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The Globe and Mail

Nova Scotia opposed to Maritime Link energy deal

James Smellie, right, lawyer for Emera subsidiary Nova Scotia Power Maritime Link Inc., accompanied by Rene Gallant, vice-president of regulatory affairs for Emera, makes an opening statement at the Nova Scotia Utility and Review Board hearing considering an undersea hydro cable between Newfoundland and Nova Scotia, in Halifax on Tuesday, May 28, 2013.


The Nova Scotia government added its voice to the chorus of opposition to a revised agreement to build the Maritime Link as a hearing on the $1.5-billion project wrapped up Monday.

The provisions of the deal between power company Emera (TSX:EMA) and Nalcor Energy, Newfoundland and Labrador's Crown-owned utility, are vague and put Nova Scotia's ratepayers at risk, a lawyer for the province's Energy Department said.

In his closing argument at the Nova Scotia Utility and Review Board hearing, Stephen McGrath said Emera has failed to show how the agreement meets the board's condition that it gain access to market-priced energy at no additional cost to the province's power customers.

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Energy Minister Andrew Younger said the government has proposed eight conditions be added to the agreement that include audits of transactions between Nova Scotia Power, Emera and its subsidiaries are conducted, and that the risk for the project is borne by Emera.

"The document as submitted does not go far enough in terms of protecting ratepayers. It's as simple as that," Younger said outside the hearing.

He would not say, however, whether the government would oppose a decision by the board if it did not include those conditions.

"We will look at what the board decides, but obviously if the board was to take all of the conditions that we've suggested then we'd be in a position to be more inclined to support the deal," Younger said.

He said the government has options at its disposal if it isn't satisfied with the outcome of the board's decision, though he would not specify what those were.

"At this point, we want to see what the board's decision is because we respect the board," he said.

Both the province's consumer and small business advocates said they believe the government's conditions improve the deal, but they still can't support it because it doesn't provide value for ratepayers.

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"That agreement has some fundamental problems with it that would take more than some lipstick and some face cream to clean up," said consumer advocate John Merrick.

Emera CEO Chris Huskilson expressed confidence the agreement has satisfied the conditions imposed by the board and said the conditions asked for by the province have also been addressed by the hearing.

The Maritime Link would see the construction of a subsea cable that would link Nova Scotia with Newfoundland, allowing Nova Scotia Power to purchase energy produced by the Muskrat Falls hydroelectric plant, currently being built in Labrador.

Under the agreement, ratepayers would pay for the link through their electricity bills.

The 35-year deal would see Nova Scotia supplied with 20 per cent of the energy from Muskrat Falls in exchange for paying 20 per cent of the costs of the $7.7-billion project.

The Utility and Review Board will determine whether Emera has secured a commercial guarantee from Nalcor for access to cheaper market-priced power over and above the 20 per cent block agreed to.

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The board has reserved its decision.

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