Canadian Manufacturing

Emera to satisfy conditions, proceed with Muskrat Falls link

Emera would have to ensure that Nova Scotians had access to the best price for surplus electricity based on market conditions.

October 21, 2013  by Michael MacDonald THE CANADIAN PRESS

HALIFAX—Nova Scotia energy company Emera Inc. filed a proposal Monday that it says satisfies all conditions of a regulatory decision that tentatively sanctioned construction of the company’s $1.5-billion Maritime Link.

The project involves building a subsea cable that would link Nova Scotia with Newfoundland, allowing Nova Scotia’s electric utility to buy green energy generated by the Muskrat Falls hydroelectric plant, which is under construction in Labrador.

Newfoundland and Labrador’s Crown-owned utility, Nalcor Energy, has a 35-year deal with Emera to supply Nova Scotia with 20 per cent of the energy from Muskrat Falls in exchange for paying 20 per cent of the costs of the $7.7-billion project.

However, opponents of the deal have questioned how much it would cost Emera to buy energy in excess of the 20-per-cent block for which it has already negotiated an annual price.


In July, the Nova Scotia Utility and Review Board said Emera would have to ensure that Nova Scotians had access to the best price for surplus electricity based on market conditions.

In its report, the regulator concluded that if that condition was met, the Maritime Link would represent the cheapest energy solution for Nova Scotia _ but only by a narrow margin.

Newfoundland and Labrador Premier Kathy Dunderdale has said her government is willing to sell surplus electricity to Nova Scotia unless the power is needed in Labrador.

But critics said that commitment had to be put in writing.

Chris Huskilson, president and CEO of Emera, issued a statement Monday saying the company has met that key condition through a commercial agreement with Nalcor.

According to Emera’s filing with the board, the so-called Energy Access Agreement “provides commercial assurance that (Emera) will be the first potential Nalcor customer to have access to market-priced energy that Nalcor has available for export.”

The agreement is subject to the board’s approval.

A spokeswoman for the board says it will seek input from interested parties, though it remains unclear whether that will involve public hearings or written submissions.

Kyley Harris, a spokesman for incoming Nova Scotia premier Stephen McNeil, said neither McNeil nor energy critic Andrew Younger would comment on the agreement until after the premier and cabinet are sworn in Tuesday.

Harris said McNeil has maintained that the conditions previously outlined by the board would have to be met before he would support the project.

Ed Martin, CEO of Nalcor, said the access agreement ensures a competitive price for excess power.

“It’s a win for customers in both provinces and makes a great project better,” he said in a statement.

Nalcor has agreed to provide monthly forecasts of the volume of energy it can make available to Nova Scotia.

The agreement extends to 2041. Emera and Nalcor Energy are aiming to have power flowing from Muskrat Falls in 2017.

During hearings earlier this year, consumer and small business advocates in Nova Scotia as well as an alliance of industrial customers questioned whether the Maritime Link would benefit electricity customers, who would foot the bill for the project.

Opponents also doubted assertions from Emera and Premier Darrell Dexter that the project would stabilize electricity rates in the future.

John Merrick, Nova Scotia’s consumer advocate, has said that the guaranteed block of power for Nova Scotia is expensive because it is based on covering Emera’s costs.

On Monday, Merrick said he had yet to complete his analysis of Emera’s filing.

“In the next couple of days, you will see a more focused evaluation by not only ourselves but by the small business advocate and other interveners involved in the hearings,” he said in an interview.

“The more substantive positions as to whether this is good or bad for ratepayers, it’s probably too early to have that coming out yet.”

A spokesman for Nova Scotia’s Energy Department said the NDP government would not be issuing any statements given the fact that a new cabinet was about to be sworn in.

Emera has argued that Muskrat Falls would supply about 10 per cent of Nova Scotia’s power needs and give it a new source of clean energy, helping reduce the province’s greenhouse gas emissions and its reliance on coal-fired plants.

Derrick Dalley, Newfoundland and Labrador’s natural resources minister, issued a statement saying the agreement shows there is significant demand for surplus power from Muskrat Falls.

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