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South Canoe project ruling on hold

The Nova Scotia Court of Appeal has reserved decision in a Glace Bay wind developer’s fight over Nova Scotia Power’s role in a Lunenburg County wind farm.

Cape Breton Explorations Ltd. made its case Wednesday to a panel of judges about the $200-million South Canoe project, located near New Ross.

The developer’s lawyer told the Appeal Court that the province’s Utility and Review Board was wrong to approve a $93-million capital project last year for the power company’s investment in the wind farm.

“The critical question in this case is whether independent power production, competitively procured and not part of a regulated enterprise, is a utility service,” Richard Stephenson said during the hearing.

The regulator’s decision turned South Canoe “into a co-op whereby half of it is actually a utility,” the Toronto lawyer added.

South Canoe, a 34-turbine project, will become the province’s largest wind farm once it begins operating next year. The venture is majority-owned by a pair of prominent Nova Scotia business families, the Braggs and the Jodreys, through their respective companies, Oxford Frozen Foods and Minas Energy.

Nova Scotia Power has a 49 per cent stake in South Canoe through ownership of turbines.

The Glace Bay developer’s lawyer questioned why Nova Scotia Power’s share of the wind farm should be funded by ratepayers when its partners’ capital costs aren’t.

The board’s approval gave South Canoe a cost advantage over other proposed wind farms that didn’t land contracts, he added.

“If Oxford (Frozen Foods) is out, I say (Nova Scotia Power) is out,” he said of having part of the venture in the rate base.

South Canoe was awarded a long-term agreement to supply green energy to Nova Scotia Power through a competitive bid process.

An independent renewable electricity administrator, appointed by the previous New Democrat government, awarded the contract in 2012.

Cape Breton Explorations was one of several losing bidders that cried foul over the way South Canoe is backed by the Emera Inc. subsidiary.

But Nova Scotia Power’s lawyer told the Appeal Court that the company’s involvement in the 102-megawatt project is no different than its role in other wind farms that it owns or is a partner in. The Point Tupper wind farm was cited as an example.

“The project was structured in the same way as this one,” Dan Campbell said.

The regulator’s decision on South Canoe was reasonable and in keeping with past rulings on capital projects, he added.

“If they are trying to find a conflict, there isn’t one,” he said of Cape Breton Explorations’ argument that Nova Scotia Power can’t be a regulated business while its project partners are not.

The Glace Bay developer also argued that the board was wrong to withhold financial documents related to South Canoe.

Nova Scotia Power countered that the regulator’s decision on which materials should be made public was in keeping with past practice involving commercially sensitive documents.