Key people	Robert Bennett, President & CEO
Products	Electricity
Owner	Publicly traded (TSE, MSE)
Number of employees	1900 (approx.)
Parent	Emera Inc.
Website	www.nspower.ca

Nova Scotia Power Inc. (TSX: NSI.PR.D) is a power generating and delivery company in Nova Scotia. It is privately owned by Emera (TSX: EMA) and regulated by the provincial government via the Nova Scotia Utility and Review Board (NSUARB).

History

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 and/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.

In 1974, the Nova Scotia Power Commission acquired Nova Scotia Light and Power Ltd., a private company, to form the Nova Scotia Power Corporation (NSPC).

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.

NB uncertainty, Eastern Interconnection "loop"

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. 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 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 and/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 being missed, and questions raised about its cost. [2]. 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. [3]. This strategy was already being actively pursued by NS's six small town utilities, see below.

Grid investment and maintenance issue

In the wake of major winter storms in 2004, 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.

NS Power grid reliability as 2009 election issue

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."

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, 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.

Conservation programs

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."

At about the same time, Conserve Nova Scotia was formed as a supervisory body to encourage such programs and execute the province's energy strategy.

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.

In June 2009, NSP proposed a fixed charge to pay for conservation programs to raise $23M it could spend on reducing electricity demand. 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.

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

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. 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, 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. 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.

Commercial/industrial programs

Conservation programs for large commercial and industrial electricity users were the first to be launched by NSPI, in May 2008. Although electric utilities across Canada commonly administer similar programs, lobbyists accused NSP of potential conflicts of interest, 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.

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.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. [9][10][11].

Grid operations and maintenance; related communications services

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 [12] 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 as being more advanced than the many other utilities it worked with. NS Power by contrast had no such over-arching plan and fell under increasing criticism especially during the 2009 election for that.

Smart grid upgrade

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) [13], 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 [14] and began offering home monitoring [15] 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..

Advocates have urged small NS utilities to follow the "Chattanooga model" [16][17][18] in which universal gigabit Internet services are rolled out [19] of an electric utility [20]. 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[21]), and of XCel Energy in Colorado, which resulted in a complete loss of mandate to a new city utility [22][23].

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.[24], 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

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. It operates a variety of generating stations using various sources of energy including coal, natural gas and renewables:

Thermal

Coal

• Lingan Generating Station
• Point Aconi Generating Station
• Point Tupper Generating Station
• Trenton Generating Station

Oil/natural gas

• Tuft's Cove Generating Station

Combustion turbines

• Burnside Combustion Turbine
• Tusket Combustion Turbine
• Victoria Junction Combustion Turbine

Tidal

Annapolis Royal Generating Station

• Annapolis Royal Generating Station

Wind

• Grand Etang
• Little Brook
• Nutby Mountain
• Digby Neck

Hydroelectric

• Avon River System
• Bear River System
• Black River System
• Dickey Brook
• Fall River
• Lequille
• Mersey System
• Nictaux Falls
• Paradise
• St. Margaret's Bay System
• Sheet Harbour System
• Roseway
• Tusket Falls
• Wreck Cove

Purchased power

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

Industrial

• Bowater Mersey Paper Company Limited (Brooklyn)
• Intertape Polymer Inc. (Truro
• Michelin (Bridgewater, Granton, Waterville)
• Northern Pulp Nova Scotia (Abercrombie)
• NewPage (Point Tupper - currently closed)

Municipal utilities

There are six municipal utilities currently operating in the province. The majority of these utilities purchase electricity through an interconnection with NSP, however, some may 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 (Town of Canso)
• Lunenburg Electric Utility (Town of Lunenburg)
• Mahone Bay Electric Utility (Town of Mahone Bay)
• Riverport Electric Light Commission (Village of Riverport)

Public opinion

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. 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. 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.

External links

• History of Electric Companies in Nova Scotia
• Nova Scotia Power
• NS Power Conservation and Energy Efficiency Programs
• Emera Inc
• Riverport Electric Light Commission