Two of Nova Scotia’s corporate heavyweights defended their proposed $208-million wood biomass energy project before the provincial regulator Tuesday.
Nova Scotia Power and its largest customer, NewPage Port Hawkesbury, argue the controversial biomass project is in the "best interest" of electricity customers in Nova Scotia and should be approved without further delay.
For the project to go ahead, it must receive approval from the Nova Scotia Utility and Review Board, which is in the final stages of reviewing the proposed project. It would use wood to generate electricity.
In a last-ditch effort to win over the regulator, NewPage urged the board in its 53-page submission released Tuesday to approve the project without further conditions.
Meanwhile, its partner, Nova Scotia Power, warns any delays in approvals or having to negotiate with other companies for another biomass project could mean higher power bills for its 470,000 customers. The utility would like the power plant to be operating by 2012 to meet the province’s targets for producing electricity from renewable sources.
"Continued analysis and negotiation is not justifiable, nor would it be appropriate, given that the Port Hawkesbury biomass project is the best available economic option for customers," wrote Nova Scotia Power in 36 pages of final arguments to the board.
NewPage Corp., the Ohio company that owns NewPage Port Hawkesbury, a pulp and paper operation, has reported having only $7 million in cash and $113 million available on a line of credit. The company is $3.3 billion in debt and faces annual debt servicing charges of $330 million.
Despite increasing sales in its second quarter, NewPage reported a loss of $174 million.
Last week, consultants hired by the regulatory board voiced concern that the project poses "significant risks" to Nova Scotia Power customers.
The consultants, from Liberty Consulting in California, recommended to the board that Nova Scotia Power go back and negotiate with biomass proposals from Northern Pulp and Cape Breton Explorations Ltd.
NewPage lawyers refuted the consultants’ remarks about the company’s financial stability.
"Liberty’s expressed concern with the financial condition of NewPage Corp. was premised on a non-expert opinion based apparently on an Internet review of certain publicly available information," NewPage’s lawyers wrote.
The pulp and paper company also stated the future of any industrial enterprise is subject to the "vagaries of its market environment" and the proposed energy biomass project will "enhance" the Cape Breton mill’s future.
Nova Scotia’s consumer advocate John Merrick, along with a group of industrial customers, known as the Avon Group, and the Ecology Action Centre all recommended the board reject the proposed biomass project.
Merrick argues the project has its benefits but there are "excessive and unreasonable risks of increased costs for ratepayers and should not be approved."
"It would be of benefit to NewPage and provide improved operating conditions for one of Nova Scotia’s largest employers," Merrick wrote in his submission.
He also argues the financial circumstances facing NewPage’s parent company will ultimately affect the mill in Cape Breton.
"No matter how productive the Port Hawkesbury (mill) may be, it is not a stand-alone operation," he wrote. "The risk is sufficiently possible and the consequences sufficiently great that it makes the project unreasonable and imprudent for ratepayers."
The Ecology Action Centre in Halifax does not oppose energy production from forest biomass but is concerned over the supply of biomass and the long-term fuel costs for the project.
The public hearing into the NewPage and Nova Scotia Power proposal has concluded. Rebuttal arguments are due by Friday. Board spokesman Paul Allen has said the board’s policy is to try and issue all decisions within 90 days of receiving all evidence.
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