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$1.5B Muskrat Falls Maritime Link needs more scrutiny

Advocates for Nova Scotia's ratepayers have been granted days to study a deal on the $1.5-billion Maritime Link project that took three years to draft

October 29, 2013  by Michael MacDonald THE CANADIAN PRESS

HALIFAX—Advocates for Nova Scotia’s consumers, small businesses and electricity ratepayers say they need more time to study a complex commercial agreement that deals with the proposed $1.5-billion Maritime Link project.

Nelson Blackburn, the province’s small business advocate, said the latest agreement between Nova Scotia energy company Emera Inc. and Nalcor Energy, Newfoundland and Labrador’s Crown energy company, requires closer scrutiny.

“We seem to be compressed to analyze this application,” he said. “It’s very important. … We’d like to have more time to explore it.”

The Maritime Link involves Emera’s plan to build a subsea cable that would link Nova Scotia with Newfoundland, allowing an Emera subsidiary to buy energy generated by the Muskrat Falls hydroelectric plant, which is under construction in Labrador.


Nova Scotia’s energy regulator, the Utility and Review Board, has said it will approve the project, but only if Emera meets a series of conditions that will ensure the development becomes the cheapest option for ratepayers.

Last week, Emera released a so-called compliance filing that Emera says meets all of the conditions outlined by the board in July.

Emera held a four-hour technical conference at a Halifax hotel to answer questions about the agreement. A three-day round of public hearings is slated for next week.

A lawyer for the province’s consumer advocate said more time is needed to study the deal, and the Nova Scotia Lower Power Rates Alliance—a recently formed citizens group—has formally asked for an extension from the regulator.

Alliance spokesman Todd McDonald said the board is expected to deliver its decision Wednesday.

“If we don’t (get the extension), then we have only two business days to submit evidence to a very complex document that is substantially different than the original application,” he said in an email.

“Emera and Nalcor had unlimited time to prepare for the first hearing and they took three years to prepare. They then had unlimited time to prepare their compliance filing. They are now asking ratepayers to hurry up because they think we should. It is ridiculous.”

Chris Huskilson, Emera’s CEO, said the hearings should wrap up soon because the company wants to make sure construction contracts can go ahead and that there are no complications with a federal loan guarantee that aims to save Newfoundland and Labrador and Nova Scotia more than $1 billion in borrowing costs for the Muskrat Falls project. The overall development is estimated to cost $7.7 billion.

“Each of the companies involved in the project are making major commitments here,” Huskilson said after the briefing. “We don’t want to do anything that would jeopardize the federal loan guarantee being available to customers.”

As for the commercial agreement, Blackburn said he is particularly concerned that it might not meet the board’s requirement that Emera secure a certain amount of market-priced surplus electricity from Nalcor.

“The deal doesn’t work unless we have adequate supply of surplus energy at market prices.” he said. “It’s the essence of the whole application.”

Huskilson said the section of the agreement that deals with surplus energy actually exceeds what the board asked for.

“There is plenty of energy available, especially in the early years,” he said. “I think it’s more likely that more energy will be available to Nova Scotia than less.”

During the technical conference, energy analysts and the advocates had dozens of questions for Nalcor and Emera about the surplus power arrangement.

“The … small business advocate is right in being concerned that the board’s requirement for surplus energy has not been met,” said McDonald.

“This new filing presents a ton of scenarios whereby ratepayers in Nova Scotia could end up with all of the expensive energy and very little of the surplus energy. … There are a lot of scenarios for Nova Scotia ratepayers that could turn this into a very bad deal.”

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