NSP questioned as wind energy partner2/26/2013
The province should take another look at whether Nova Scotia Power can be a partner in private-sector wind developments, the renewable electricity administrator told the Energy Department in November.
Power Advisory LLC, the Massachusetts consulting firm that served as the independent administrator, made the recommendation in its final report to the province on the competitive bid process that it led in 2011-12.
“In particular, we are concerned that subsequent processes will be less competitive if (Nova Scotia Power) is allowed to participate in the same manner, given that (independent power producers) with no NSPI participation may elect to not participate in the (request for proposals) process given that they believe that they cannot overcome the competitive advantages offered by NSPI,” the administrator wrote.
The final report was made public Thursday during a provincial Utility and Review Board hearing on the South Canoe wind project. Cape Breton Explorations Ltd., one of the losing developers, obtained it through a freedom of information request.
South Canoe, a $200-million wind farm, was approved last August by the administrator, beating out 16 other proposed projects across the province.
The venture, in the New Ross area of Lunenburg County, is led by Oxford Frozen Foods and Minas Basin Pulp and Power Co. Ltd. of Hantsport.
Nova Scotia Power is a minority partner, owning 49 per cent of the 102-megawatt project, which will become the largest wind farm in the province.
South Canoe is actually two wind farms, each majority owned by the Bragg or Jodrey families.
The utility is also a minority partner in the other winning project, 13-megawatt Sable Wind, which is led by the Municipality of the District of Guysborough.
All three wind farms, slated to be operational by Jan. 1, 2015, will sell their electricity to Nova Scotia Power under 20-year contracts awarded by Power Advisory.
In its final report, the administrator told the department it believes the bid process was fair and transparent, as well as highly competitive.
But developers still voiced concerns to Power Advisory and the Energy Department after the contracts were announced, the report said.
Some developers recently went public about their concerns after Nova Scotia Power applied to have its $93-million share of the capital cost of South Canoe included in rates.
Seven developers told the board that the utility should shoulder the risk instead of expecting ratepayers to be on the hook for any construction cost overruns or unforeseen operating expenses.
The hearing panel reserved decision after a hearing last week.
Energy Minister Charlie Parker said Monday the province isn’t planning to issue a tender for any further large-scale wind farms any time soon.
Nova Scotia Power needs time to integrate the approved projects on the grid, Parker said in a written statement.
“If that situation changes, the department will consult on what process should be used under the conditions existing at that time.”
The minister said the South Canoe bid was $8 per megawatt less than the lowest non-winning one. That represents a $2.5 million annual saving, or $50 million over 20 years, for ratepayers, he said.
Mike Magnus, former president and chief executive of Shear Wind Inc., said the utility should have taken a look at all proposed projects before deciding which ones to partner with.
“That way, then you have a good sense of really delivering the best wind farm to the ratepayer.”
Shear Wind of Bedford, which has since been acquired by Sprott Power Corp. of Toronto, wanted to expand Pictou County’s 61-megawatt Glen Dhu wind farm.
A Nova Scotia Power spokeswoman said the process overseen by the administrator was competitive and resulted in the best value for ratepayers.
“The parties were well aware that Nova Scotia Power was participating or had the ability to participate in these projects, as laid out in the RFP rules,” Neera Ritcey said.
(The Chronicle Herald)