Nova Scotia Power customers will shell out $144.5 million in 2020 to help pay for the Maritime Link, the transmission system built — but yet to deliver — electricity to Nova Scotia from the Muskrat Falls hydroproject in Labrador.
Regulators approved the charge Wednesday in a decision that contains numerous references to continued uncertainty hanging over the troubled megaproject, which is billions of dollars over budget and years behind schedule.
Muskrat Falls electricity was supposed to arrive in Nova Scotia over the $1.57-billion Maritime Link in 2017. Electricity is now expected June 1, 2020.
The Maritime Link includes overhead transmission lines and towers in Newfoundland, but the heart of it is a 170-kilometre subsea cable that runs from Newfoundland to Cape Breton.
What N.S. will get
Nova Scotia Power parent company Emera built the Maritime Link in the so-called "20-20" deal with Newfoundland utility Nalcor.
Emera agreed to pay 20 per cent of the costs in return for a guarantee of 20 percent of the electricity, known as the Nova Scotia block.
As costs skyrocketed in Labrador, Emera's contribution remained fixed. The Maritime Link, which is operated by another Emera subsidiary, Nova Scotia Power Maritime Link, was built on time and on budget.
Nova Scotia Power Maritime Link is the corporate entity that applied to the Nova Scotia Utility and Review Board to recover Maritime Link costs from Nova Scotia Power customers.
$10M holdback maintained
Recognizing that Nova Scotia Power customers are paying for the Maritime Link without getting any electricity from it, the Nova Scotia Utility and Review Board previously ordered a "holdback" of $10 million the company was charging customers in 2018 and 2019. The money was collected, however much of it was refunded to customers based on a formula that calculated the benefits of the link.
In Wednesday's ruling, regulators maintained the $10 million holdback in 2020, prorated to the arrival of electricity.
The board decision notes there are still multiple "project risks" that could affect the delivery of electricity to Nova Scotia, citing potential construction and commissioning delays at the Muskrat Falls Generating Station, the Labrador Island Link and Newfoundland transmission facilities.
"The Board is concerned that there are still significant risks remaining that could affect the expected delivery date," board members Peter Gurnham, Roland Deveau and Steven Murphy wrote in their decision. "The Board recognizes that these risks are primarily the responsibility of Nalcor and not NSPML.
"However, if these risks result in any further delay of delivery of the NS Block, NS Power ratepayers will be impacted."
Software testing delayed
The biggest risk stems from ongoing software problems associated with the Labrador Island Link, which will bring electricity from Muskrat Falls in Labrador to the transmission facilities on the island of Newfoundland.
General Electric was supposed to complete software testing in October but pushed the date back to December.
During regulatory hearings Emera Newfoundland president Rick Janega told the board "our concerns were elevated" when Nalcor revealed testing was running late.
He testified that "to be quite honest, our view is similar to that of the Board. This is taking a long time. They are years behind schedule for completing the controls, which escalates our concern level and Nalcor's."
Janega also expressed hopes that the system would be ready on time.
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