Critics say ratepayers will be on hook for cost overruns at Colchester County site
Government regulators should reject Nova Scotia Power’s proposal to construct a $120-million wind farm in Colchester County, according to evidence filed with the Nova Scotia Utility and Review Board.
Electricity customers could face higher power bills if the project runs into cost overruns or the 22 wind turbines at Nuttby Mountain don’t produce enough power, warns Nova Scotia’s consumer advocate on electricity in a brief filed Tuesday with the board.
"The risk of the investment is on the shoulders of the ratepayers," John Merrick states. "If it turns out that the Nuttby project is inefficient or expensive to maintain, it is the ratepayers who will pay through rates.
"The board cannot depend on NSPI to make decisions beneficial to ratepayers in this matter," he says in the brief.
In September, NSP asked its regulator to approve by Dec. 1 the utility’s application to construct and develop the Nuttby Mountain wind farm.
Located about 20 kilometres north of Truro, the project would include purchasing and erecting the turbines and constructing a new substation and transmission lines.
Before the board makes a decision on the wind farm application, it requested written questions, comments and evidence from interested parties. The deadline for evidence was Tuesday.
Mr. Merrick said before the board makes a decision it must be satisfied this is a "prudent" investment for NSP’s residential customers.
"It is not the role of the board to micromanage or second-guess management of NSP, but ratepayers need to have assurance that they are required to pay for those expenses and investments that do meet a prudence standard."
A group of Nova Scotia businesses say there are "too many unknowns" at this stage for the board to give the green light to this project.
"NSPI is seeking the board’s sanction for it to speculate presumably on behalf of and at the risk of its customers by investing in wind generation," wrote the group’s lawyer, Nancy Rubin.
Ms. Rubin says the Avon Group is concerned about the financial risks to customers if Nuttby Mountain does not produce as much electricity as proposed.
A renewable energy company is recommending the board reject NSP’s application.
Cape Breton Explorations Ltd. president Luciano Lisi argues if NSP is certain about its forecasts, then it should ask its shareholders to take the risk of developing the wind project.
"The numbers NSPI uses in their estimates are simply not acceptable as they are unreliably optimistic, and shift all risks onto the ratepayers. If NSPI is certain of their numbers, then they can have the project built by their mother company Emera Inc. at complete risk to their shareholders," wrote Mr. Lisi.
Mr. Lisi is also president of Strait Bio-Gen, which tried unsuccessfully to convince government regulators three months ago to approve a request by NSP to buy $60-million worth of biomass generated electricity from a partnership between NewPage Port Hawkesbury and Strait Bio-Gen.
NSP says it needs to go ahead with the wind project to meet tough new environmental regulations to reduce pollution. Last April, NSP bought the Nuttby Mountain wind farm from its struggling developer, EarthFirst Canada Inc., in an attempt to move the project forward.
And the Nova Scotia government is urging the board to grant NSP’s request for the wind project. Energy Department lawyer Stephen McGrath wrote in a brief that "all feasible projects should be permitted to proceed as quickly as possible."
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