On the Bleeding Edge
Posted June 14, 2012
Suppose you bought a car with an agreement to pay for it over five years. But after three years you decide you want a different car, perhaps one that gives off fewer greenhouse gases (GHG). Even if the car costs a little more you feel you are doing your part for the planet.
This would work out fine if you could offload the old car but if not you will be making payments on two cars for the next two years. That is a big increase in your monthly bill. Thus most people would wait until payments on the first car are finished before buying the new one.
The Government of Nova Scotia has made the more expensive choice when it comes to buying electricity. But it has been rather silent about the cost, instead allowing people to believe it is due to excessive pay to executives.
A 2009 report to the Utility and Review Board by Nova Scotia Power shows projections of electricity usage for the next 25 years. After factoring in conservation efforts it projects a steady decline in demand.
On the supply side the largest and oldest source is coal burning plants, most of which are at least 25 years old.
Consistent with the goal of reducing GHG’s by 25%, most Nova Scotians would agree that as those plants reach the end of their useful lives, and have been paid for, they should be replaced with more environmentally friendly alternatives such as wind, hydro, or natural gas (which gives off 60% less GHG than coal and far less of other pollutants). It is quite possible that they would support the switch even if the new sources cost a little more.
But instead of waiting until new sources are needed government has ordered NSPI to make long term agreements now to purchase 300 Gigawatt hours of wind power, about 3% of existing demand.
The existing plants have not reached the end of their useful lives and the extra power is not needed to meet demand. In fact the certain demise of one of the Newpage plants and the possible loss of the other mean that the day when new generation is required is even further into the future.
Needless to say power plants that are not being used can’t be resold. So electricity customers will be paying for unneeded capacity until enough existing coal plants would have reached their normal retirement age.
This is only the beginning. We know very few details of the project to bring power in from Muskrat Falls in Labrador. But Emera has been quoted as saying that the required power line will cost $1.2 billion and will supply 170 megawatts (MW) of power. So electricity consumers will be asked to support the cost of the $1.2 billion investment for many years before it is needed.
It is these government policies that are causing our electricity rates to keep increasing while rates in nearby New England are going down. It is these policies that will make our rates in the coming years much higher than they need to be.
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