Quebec eyes status at Maritime Link hearing

1/21/2013

Hydro-Quebec may apply to be an intervener in a Nova Scotia Utility and Review Board hearing on the proposed Maritime Link project because of concerns about the findings of a government-funded study, the utility company said Friday.

Quebec’s Crown-owned utility, which declined comment Thursday on the consultant’s report, changed its tune the following day.

“Normally we don’t comment on such third-party reports,” Ariane Connor, a Hydro-Quebec spokeswoman, said in an interview.

“But having had a chance to look it over quickly over the last 24 hours, we’re very surprised by the analysis and the conclusions of the report.”

Connor said the utility may want to be part of the regulatory hearing to “present our view” because it wasn’t consulted about the study.

Emera Inc., Nova Scotia Power’s parent company, is expected to file its Maritime Link project with the provincial regulator in the next two weeks.

That’s when ratepayers, who are being asked to foot the bill for the subsea cable across the Cabot Strait, are expected to learn what impact the proposal could have on rates.

The capital cost of the link is estimated at $1.3 billion to $1.5 billion.

The report, by Power Advisory LLC, concluded Labrador hydro would be the cheapest way to meet Nova Scotia’s green energy goals.

The Massachusetts-based consulting firm also found that Muskrat Falls hydro would be significantly less expensive for Nova Scotians than buying electricity from Hydro-Quebec or building a mix of wind farms and natural gas plants.

The study, released Thursday, concluded that Hydro-Quebec imports would cost $402 million more over a 35-year period than Labrador hydro.

Generating the power in Nova Scotia would be even more pricey — $1.5 billion higher than Muskrat Falls — the report said.

The Hydro-Quebec spokeswoman said the utility wondered why the report didn’t put a price, in cents per kilowatt hour, on each of the options.

“We thought that that would have been very useful.”

Connor refused to say what, if any, additional concerns Hydro-Quebec had with the findings.

Premier Darrell Dexter said he’s not sure why Hydro-Quebec would want to be an intervener at the hearing.

“They can do whatever they want. One would have to ask why that would be, when they have never ... extended to the province an offer,” he said in an interview.

Dexter said he had told former Quebec premier Jean Charest that the province would be interested in hearing an offer from the energy giant, a message that Dexter said was conveyed to Hydro-Quebec officials.

Dexter said he couldn’t comment on whether John Dalton, Power Advisory’s president, should have spoken to Hydro-Quebec officials for his study.

But the premier said he’s still confident in Dalton's analysis of the Hydro-Quebec option. He noted Dalton has worked with the State of Vermont, which buys power from Hydro-Quebec.

Dexter said transmission upgrades across three provinces would have to be co-ordinated to get Quebec electricity, with questions of who would pay and how much.

“How long would it take for them to put that kind of an agreement in place between three provinces, where you would have to divide up both the investment and the return before you ever got to the question of how Hydro-Quebec was going to charge you for the power itself,” he said.

“So they may have their nose out of joint, but in my view, the Maritime Link project and the Dalton study just further proves that this is the lowest-cost option.”

Still, Dexter said pursuit of the Link option doesn’t preclude buying from Quebec in the future, with the Link projected to supply eight to 10 per cent of the province's electricity needs, with the potential for more.

“If they wanted to propose a long-term, stable energy arrangement with Nova Scotia for an additional eight to 10 per cent, we’d be more than happy to consider it,” he said.

The Hydro-Quebec spokeswoman wouldn’t say whether the utility has made a contract offer to Emera or the province.

“We’re a market participant, like everyone else, in the wholesale market,” Connor said.

“To that extent, we have regular business dealings with Nova Scotia and Emera. We’re always looking for new business opportunities and surveying the marketplace.”

She also declined comment on whether Hydro-Quebec planned to make such an offer, or to say whether the utility was even considering it.

The Energy Department, which commissioned the study, declined comment on Hydro-Quebec’s comments, as did Emera.

Halifax-based Emera is partnered with Nalcor Energy, Newfoundland and Labrador’s Crown-owned utility, on the $7.7-billion Muskrat Falls development.

Emera will pay 20 per cent of the hydroelectric project’s cost and receive 20 per cent of the electricity in return.

If ratepayers pay for the Link, needed to bring Labrador hydroelectricity to mainland markets, Nova Scotia would get Emera’s share of the power produced on the lower Churchill River for 35 years.

Dalton, who has been a consultant for Hydro-Quebec, said Thursday that imports from that province would be more expensive because major transmission upgrades would be needed.

The Power Advisory president also said the cost difference could be even higher because the study assumes Nova Scotia could get the electricity at a price similar to what utilities in New England are now paying Hydro-Quebec.

But Dalton said it’s “highly unlikely” Nova Scotia could get the same deal. The U.S.-based consultant said Nova Scotia Power would likely have to pay a premium for the power because demand for electricity is highest here in winter, as it is in Quebec, not summer, as in New England.

“We are confident in terms of the assumptions that we’ve made regarding how we’ve priced the Quebec alternative,” he told reporters.

The province will file the Power Advisory report with the board as evidence in the upcoming hearing.

The cost of the untendered contract, originally estimated at about $85,000, is now estimated at $100,000, Energy Department officials said.

In a speech to the Maritimes Energy Association on Friday morning, Dexter said a concern with relying on power from Quebec is what might happen if Nova Scotia’s link with New Brunswick was cut off.

Liberal energy critic Andrew Younger said he has the same concern with Muskrat Falls, citing a recent Manitoba Hydro study that found the Muskrat Falls project may experience transmission outages that could last a month or more.

(The Chronicle Herald)