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Cost of renewable energy four per cent higher next year than expected — report

Recent wind projects are proving to be more expensive for ratepayers than originally expected, a new Energy Department report says.

The province said Friday various programs aimed at adding more renewable power to the system were expected to add one to two per cent to fuel costs next year. But Nova Scotia Power’s fuel bill is now forecast to rise six per cent in 2016 because of recent wind projects.

The information is included in a final report on the province’s community feed-in tariff program.

The added fuel costs include contracted energy from the South Canoe wind farm in Lunenburg County, which will add two per cent to the utility’s fuel bill. Smaller projects developed under the province’s community feed-in tariff program account for another four per cent in new expenses.

A department spokeswoman said Friday the added fuel bill comes from the program.

“It was this upward pressure that led to our decision to bring COMFIT to a close in August,” Sarah Levy MacLeod said in an email.

The program, launched by the New Democrats, encouraged local ownership of small-scale renewable projects by giving developers a long-term, fixed price for their electricity. Most of the projects are wind farms. It was expected to add 100 megawatts to the system, but Energy Minister Michel Samson has said the program was more successful than expected. With no limits on projects, twice as much renewable electricity is now expected to be sold to the power company.

Nova Scotia Power pays much higher rates for that energy than it costs for its own generation. The utility has also said another fuel cost driver is the biomass plant in Cape Breton.

The company has already asked the Utility and Review Board to reset its base fuel amount. The utility spends more than $500 million a year on fuel, which is a separate charge on customers’ bills.

Nova Scotia Power says it expects fuel costs to be $110 million higher next year than in 2014.

If approved by the regulator, the plan would see large industrial customers and municipal electric utilities pay three per cent more for their share of fuel in 2016.

Residential ratepayers and commercial users would see small reductions of 0.4 per cent and 1.4 per cent, respectively.

The utility hasn’t said whether it will be seeking a hike in general rates.

Meanwhile, the energy minister has made a final ruling on 49 projects left in limbo when the program was scrapped.

Eight extension requests and one new application were approved. The new venture is a 50-kilowatt wind project by the Municipality of the District of Digby.

Another 37 proposed projects and three extension requests were rejected, representing over 100 megawatts of electricity. Most of the projects were on hold anyway due to a lack of room for them on the distribution system.

By the end of this year, 65 COMFIT ventures will be operational, adding 125 megawatts to the system.