Emera refuses to cut shareholder returns for 'grossly overestimated' Maritime Link
The transmission system was completed 3 years ago but no electricity has flowed to N.S.
The parent company of Nova Scotia Power has rejected a request from regulators to voluntarily reduce shareholder returns on the $1.5-billion Maritime Link, instead announcing a donation to the Salvation Army as compensation over delays.
The Nova Scotia Utility and Review Board had urged Emera — through its affiliate Nova Scotia Power Maritime Link — to lower its nine per cent rate of return because the project has failed to deliver promised benefits.
The transmission system was completed three years ago to import hydroelectricity from the massive turbines at Muskrat Falls in Labrador.
Nova Scotia Power customers have been paying for it since 2018 even though no electricity has flowed into the province because of delays in Newfoundland and Labrador.
"Given the gross overestimation of the benefits of the Maritime Link versus the actual benefits ... and given the costs of the further delays caused by COVID-19, which are being entirely borne by ratepayers, the board believes it very reasonable to ask [Nova Scotia Power Maritime Link] to reconsider its position," the utility and review board wrote on Nov. 30.
The board gave Emera one week to respond.
A donation instead
In a filing to the review board Monday, Nova Scotia Power Maritime Link said it had come up with "an alternate response that would provide immediate relief for those customers most affected by COVID-19."
The company said it would donate $1.5 million to the Home Energy Assistance Top-up program administered by the Salvation Army.
"The donation to the HEAT fund reflects our shared concerns with the UARB [utility and review board] about the impact that COVID-19 has had on Nova Scotia customers, including the further COVID-19-related delays experienced by Nalcor Energy that are impacting the timely delivery of clean energy through the Maritime Link," company CEO Rick Janega said in a statement to CBC News.
"We believe that donating $1.5 million through the Salvation Army's Heat fund is an effective and immediate way to reach those most in need in the province while respecting the integrity of the regulatory framework governing the Maritime Link."
An unusual request
The review board has not filed a response to the donation.
Consumer advocate Bill Mahody, who represents more than 400,000 residential power customers — said he needs time to study the mechanics of the donation versus the rate of return reduction.
The unusual request from the regulator to lower the rate of return was contained in an order to charge Nova Scotia Power ratepayers $172 million for the Maritime Link in 2021. The $172-million recovery from ratepayers has already been factored into rates, so it will not have an impact on customer bills.
Lawyers representing the utility's residential and large industrial customers had asked for a reduction in the amount of money Emera will earn on the Maritime Link.
The review board said it could not unilaterally order a cut in the rate of return because no evidence on the issue was introduced in the proceeding to determine Maritime Link costs for 2021.
The rate of return reduction — by 0.25 per cent — would have cost shareholders $1.4 million next year.
The Maritime Link will provide long-term benefits to Nova Scotia Power ratepayers as the conduit for clean electricity.
The system includes overhead transmission lines in Newfoundland and two 200-kilovolt electrical submarine cables across the floor of the Cabot Strait. They are each 170 kilometres long and weigh 5,500 tonnes.
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