Nova Scotians could ultimately face higher power bills if the utility invests in a struggling wind farm in Cape Breton.
The bills likely won’t go up for the first two years, says the lawyer representing a group of Nova Scotia Power’s largest customers, but after that Nova Scotians will have to pay more.
"Customers are only better for two years with NSP ownership and that over the balance of the time horizon they will be paying more," Halifax lawyer Nancy Rubin states in evidence filed with the Nova Scotia Utility and Review Board.
She states that, according to Nova Scotia Power’s evidence, the annual revenue requirement is forecast to be lower under ownership by the utility from 2010-2012 but during the remaining lifetime of the 20-year project customers will pay more.
The group wants the board to "carefully scrutinize the economics" of a wind deal between Nova Scotia Power and Renewable Energy Services Ltd. (RESL) of Lower Sackville.
The utility is seeking approval of its agreement to partner with RESL and spend $27.7 million to build and construct a wind farm planned for the Strait area that would come on line later this year.
Under the agreement, RESL will build and operate the wind farm and Nova Scotia Power will have a 49 per cent stake in it.
The $55-million project is to produce 22.5 megawatts of electricity from 11 turbines, enough energy for about 6,000 homes.
Nova Scotia’s consumer advocate John Merrick is wondering what’s up with the deal, too.
Merrick says Nova Scotia Power customers should be getting something for guaranteeing 85 per cent of the $27.8 million of the cost of the project.
"Normally, a guarantor charges a fee or requires some other compensation," he states in pre-filed evidence with the board.
The power company’s guarantee is "valuable" and should translate into compensation, reduction in electricity prices or an increase share in the project, he states.
"The consumer advocate also has a concern that on a go-forward basis NSPI may be motivated to protect its shareholders by giving further assistance to RESL," he states.
Nova Scotia Power proposes to buy six of the wind farm’s new 11 Enercon wind turbines. There is one existing turbine at Point Tupper.
The utility and its parent company, Emera Inc., now have ownership stakes in three of the six wind power projects for which Nova Scotia Power signed power purchase agreements in 2008.
The provincial government ordered Nova Scotia Power to have five per cent of its total electricity purchases generated by independent power producers from renewable energy sources by the end of 2011. The legislation was supposed to encourage competition in the marketplace and allow independent power producers to get a toehold in the province.
The provincial Energy Department has also filed evidence urging the board to grant the utility’s request and will assist the power company in meeting its government regulations.
RESL owns and operates turbines across Nova Scotia in Brookfield, Goodwood, Digby, Marshville and Richmond County. RESL also has two wind farms under development in Alberta.
Nova Scotia Power has until May 13 to respond to the submissions.
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