November 20, 2012
Nova Scotia

Nova Scotia accepts limit for wind projects’ premium-rate surplus power

By JOANN ALBERSTAT Business Reporter | The Chronicle Herald | November 20, 2012 | thechronicleherald.ca

The province now agrees there should be a contractual limit on the amount of surplus power that small community-based wind projects can generate at a premium rate.

The Energy Department told the provincial regulator this week that projects approved under the community feed-in tariff program should have a 20 per cent allowance for excess power.

That amount would be in keeping with other contracts Nova Scotia Power has with independent power producers, the province said.

“The department accepts that the security of a known limit is favoured over flexibility of a future uncertain rate to ensure COMFIT projects are financed,” the department said in a filing with the Utility and Review Board that was made public Tuesday.

The board is in the process of approving a standard contract for COMFIT projects.

The program is designed to encourage municipalities, First Nations and community groups to develop small-scale energy projects by giving them a fixed rate for their power over a 20-year period.

Most of the proposed projects are wind, although a few tidal and biomass ventures are also in the works.

The province said it is seeking changes to the proposed contract after consulting stakeholders this fall.

Developers have lobbied for revisions aimed at making it easier to get proposed projects off the ground.

But Nova Scotia Power expressed concern that the agreement didn’t include a limit on how much surplus power it had to buy at a premium price.

Consumer advocate John Merrick agreed a cap was needed to ensure ratepayers aren’t paying top dollar for green energy that is not needed to meet provincial renewable energy targets.

The Energy Department had said it agreed there should be limits on payment but wanted to deal with the issue, if it arose, through a change in regulations.

The proposed new contract would include the 20 per cent allowance, which would be smoothed over a three-year period.

Beyond that amount, wind farm operators would have to accept a lower rate for any additional power they generate.

The province has also agreed with developers that banks should be allowed to take control of projects that have lost COMFIT approval or run into financial trouble.

But the Energy Department said it will be proposing a lower rate to cover such cases.