There has been a lot of complaining about Nova Scotia Power Inc.’s (NSPI) latest application for a rate increase and rightly so.
However, the groundswell of opposition is directed at rising salaries, bonuses, and a swanky party by executives, and does not address the root of the problem. Even the opposition parties in the Nova Scotia legislature got into the act as they repeatedly stood up in Question Period and railed against the NDP government and accused the Dexter government of being too cozy with Emera,
The only defence the NDP mounted was that it had taken the HST off home electricity. Time and time again, the NDP went back to this defence, looking like a boxer against the ropes, gloves held up over their face and absorbing punch after punch. The Liberals and the Tories were more than happy to deliver them, too, much to the delight of the angry mob that was watching.
While the NDP did remove the HST — and that move did provide immediate relief — it didn’t go far enough in addressing the short-term pain associated with the Renewable Electricity Plan that the NDP implemented in 2010. This plan was designed to get Nova Scotia Power off its dependence on coal and set a legislated target for 25 per cent renewable energy by 2015. This switch was a no-brainer and the NDP should be lauded for this.
What the NDP realized, but not all ratepayers realize, is that there is a short-term cost associated with this because building new infrastructure costs money.
Unfortunately, the prospect of stable rates in the future has not been enough to placate the growing discontent among ratepayers. If added infrastructure costs for renewables was the only cause for rate hikes, it would be easier to stomach — but it’s not. Another huge problem for Nova Scotia Power is their outdated blueprint based on burning coal, a commodity that has gone up in price because of a growing demand in China and other industrializing countries.
Meanwhile, there is a glut in the natural gas market — something that has existed for a few years now — and there hasn’t been a big enough shift away from coal to natural gas. Doing this would help reduce electricity rates, provide a better back-up for renewables, reduce emissions, and allow Nova Scotia Power to burn a made-in Nova Scotia fuel. While it can be risky to rely too much on one fuel source, clearly Nova Scotia Power needs to increase its ability to burn natural gas — and pronto.
Most of the coal Nova Scotia Power burns is imported and last year it generated 57 per cent of its electricity from coal. Meanwhile, natural gas generated only 20 per cent of electricity in Nova Scotia. Tufts Cove in Dartmouth is going flat out, but it’s the only thermal plant in the province capable of generating electricity by burning natural gas.
The Renewable Electricity Plan should have been introduced in tandem with a plan to boost the use of natural gas, but it wasn’t and this was a missed opportunity.
So, while the government can’t tell NSPI to lower rates and it can’t tell the Utility and Review Board to reject the latest application, it is not powerless to address rising power rates.
Just like it changed the rules of the game for NSPI to make it create more renewable electricity, the government could do so again and make it burn more natural gas. Many other jurisdictions have made a more rapid move away from coal to natural gas, but Nova Scotia is lagging behind.