Nova Scotia’s leaders unveiled an energy development blueprint Wednesday that calls for creating a new Department of Energy, gradual introduction of electric competition, and a variety of new measures that will apply to offshore oil and gas projects.
Electricity rates will remain regulated and subject to public input through the Utility and Review Board (UARB) hearings, said Ernst Fage, minister of natural resources, but Nova Scotia Power Inc., the utility unit of Emera Inc., would no longer have a monopoly over electric generation. The UARB will call for competitive bids when it determines more generation capacity is needed.
The six provincial municipal utilities will be freed up to buy electricity from anyone, meeting US regulatory standards required for the Canadian province to participate directly in US markets. Fage said the change will set the stage for direct exports to the US.
Premier John Hamm called the proposal a “careful, measured response to those who asked for limited competition in the electrical industry.” He said it would support export opportunities and renewable energy development.
Over the long-term, competition is expected to encourage new businesses to build new generating capacity in Nova Scotia for export, according to the document. It calls for a number of actions to increase competition and encourage use of renewable energy, including:
— Establish an electricity marketplace governance committee to recommend to the minister of energy the development, structure, and rules for the electricity sector in the future.
— Give policy direction for the UARB to authorize open access transmission on Nova Scotia Power’s facilities for all generators selling to wholesale markets or export markets.
— Assist the development of an independent power producers’ renewable sector by permitting access to Nova Scotia Power’s transmission system for green power customers. Set a target of 2.5% or 50 Mw for new renewable generation.
— Take steps to meet US reciprocity requirements to export electricity.
— Encourage use of indigenous coal and work to support an appropriate role for coal.
— Work with Nova Scotia Power to retrofit or replace generating systems.
— Reduce sulfur dioxide emissions by 25% by 2005, and 50% by 2010. Reduce nitrogen oxide emissions by 20% by 2009.
Nearly 80% of the Nova Scotia Power’s electric generating capacity is coal-fired by plants with 5-30 years of remaining economic life. Fage said the plants will likely be allowed to operate for their useful economic life. “With clean coal technologies it may be economic to extend their life,” he said.
The proposed changes are not intended to affect the present price advantage Nova Scotia has over competitors in the northeastern US, according to the blueprint. Hamm said the new energy department is expected to be in place for the 2002-2003 fiscal year.