Nova Scotia Power was given last-minute permission to postpone paying taxes this year on three wind projects, the Nova Scotia Utility and Review Board ruled Thursday.
But the Halifax-based power utility is being hauled before the board in January to answer further questions about the company’s finances and how much money would be saved by the tax deferral.
"It may well be that it is appropriate that the deferral be used in the manner which Nova Scotia Power suggests, but the board believes that under the circumstances . . . a further examination of these issues by the board and interested parties is both necessary and warranted," the board wrote in its decision.
Nova Scotia Power wanted to roll over an undetermined amount of tax savings from the renewable energy projects — wind farms near Digby Neck, Nuttby Mountain and the Strait of Canso — to 2011. It applied to the board last week and demanded a decision by Dec. 31.
The board took issue with the ultimatum, the tight timeline and suggested Nova Scotia Power knew they were going to face an over-earning situation in 2010.
"The board believes Nova Scotia Power would have known about this issue long before Dec. 15 and (it) should have brought the application in a more timely manner," board chairman Peter Gurnham and Murray Doehler wrote in the decision.
In its application, Nova Scotia Power also told the board it "must" approve its request but this direction didn’t sit well with the regulator.
"The board wishes to make it perfectly clear that it, and not Nova Scotia Power, will determine whether directives ‘must’ be issued," the decision said.
The board also said the utility can follow its decision or appeal it to the Court of Appeal.
David Rodenhiser, Nova Scotia Power spokesman, said the power company is reviewing the decision.
"We’re pleased that the board has agreed to the deferral and has confirmed that it provides an advantage to customers as we submitted," he said. "We look forward to the hearing on how the deferral will be implemented."
Postponing the tax payments was opposed by Nova Scotia’s consumer advocate, NewPage Port Hawkesbury Corp., Bowater Mersey Paper Co. Ltd., the Municipal Electric Utilities of Nova Scotia Co-operative, and the Avon Group, which represents several medium to large Nova Scotia businesses.
They argued that any extra earnings belong to customers and not the shareholders. They also asked the board to order a hearing for full disclosure to ensure shareholders do not receive the full benefit of any excess earnings.
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