Emera puts clean energy projects in Nova Scotia on hold after rate cap

Emera Inc. is putting capital spending on clean energy projects in Nova Scotia on hold as it works through the consequences of the Nova Scotia government's imposed rate cap on the parent company of Nova Scotia Power.

In a conference call to discuss the power utility's latest financial results, Emera chief executive Scott Balfour said Friday that while the company will continue to make investments in safety and reliability of its network, it won't be able to spend on other projects in the province due to the cap.

"The last capital plan included $500 million in planned investment in the Eastern Clean Energy Initiative, including the Atlantic Loop, to fund new wind generation, transmission, infrastructure upgrades and battery storage to help facilitate the transition away from coal-fired generation," he said.

"Given the restrictions imposed by Bill 212, these cleaner energy investments have been forced to be put on hold as our capital investments at Nova Scotia Power are now required to only focus on maintaining system reliability."

The Atlantic Loop is a proposed $5-billion transmission megaproject, which would give the region more access to Labrador and Quebec hydroelectricity.

The company had applied for a nearly 14 per cent rate hike over two years with the provincial regulator earlier this year, but the province stepped in and passed legislation to limit the power rate increase to 1.8 per cent over the next two years, excluding increases linked to fuel costs.

The changes to the Public Utilities Act also took aim at the utility's profit by preventing the regulator from approving a rate of return on equity any higher than 9.25 per cent, compared with the up to 9.5 per cent requested by Nova Scotia Power.

Nova Scotia Premier Tim Houston said last month on Twitter his government would "take the necessary steps to protect you from unfair rate increases while helping to ensure your lights stay on."

However, Emera says the restrictions means it won't be able to invest in what it called decarbonization efforts in Nova Scotia even as it does so elsewhere in its business.

"We remain deeply concerned about the long-term impacts of this legislation to Nova Scotia Power customers as it delays the clean energy transition and will ultimately result in higher, not lower, costs for customers," Balfour said.

Both Nova Scotia and New Brunswick have committed to phasing out their coal-fired generation by 2030, while Nova Scotia has enshrined in law its goals to reduce greenhouse gas emissions to at least 53 per cent below 2005 levels by 2030 and to achieve net-zero emissions by 2050.

The comments by Emera came as it reported a third-quarter profit of $167 million or 63 cents per share, compared with a loss of $70 million or 27 cents per share in the same quarter last year.

Operating revenue totalled nearly $1.84 billion for the quarter ending Sept. 30, up from nearly $1.15 billion in the same quarter last year.

On an adjusted basis, Emera said it earned 76 cents per share in its latest quarter, up from an adjusted profit of 68 cents per share in the third quarter of 2021.

Balfour said the growth in the company's earnings was principally driven by continued strong performance from its utilities in Florida.