Nova Scotia Power calls for end to feuding with provincial government

Nova Scotia Power is calling for a meeting "as soon as possible" with the provincial government, saying a broken relationship threatens its ability to meet renewable energy targets — and its bottom line.

"We need to work closely with the provincial government, put our differences aside, work through the differences, whatever it takes," Nova Scotia Power president Peter Gregg said Friday.

"I do believe we have the same interests, but we've got to stop this fighting."

Gregg asked for the meeting in a Dec. 13 letter to the ministers of finance, environment and climate change and natural resources and renewables.

The company's call for a truce comes in the midst of a contentious regulatory hearing into its application for a 14 per cent power rate increase over two years.

Premier Tim Houston's office said Friday the government will decide in the new year whether it will meet with the utility.

"I will reiterate our government's position on power rates," spokesperson Catherine Klimek said in a statement. "We're committed to protecting ratepayers as best we can and ensure they have access to clean, reliable electricity at a fair price."

'Already difficult situation'

Gregg's blunt letter outlines Nova Scotia Power's objections to the conduct of the Houston government that includes Bill 212, the law that imposed a 1.8 per cent cap on non-fuel costs.

It was passed before the Nova Scotia Utility and Review Board had finished reviewing the evidence.

"We remain deeply concerned that political intervention in the regulatory process, lack of consultation with NSP on energy and climate policy and continued comments in the media not only highlight the lack of a productive working relationship, but they also risk further exacerbating an already difficult situation," Gregg wrote.

Bill 212 required the revenue generated by the increase to be spent only on upgrading the electrical grid and stops spending on renewable projects needed to transition off coal.

The company paused work on large-scale battery storage, a wind-power procurement and upgrading the grid connection with New Brunswick, a first step in the Atlantic Loop — a regional energy corridor.

"We are concerned that there is a disconnect between what the government would like to achieve in their climate plan and Bill 212 which restricts the investments the utility can make in order to help facilitate the achievement of the goals," he wrote.

Nova Scotia Power is supposed to close its coal-fired generation plants by 2030, when 80 per cent of its electricity must come from renewable sources.

"It doesn't seem achievable at this point," Gregg said. "I'm not confident we can reach that.

"Can I get myself to a place that we could ultimately do it? Yes. But again … we need to be shoulder to shoulder with the province on this."

Credit rating crash will cost up to $30M a year

Another source of friction is the credit rating downgrade triggered by the rate cap.

Nova Scotia Power says the company will pay up to $30 million more in higher interest payments annually once existing debt is refinanced.

"The NSP team made every effort to advise your government that the unprecedented interference into an independent regulatory process would result in the credit downgrade that has now happened," Gregg wrote.

The province is unapologetic, saying the company can take lower profits.

Gregg called that misleading since, like every other regulated utility, profits are set by a regulator to attract money needed for capital projects. He said Nova Scotia Power has spent $3.7 billion on its electrical system in the last 12 years.

"The expectation of a reasonable return for investors is what allows for the raising of capital at the lowest possible cost," Gregg wrote.

The province has shown no interest in peace. It accused the company of greed and incompetence this week in a closing submission in the rate case.