February 15, 2013
Nova Scotia

Wind farmers want NSP to back off

By JOANN ALBERSTAT Business Reporter | The Chronicle Herald | February 14, 2013 | thechronicleherald.ca

A group of wind farm developers is urging the provincial regulator to reject Nova Scotia Power’s bid to have ratepayers cover its $93-million share of the cost of building a Lunenburg County wind farm.

The six developers told the Nova Scotia Utility and Review Board in an undated letter, made public Thursday, that the power corporation shouldn’t be allowed to transfer the financial risks of the project to ratepayers.

“It is our opinion that by placing the (Nova Scotia Power) 49 per cent of the South Canoe project on the rate base, the best value is not being achieved for the Nova Scotia ratepayer,” the developers say.

The letter is signed by three Nova Scotia-based developers: Will Apold, chairman of Halifax’s Natural Forces Wind Inc.; Mike Magnus, former president of Bedford’s Shear Wind Inc.; and Reuben Burge, president of Pictou County’s Dalhousie Mountain Wind Farm Inc.

The other three developers represent national or international firms: Jeff Jenner, president and CEO of Toronto-based Sprott Power Corp.; Peter Grover, senior vice-president of project management with Longueuil, Que.-based Innergex Renewable Energy Inc.; and Peter Clibbon, vice-president of development with Montreal-based Renewable Energy Systems Canada Inc.

All the developers were losing bidders in a competitive process that saw three wind projects awarded 20-year contracts to supply electricity to Nova Scotia Power’s grid.

The winning projects were selected last August by the province’s independent renewable electricity administrator, Massachusetts-based consultant John Dalton.

Dalton’s firm, Power Advisory LLC, was later hired by the Energy Department to complete a recent study of the proposed Maritime Link project.

The projects selected last summer include $196-million South Canoe, which includes two wind farms. Oxford Frozen Foods is developing a 78-megawatt project, while Minas Basin Pulp and Power has a 24-megawatt venture on a neighbouring property.

Also awarded a contract by the administrator was Sable Wind, led by the Municipality of the District of Guysborough.

Nova Scotia Power is a minority partner in all three projects, owning a 49 per cent stake in each.

The three utility-backed projects beat out 16 others proposed in various parts of the province.

Burge said Thursday the developers who signed the letter don’t believe Nova Scotia Power’s plan to include South Canoe capital costs in rates is a good deal for ratepayers.

“The government has put a great renewable energy plan in place. We all believe in that,” he said in an interview. “But we don’t necessarily believe that it’s in best interest … to allow this work order to proceed.”

In the letter, the group says Nova Scotia Power should be covering its share of South Canoe costs from revenues the wind farms will receive through electricity sales.

“It was not a provision of the (process) that any successful bidder would be entitled to include their share of capital cost of an awarded project in the rate base.”

If the utility is allowed to pass on capital costs to ratepayers, the wind farms could end up costing more than Nova Scotia Power and its partners proposed in their winning bids, the group said.

A hearing on the 102-megawatt South Canoe, which will be the province’s largest wind farm, is slated for Wednesday in Halifax.

The utility has yet to seek board approval for its share of Sable Wind capital osts.

The six developers aren’t the only ones telling the board that Nova Scotia Power had an unfair advantage.

Cape Breton Explorations Ltd., headed by Luciano Lisi, has also made filings that say the utility’s plan would undermine any future competitive bid process.

A Nova Scotia Power spokeswoman said the utility is looking forward to taking part in next week’s hearing and answering questions from the board and stakeholders.

“We participated in the process as allowed for in the (administrator’s) rules,” Neera Ritcey said in an interview.

“The (administrator) noted in his decision that Nova Scotia Power’s participation in the bidding process helped lower costs and provided good value for customers.”