Emera CEO Scott Balfour told CBC News the company is now reviewing capital spending, starting with the Atlantic Loop – a proposed multibillion-dollar energy corridor to connect the four Atlantic provinces with hydropower from Quebec and Labrador. The Atlantic Loop is a key part of the strategy to wean Nova Scotia off its reliance on burning fossil fuels to generate electricity. “This is one of the first projects that we’ve said to the team that, you know, we need to stop for now,” Balfour told CBC News. “There’s not enough money to continue to pursue this, let alone be able to go to the investment community and say, you know, please invest more money in Nova Scotia to enable a project like this. kind of scale”. Emera is responding to changes to the provincial Public Utilities Act introduced this week by Nova Scotia’s Progressive Conservative government. The legislation caps electricity rate increases at 1.8 percent for two years — money that must be spent on operations and maintenance. Fuel costs will continue to flow to customers. Scott Balfour is CEO of Emera, the parent company of Nova Scotia Power. (CBC) The amendments also limit the guaranteed rate of return to 9.25 per cent, ensuring that all excess profits are returned to ratepayers to reduce their costs and limit the interest Nova Scotia Power can charge ratepayers. The amendments preempt — or “knee,” in Balfour’s view — an ongoing Nova Scotia Utility and Review Board hearing on Nova Scotia Power’s first flat rate application in a decade. The company is targeting growth of 13.7 percent over two years, with fuel costs soaring to yet-to-be-determined heights in 2024 and 2025.

“Very new area”

Board members were due to issue a decision on the complex case in the new year. “This is very new territory in North America for a government to be able to interfere with an independent regulatory process, and I am deeply concerned,” Balfour said. In a release this week, Emera said the amendments will result in a “substantial reduction” of the roughly $1 billion in capital spending that Nova Scotia Power plans in 2023 and 2024. “The reductions imposed by this legislation will hinder the ability of Emera and NS Power to promote clean energy investment in the province, which was specifically required to meet the joint 2030 decarbonisation targets. This includes planned investments such as wind power generation, grid-scale batteries and improvements to the inter-provincial transmission system,” said Emera. Exactly where Emera plans to cut will become clear on Nov. 11, when the company releases its three-year capital spending plan on a call with investors. To immediately reduce costs, the utility has eliminated 60 new reliability-related jobs outlined in Nova Scotia Power’s 2022 general charge application. Emera shares fell nearly five percent on Wednesday when the rate cap was announced. The stock fell another three percent on Thursday, closing at $49.99 a share “While the political intervention in the NSPI warrants a stock price correction, we view the -5% decline as an overreaction,” BMO analyst Ben Pham wrote Thursday morning.

The future of Emera in Halifax

Based in Halifax, Nova Scotia Power generates just 15 per cent of Emera’s profits. Balfour did not directly answer when asked if Emera would remain in the province. “It’s impossible not to view our continued investment and growth in Nova Scotia today any differently than we did,” he said.
“Nova Scotia remains our home, but our focus in terms of future growth and job creation and all those things, necessarily outside of this legislation is going to be increasingly focused elsewhere.”

Politicians react

Meanwhile, at Province House in Halifax, where the amendments looked set for easy passage, politicians from all three parties dismissed Emera’s warnings. Asked by a reporter “if it would be a bad thing if Emera left Nova Scotia”, Opposition Leader Jack Churchill replied: “I don’t know, I mean that might just be posturing”. Prime Minister Tim Houston was also a moron. Premier Tim Houston said his focus is on rates. (CBC) “The company can respond the way they respond, but my only concern is the ratepayers,” he said Thursday. “Well, reliability, fair prices — that’s what concerns me, that’s what concerns me. What other people say about it doesn’t concern me or concern me,” he said. Houston also said Emera’s presence in this province “is significant.”