Government’s Options

The new government is striving to provide a coherent position on the Maritime Link.

As a communications exercise, its efforts have been effective at creating distance from the NDP government’s position. Whether it will have a positive impact on behalf of ratepayers is in doubt.

Before and at the initial hearings at the Utilities and Review Board (UARB), the NDP provided unrestrained cheerleading for the project. Both the Liberals and the PC’s were critical of the proposed financial arrangements, though not necessarily the project itself.

The UARB ordered that the present proposal for the Link could only be approved if strong assurances were provided on the amount and pricing of the inexpensive market-priced energy. The hearings that concluded on Nov. 18th were held to examine whether that condition had been met by the proponents’ Compliance Filing.

The Filing has been opposed as an inadequate response by each of the Consumer Advocate, Small Business Advocate, Industrial Group, and Lower Power Rate Alliance. The Department of Energy, appearing on behalf of the government, also opposed the proposal as presented. But it then went on to outline eight conditions which would make them feel the deal was acceptable.

The government’s presentation was rather chatty and seemed hastily prepared. The eight requirements were not even ready in written form until after the hearing. They are not expressed in words that the UARB could use in a decision, if it was so inclined.

Nalcor has indicated that they have no problem with those conditions. That is hardly surprising since the burden of the conditions falls on Emera and NSPI. It appears that the burden is rather light. Emera has said that most of the conditions are things that they have already promised or expected to be required of them.

They certainly do not include some of the major objections of the other interveners—in particular, the concerns that the amount and form of inexpensive market-priced energy was inadequate.

In other words, the new government has expressed its willingness to support a form of the agreement that all of those intervening on behalf of customers would oppose. This is both surprising and disappointing. Perhaps the Department of Energy has not completed the about-face necessary to fully support the new government’s position. Perhaps the Minister is still learning the file.

Both the Minister and the Premier have been making statements implying that the UARB process is just another step on the way to a final decision by government. They have talked about “needing to see a final offer” and “wanting to have all the facts before reaching a decision” and “looking at what the board is going to rule on in terms of this initial step.”

In fact, if the UARB rules in favour of the Compliance Filing, the government may find its options are rather limited. The Interprovincial Agreement signed by the NDP when in government says in part:

To the extent that a Government Party has any legislative authority with respect to the Project or the Formal Agreements, each Government Party acknowledges that the other Parties are relying upon the good faith of the Government Party to maintain substantially the legislative and regulatory framework applicable to the Project and the Formal Agreements…”

That will make it tricky for government to do more than trim around the edges.

It is easy to lose sight of the bigger picture. The only reason the proposed deal made any progress with the UARB was the effort the previous government made to slant the process. Instead of allowing the competing alternatives to show how they would  best meet Nova Scotia’s needs those alternatives were forced to compare with what the Maritime Link proposal provides, which is certainly not a good fit for Nova Scotia’s needs.

It has become crystal clear that the proposal only guarantees the expensive block of electricity in any particular year, and that access to inexpensive market-priced energy would only occur if and when Newfoundland and Labrador needs have been met. We have never had a very satisfying explanation of why we should pay a huge premium for the right to access market-priced energy.

The government should have been doing everything possible to encourage a denial of the current application. Instead, they seem to have made efforts to facilitate approval of a deal that would still be unsatisfactory if all eight of their conditions were met.

Ratepayers should hope that the UARB pays close attention to the strong and well considered opposition expressed on their behalves by the various advocates.  A clear denial of the present application will allow for a much needed restart on the whole process.