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The Nova Scotia Utility and Review Board (UARB) issued its decision on the Maritime Link compliance hearing on Nov. 29, 2013.
The UARB approved the submission from Emera and Nalcor, stating it met the conditions the Board insisted upon when the project was given a conditional approval in July 2013.
The decision by the Board clears an important step in the construction of a 170-kilometre subsea link between southwestern Newfoundland and Cape Breton Island that would ship hydroelectricity from Muskrat Falls to Nova Scotia.
Most importantly, the UARB's ruling also helps protect ratepayers from undue costs.
"The agreement approved on Nov. 29 is much different and vastly improved from the one originally presented in July," said Nova Scotia Energy Minister Andrew Younger. "There are a number of improvements, including guaranteed access to market priced energy and the fact this project will now help create a competitive energy market in Nova Scotia."
During the hearing, the Government of Nova Scotia submitted eight conditions that had to be included in the final Maritime Link deal in order for the Province to support it. The Board confirmed the eight conditions are met in the ruling, stating:
(Paragraph 132 of decision) ... The Board observes that, as a practical matter, the end result, on a number of issues, is very similar to the conditions proposed by the Province.
"We proposed the conditions to ensure the Maritime Link proponents, Emera and Nalcor shareholders, take on project risks, not ratepayers," said Mr. Younger. "Our first interest has always been the protection of Nova Scotia ratepayers, that's why government pushed to improve the deal. Risks for the project has now been moved from ratepayers to Emera and Nalcor. We look forward to now advancing other important aspects of the project."
The Maritime Link project will provide a renewable and reliable source of energy for the next 35 years and place Nova Scotia in an energy loop. It will also enable greater regional co-operation and enhance opportunities for competition in the marketplace.
The Government of Nova Scotia acted as an intervener during the Maritime Link compliancy hearing, joining other concerned groups and citizens in providing input to the Utility and Review Board (UARB).
On Nov. 18, the Department of Energy submitted a list of eight conditions it requested be included in any approval of the filing by Emera and Nalcor. The eight conditions were designed to further protect ratepayers from the financial risks of the Maritime Link project.
The UARB announced on Nov. 29 that it had approved the compliancy filing by Emera and Nalcor, including in its decision the Provincial Government's eight conditions.
The eight conditions and their location in the UARB decision document are as follows:
Province’s eight conditions – transferring risk from ratepayers to shareholders.
|Paragraph in Decision|
1. Final Agreement vs Current Agreement
Risk to ratepayers if final agreement varies from agreement placed before the Board
|35, 105, 130|
2. Section 3 (e) of Agreement
Risk relating to the possibility that periods of high market prices might not be able to be offset by NSPI.
3. Premium for green attributes
If alternate market price provides a premium for green attributes NSPI will not recover costs from ratepayers.
4. Equivalent Econonic Value re interruption and redelivery
Risk that ratepayers would be exposed to costs arising from Nalcor’s right to interrupt and redeliver energy.
5. NSPI builds wind subject to UARB
NSPI must demonstrate that accessing the Nalcor balancing service is in ratepayer’s best interest otherwise Emera Variance Amount Obligation stands.
6. The determination of compensation under article 7(e)(viii)
Risk that ratepayers would not be fully compensated if Emara and Nalcor did not live up to their commitments.
7. Review of Economy Energy Policies
NSPI commits to review of economy energy policies and procedures through the FAM Working Group.
8. Board has access to information re affiliate transactions, consistent with NSPI’s Affiliate Code of Conduct and the FAM provisions
|56-57, 59-60, 135(b)|