Nova Scotia government lashes out at Nova Scotia Power — again

The Houston government doubled down on its criticisms of Nova Scotia Power Wednesday in a scathing closing submission to regulators currently weighing a proposed 14 per cent electricity rate increase over two years.

The province used the filing to justify its imposition of a 1.8 per cent rate cap on non-fuel costs, accusing the company of gouging ratepayers while providing unreliable service.

The Nova Scotia Utility and Review Board is deciding on a proposed rate settlement reached between the company and representatives of major customer groups after the provincial government imposed the rate cap through Bill 212.

In its 19-page closing submission to the board, the Department of Natural Resources and Renewables said the company was "delinquent" in failing to adequately trim trees to keep fallen branches from taking out power lines during storms.

"The impact of NSP's failure to sufficiently invest in vegetation management was keenly felt by ratepayers following Hurricane Fiona, which struck the evening the [general rate application] hearing concluded. Thousands of Nova Scotians were left without power for days or weeks," the department said.

Nova Scotia Power has said the rate cap will leave it $70 million short of what it needs to run the utility and earn its guaranteed nine per cent rate of return.

The province accused the company of sacrificing ratepayers for profits.

"There is no reasonable justification to allow NSP to receive greater profits when Nova Scotians are facing significant inflationary pressures, and NSP is failing to deliver reliable service," the department said.

"During harsh economic times, it is unreasonable to impose further hardship on ratepayers to enhance corporate returns."

It also highlighted the failure of the Muskrat Falls hydro project in Labrador to deliver contracted amounts of hydro electricity, forcing Nova Scotia Power to buy higher-priced fuel to provide power.

"Ratepayers are being asked to pay for investments in failed or disappointing projects at the same time they face inflated costs for replacement fuels. Moreover, when these increased fuel costs are deferred, NSP again benefits from interest on fuel deferrals. NSP profits from poor investments at the same time ratepayers are forced to pay more for NSP's mistakes," the department said.

The department also repeated a call made by Premier Tim Houston to reject the settlement agreement reached between Nova Scotia Power and customer group representatives.

"The terms of the settlement agreement increase rates and contravene the purpose, spirit, and intent of Bill 212."

In her closing submission lawyer Nancy Rubin, representing large industrial customers, said the settlement accommodates the material impact of Bill 212 and "is reasonable, fair, equitable and in the best interest of ratepayers."

Limitations

Consumer advocate Bill Mahody said the deal imposes limits on some items Nova Scotia Power was seeking.

A proposed storm rider to pay for extreme weather was given a three-year term, turning it into a trial period. And a proposed decarbonization deferral account is limited to writing off Nova Scotia Power's fossil fuel plants.

"The Settlement Agreement represents the outcome of discussions among the vast majority of active participants in this matter, and it has the support of all ratepayer advocates," Mahody said in his submission.

"Further, the Settlement Agreement is comprehensive, addressing virtually all of the matters in contention before the Board."