TAYLOR: NSP really affecting Nova Scotians9/19/2012
No matter how much Nova Scotians want the power monopoly out of their lives, the reverse seems to be happening.
Today, Nova Scotia Power Inc. is perhaps more involved in the lives of ordinary Nova Scotians than any other company in the province.
This is partly due to the utilityís monopoly status, but citizens are also being affected by the power companyís relationships with other organizations.
For example, the relationship it has with the Nova Scotia Utility and Review Board, which determines whether the company can raise power rates and by how much, is also an important aspect of life in Nova Scotia.
The review board is forced to walk a fine line between representing the interests of ratepayers and the needs of the power company.
Last week, the utility managed to negotiate a power deal in private with advocates representing various interest groups. As a result of that deal NSP is asking the review board to approve a three per cent power rate increase, effective Jan. 1, 2013, and another three per cent on Jan. 1, 2014.
For what itís worth, NSP says the increase would add just another $3.50 to the power bill of an average household, already among the highest in the country.
NSPís relationship with its parent, Emera Inc., is also important. Emera is an unregulated business that generates more than 50 per cent of its profits from Nova Scotiaís regulated power utility.
An audit of the power companyís energy procurement efforts questions whether NSP is trying its hardest to find cheap sources of energy. The audit points to the relationship that Spanish energy company Repsol YPF has with Emera as an example of conflicting interests that involve NSP.
Repsol uses a pipeline owned by Emera to ship natural gas to the Maritimes and Northeast Pipeline in the United States. Emera is also a part owner in the Canadian portion of the Maritimes and Northeast Pipeline.
Repsol has acquired all the natural gas production in the Maritimes that is not already under contract, including Encana Corp.ís Deep Panuke offshore project, which has not yet started production.
Since Emera makes money from gas transmission, the auditor suggests it was benefiting from topping up its natural gas supply with more expensive natural gas provided by Repsol.
NSP disputes that suggestion.
Then there is the relationship the power company has with its largest customer, Port Hawkesbury Paper LLC at the Strait of Canso. It was willing to negotiate a complicated tax arrangement to provide cheaper power rates for the new owner of the mill. In fact, it would have become a partner in the paper company if the Canada Revenue Agency hadnít forced the company to abandon the idea.
Now, the provincial government is going to come up with the money to support the cheaper power rate for the paper mill, which also benefits the power utility.
On the other hand, the NDP government, as well as the opposition Liberals and Tories, isnít afraid of using the power company for a political punching bag from time to time.
Energy Minister Charlie Parker announced Tuesday the government will require Emera to pay the difference between NSP president Rob Bennettís million-dollar salary and that of a deputy minister in the government
Parker estimates limiting what ratepayers contribute to executive salaries at NSP would save Nova Scotians hundreds of thousands of dollars in electricity costs.
That may be so, but it is only a public relations move, not enough to make a real difference to electricity rates. It is yet another indication that a provincial election is around the corner.
(The Chronicle Herald)