Ministerial Statement

December 3, 2013

Mr. Speaker, today I rise to speak about an important agreement that impacts all Nova Scotians.

My colleagues in the legislature, the public and our partners in the energy industry are all very interested in our government’s position on the Maritime Link project.

Last Friday from the Utility and Review Board ruled that the project agreement will proceed and made it clear that Emera and Nalcor shareholders take on project risks, not ratepayers.

This is a significant milestone and one our government helped shape by intervening at the recent hearings to ensure Nova Scotia ratepayers’ interests are protected.

Mr. Speaker, I want to remind Nova Scotians that our party was on record as stating that the Maritime Link was a project with potential – but our issue was with the structure of the deal and the risk for ratepayers.

In fact, while appearing at the Resource Committee Meeting in October 2011, I said – And I quote:

The thing that frustrates me sometimes is that every time you ask a question about Churchill Falls … there a lot of people who … say you’re against the project. I just want to be clear that I’m not against the project, although I do have some questions about some of the information that has been put out about it but also in terms of where this fits in the overall scheme. I think they’re important questions that we need answers to. I do think that the Muskrat Falls project is an important component of the entire energy mix.

In opposition I raised risks to the project like water management, non-delivery, and availability of surplus energy. The previous government said ‘don’t worry,’ despite it not being enshrined in the agreement. Through the actions of the UARB and our government, these issues are now addressed so the risk of these issues is no longer on ratepayers.

Even in its first ruling on the project, the UARB clearly agreed with our position, and that of other intervenors.

On July 22, the UARB approved the project with conditions that Emera must obtain a guarantee of access to market-priced electricity from Nalcor or an alternate source. These are issues I had raised in my arguments before the board and ones they largely agreed with.

My position in support of the Board’s decision, as well as the Premier’s was widely reported.

Mr. Speaker, the purpose of the recent compliance is hearing was about whether or not the energy access agreement met the condition for access to market energy – as required as part of the Board’s conditional approval in July. The Board clearly stated they were not revisiting the Link as a project during the recent hearing.

And it wasn’t about whether the Board was approving the Maritime Link deal and charging it back to customers. This approval had already been granted conditional on the compliance filing.

This was about the structure of the agreement and this government was not satisfied with the agreement as presented.

We reviewed all evidence from all sides. We had the government lawyer ask tough questions in the hearing – something which was noted as rarely – if ever – having been seen before.

We spent a considerable amount of time before closing arguments reviewing whether or not we were satisfied. We determined that the details of the agreement could address our concerns – but we were troubled because we didn’t think the agreement itself was clear enough as presented.

Mr. Speaker, on behalf of Nova Scotia ratepayers, we proposed eight conditions to improve the agreement and ensure ratepayers were better protected.

That’s why we pushed to make sure that project risks were with Emera and Nalcor – not ratepayers.

On Nov. 29, the Utility and Review Board ruled that the revised agreement combined with the explanations and commitments made by Emera during the hearing finally met its condition on access to market energy. The Board’s decision also fully met – and in some cases exceeded – the conditions put forward by the province…and I quote from the Board’s decision:

“The province and other Intervenors had recommended that the Board impose a number of conditions. The Board considers that interpreting the energy access agreement in accordance with the above representations and clarifications is a more appropriate manner of dealing with the concerns raised by the province and other intervenors. However, the Board observes that, as a practical matter, the end results, on a number of issues, is very similar to the conditions proposed by the province.”

I said on the day the conditions were announced that we would accept the exact wording or a ruling that achieves the same effect as our conditions. 

From the second we received the document; I along with our legal advisors and staff reviewed the decision. Everyone came to the same conclusion. Our lawyers reviewed the decision, and while lawyers rarely agree they did in this case. The conditions were met in full.

The concerns behind all of our conditions are now part of the decision. This revised Energy Access Agreement we have today, is significantly better for Nova Scotia ratepayers than the previous agreement from six months ago.

The one the former government recommended that the Board approve without conditions.

Why?  I want to point out the benefits clearly to Nova Scotians.

We now have a guarantee of access to market energy and the result will be a competitive market.

In addition to Nalcor energy, we will be able to access competitive power from other sources.

We now have guarantees of access to surplus energy.

We did not have this before.

We have now a guarantee that risk is shifted away from ratepayers to Emera and Nalcor and we did not have that before. 

The revised agreement goes even further to outline exactly what the mechanics of sales and benefits to ratepayers will be.

So overall, this is a different and much improved deal for the Link project.

Every single issue we expressed concern with about the Link deal are now fully addressed in the new arrangement.

We also need to consider the decisions of the previous government – and what will be new to Nova Scotians – is a better understanding of where the previous administration made commitments which must be weighed by this government.

Identifying legal and binding arrangements the previous administration made. Commitments that we will – and must – uphold in good faith.

For example, on Nov 30, 2012 – there was a commitment made by Nova Scotia, Newfoundland, Emera and Nalcor to meet the terms and conditions required to satisfy the federal loan guarantee.

UARB approval of the project was a key condition that had to be met, for other terms to be dealt with.

If we were not satisfied that our concerns were met, we would have walked away. But given our conditions have been met, when you consider the potential risks for taxpayers as a result of the legal agreements entered into by the previous government, it wouldn’t make sense to put taxpayers as risk.

With the changes we have managed to achieve, we have shifted the risk from ratepayers and from taxpayers – so it makes sense that we continue with the agreements that were signed in good faith.

Now that the UARB has given the Maritime Link project a green light – and with these final actions of our government – the remaining conditions required for federal loan guarantee will be met through legislation, which this House will be able to debate.

Mr. Speaker, I want to take this opportunity to say we appreciate the efforts of our federal colleagues who worked diligently with us  and project proponents to finalize the necessary agreements.

With the Federal Loan Guarantee, Nova Scotians will benefit from significant cost savings. As we said last year, if the project were to proceed we must have the loan guarantee.

Today, I also launched a micro-website on the Department of Energy portal to answer questions of the public on what is different about this deal and to provide information about the Board’s decision and how our conditions were met.

I know the public has questions about cost, risk, the mechanics and the opportunities.

Many of the questions will be answered on this website.

It is important to me that Nova Scotians are given answers to their questions. Nova Scotians deserve answers the most complete answers we can give.

As questions come in we will answer them in as timely a fashion as we can.

This project is just one aspect of our energy future.

The work does not stop here. I will be discussing the possible advantages of regional cooperation on grid and other energy issues at the upcoming meeting of Atlantic Energy Ministers. It’s important to note that the potential benefits of this to ratepayers are predicated on the Link and the competitive environment.

We will soon begin a very significant consultation and review process – the first in 13 years – on what Nova Scotians expect and need from their electricity system. The bill I introduced last week is only an early part of electricity future.

My vision is an energy future where Nova Scotians have greater choice; where ratepayers come first and have a direct role in determining our energy future. 

Thank you.