Nova Scotia Power in the dark on Muskrat Falls delays after meeting with Nalcor
St. John's fact finding trip produced little information, regulators told
Nova Scotia Power officials went to Newfoundland and Labrador last month in an attempt to find out more information about delays plaguing the Muskrat Falls hydro project, but came back still in the dark.
Wayne O'Connor, the vice-president of corporate strategy and planning at Nova Scotia Power, told regulators in Halifax on Monday that he and two other company officials were in St. John's on May 31 to meet with Nalcor, the provincial Crown corporation building the troubled $7.6 billion hydroelectric project.
"We had two purposes: to get an update on where they were on construction and timing but equally important, spent most of our time on commercial opportunities once the Maritime Link is available and should there be a delay on the Nova Scotia block," O'Connor told the Nova Scotia Utility and Review Board.
Update in June
The Maritime Link is the subsea cable being built by NSP Maritime Link Inc. — a sister company to Nova Scotia Power — that will carry electricity from Newfoundland to Cape Breton across the Cabot Strait.
The Nova Scotia block refers to 20 per cent of the electricity from Muskrat Falls that Nova Scotia Power has contracted to buy over 35 years.
Nalcor officials gave the Nova Scotia Power team no information beyond what is already known — that an update on the delay and cost is expected in June.
"Even that might slip," O'Connor told Utility and Review Board member Roland Deveau.
"Once that is known, it will be made known publicly and we will find out through that process. But in the interim they just said, 'We're working on it. We can give you no other details. You'll have to wait until that report comes out.'"
The uncertainty over the arrival of Muskrat Falls electricity has hung over a regulatory review of a proposed 4.5 per cent rate hike over three years to cover fuel costs for Nova Scotia Power fuel costs.
The Nova Scotia utility has estimated the rate hike will add about $2 a month to the average residential bill.
Mandated by 'rate stability'
Last week, Nova Scotia Power and lawyers representing various customers groups agreed to the three-year rate hike, which was mandated by the so-called "rate stability" legislation passed by the Nova Scotia government.
In documents submitted for the hearing, Nova Scotia Power has now pushed back the date when it expects to receive electricity from Muskrat Falls. It now expects delivery sometime in early 2019.
John Merrick, a consumer advocate, says delays in the receipt of power from Muskrat Falls will require Nova Scotia Power to incur costs to get replacement energy.
'Gives the appearance of ratepayers having to pay twice'
If electricity arrives in April 2019, for example, Merrick said that delay would add more than $80 million in costs.
"Because Nova Scotia Power has to incur costs to replace the missing power in addition to paying the Maritime Link Assessment, it gives the appearance of ratepayers having to pay twice to obtain power for the period in question,'" Merrick said.
The utility says the electricity will eventually arrive and customers will get what they are paying for.
On Monday, regulators reserved their decision on the rate increase application.