Houston says he'll intervene in future power rate increase applications if necessary

A bill before the legislature would limit the rate increase the provincial regulator could award Nova Scotia Power for the next two years. (Nova Scotia Power/Twitter - image credit)
A bill before the legislature would limit the rate increase the provincial regulator could award Nova Scotia Power for the next two years. (Nova Scotia Power/Twitter - image credit)

Premier Tim Houston says legislation his government is using to limit rate increases for Nova Scotia Power could be used again in the future if he decides it is required.

"We'll do whatever is necessary in any form, in any place, to protect Nova Scotians," Houston told reporters at Province House on Tuesday.

"My obligation is to Nova Scotians. That's where my obligation will always remain."

The premier's comments come a day after the province's consumer advocate expressed concern that Bill 212, which limits the rate increase the Nova Scotia Utility and Review Board can award the utility for the next two years, shakes the independence of the board and could lead to higher rates in years to come.

Bill Mahody told the legislature's law amendments committee Monday that by restricting the rate increase to 1.8 per cent over the next two years, the government risks creating a market correction that would drive up Nova Scotia Power's borrowing costs and debt payments — circumstances that would ultimately fall to ratepayers to cover.

CBC
CBC

Houston said officials with his government "considered every possibility" in drafting the legislation, which comes after the first rate hearings in more than a decade, but before the UARB could deliver its final ruling on the utility's application.

The premier didn't answer directly when asked if he was convinced the bill would not lead to higher borrowing costs for Nova Scotians.

"I'm convinced it will lead to more affordable power for Nova Scotians and that's what my goal is," he said Tuesday.

Mahody was not the only presenter on Monday to express concerns about Bill 212. Nova Scotia Power CEO Peter Gregg said MLAs must choose between supporting the legislation or supporting the province's climate targets of generating 80 per cent of electricity from renewable sources and ending the use of coal for electricity generation by 2030.

Gregg said there is not an affordable, viable way for Nova Scotia Power to meet those targets without the Atlantic Loop and the hydroelectric power it would deliver to the province via Quebec.

Natural Resources Minister Tory Rushton said he disagreed with Gregg's framing of the issue. Loop or no loop, he and Houston said they expect Nova Scotia Power to meet its targets.

Robert Short/CBC
Robert Short/CBC

Rushton said the constraints his government is placing on the UARB means whatever increase the board grants will amount to a cut for Nova Scotia Power when inflation is considered, but he said the company should be able to shoulder it.

"There is a profit margin there and other businesses around our province and around our country are taking part of their profits to ensure the longevity of their company," he told reporters.

"I expect Nova Scotia Power to do no different."

While Houston and Rushton downplayed Mahody's concerns, Liberal Leader Zach Churchill said they should be cause for pause.

Jeorge Sadi/CBC
Jeorge Sadi/CBC

Although he welcomes protection for ratepayers, Churchill said the government risks "cutting off their nose to spite their face" if Mahody's concerns about potential long-term financial pain are not thoroughly considered.

"I feel this government is very reactionary," Churchill told reporters.

"They're really driven to win the headlines of the day, and when you're making decisions like that, you can make some decisions that are bad for the long term of our province and have pretty grave consequences."

NDP Leader Claudia Chender said she is concerned about the government inserting itself into a process that is supposed to be independent.

"The premier seems to want to run the entire government off the side of his desk," she told reporters.

"There are really good reasons why we don't run governments out of one office but we have independent experts who help us to navigate the big decisions and the big dollars attached to government funding and decisions."

CBC
CBC

Chender said the Tory legislation might bring short-term relief for Nova Scotia Power customers, but she said Houston is putting off a bill that will eventually come due the same way the Liberals did when they were in power.

The difference then was the Liberals prevented the UARB from hearing any general rate applications from Nova Scotia Power, while the Tories allowed the hearings to go ahead but stepped in to shape how the decision could look.

If the government wants to intervene around power rates, Chender said it should happen by allowing the UARB to consider a low-income rate based on people's income, creating penalties that can be used if the targets for getting off goal and increasing use of renewables are not met, and stiffening performance standards for Nova Scotia Power.

Nova Scotia will be less than a year from a provincial election when the constraints of Bill 212 expire.

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