Nova Scotia Power allowed to own stake in wind farm to meet targets for clean energy
Published: 2009-09-28
The Dexter government is making it easier for Nova Scotia Power to achieve its targets for generating clean energy next year.
The province now says the utility can own a minority stake in a wind farm and use the green energy the farm generates to meet the government’s 2010 renewable energy targets.
This is a step away from the original legislation. Introduced in January 2007, it ordered the power company to increase generation from independent produces to five per cent by 2010 or face a fine of $500,000 a day.
The issue recently came to light when the power company applied to government regulators for permission to develop the $120-million Nuttby wind farm project. In that application they also asked the regulators if it was OK to sell 51 per cent of the wind farm so that it could meet the 2010 independent, green energy target.
The request came at a time when collapsing financial markets threatened to scuttle the various independent wind turbine projects.
In its application, the utility included a one-page letter from Scott McCoombs — the acting director of energy markets for the provincial Energy Department — who gave them the OK.
"I can advise you that it is my opinion, as administrator, that the definition of ‘independent power producers’ does not restrict an electric utility from having a minority equity holding in an independent power producer," Mr. McCoombs wrote in a letter to a utility vice-president on May 29.
Energy Department spokesman Ross McLaren confirmed that remains the government’s position.
That seems to contradict the NDP’s original stand.
Last April, when the power company announced it was gobbling up Nuttby, one of the province’s independent power projects, NDP Leader Darrell Dexter slammed the government for potentially changing the rules for the utility and entrenching its monopoly.
Nova Scotia Power filed its application, to develop the 22-wind-turbine farm at Nuttby Mountain, Colchester County, earlier this month with the Nova Scotia Utility and Review Board.
Located about 20 kilometres north of Truro, the project would include purchasing and erecting the turbines, constructing a new substation and transmission lines.
"Recognizing that the renewable energy requirements are escalating over the next six years, it will serve NSP customers best if compliance with these requirements is achieved in a planned fashion," the utility said in its application.
"Delay in this regard or planning ‘just-in-construction’ may result in higher costs for customers and increased probability of failing to meet the renewable energy standard requirements for the company."
The power company wants the board to approve the project by Dec. 1.
Before the board makes a decision on the wind farm application, it is requesting written comment from parties interested in the project by Nov. 3.
In the meantime, the board has given permission for the power company to order the turbines and begin construction.
Nova Scotia Power’s vice-president of sustainability Robin McAdam said the utility does not have any potential buyers for the wind farm and is focusing on getting the energy project constructed.
"The objective is to make it compliant," said Mr. McAdam last week at the unveiling of the new tidal technology it is testing in the Bay of Fundy with its partner OpenHydro.
He was reluctant to talk any further about the project.
"We really want to focus on the OpenHydro event today," he said.
An economic analysis in its application with the Utility and Review Board shows the power company’s plan for the Nuttby wind farm will be 13 per cent cheaper to operate than EarthFirst Canada Inc.’s original design.
"This application provides a positive net present value to customers of $7.3 million," the utility said in its application to the board.
In addition to the Nuttby Mountain project, two other wind projects are underway in Nova Scotia by independent power producers.
RMSenergy of Westville is building a 51-megawatt farm on Dalhousie Mountain in Pictou County and will sell the electricity to NSP. At Maryvale, north of Antigonish, an additional six megawatts of independently produced wind power will be online by the end of this year.
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