Credit ratings agency warns against 'political interference' in Nova Scotia Power rate applications

Nova Scotia Energy Minister Trevor Boudreau says officials in his department will review all relevant information as they prepare to move forward with an election campaign promise to cap the amount power rates in the province are allowed to increase.

The comments come after a report from a credit ratings agency warned that political interference in the Nova Scotia Utility and Review Board process could lead to a rating downgrade for Nova Scotia Power.

"They've expressed their opinion on it," Trevor Boudreau told reporters on Thursday following a cabinet meeting.

"We take all of that into consideration but, at the end of the day, this is about affordability for Nova Scotians."

In the last provincial election, the Progressive Conservatives pledged to create new criteria the utility and review board must consider when weighing an application from Nova Scotia Power for a rate increase. The new cap would keep an increase from exceeding the average of increases across the country.

Rating agency warns against 'political interference'

But in a release last month in which Morningstar DBRS confirmed Nova Scotia Power's credit rating and said trends are stable, the agency also said it "remains concerned about potential political interference in the next regulatory review process."

"Should legislation be enacted by the province that, once again, diminishes the NSUARB's independence and affects the company's ability to fully recover its costs in its next general rate application (GRA), a negative rating action would likely occur."

Legislative intervention by the PCs during their last mandate with the intention of limiting rate increases resulted in a downgrade of Nova Scotia Power's credit rating, which in turn increases the utility's borrowing costs. Those costs get passed on to ratepayers.

In 2023, the province had to loan Nova Scotia Power $117 million to help with the cost of fuel and limit rate increases. Last year, the federal government announced a $500-million bailout that also helped the utility minimize rate increases while addressing unrecovered fuel costs.

NDP want universal power rate

NDP Leader Claudia Chender said the government has a history of making "short-term political decisions" around power rates that have "potentially disastrous long-term consequences."

She said her party has been calling on the government for years to make the necessary legislative changes to allow for a universal power rate, a rate that would be applicable for low-income customers.

"They've refused to act on that and yet they are willing to go forward and jeopardize the credit rating of the agency, which doesn't really help anyone," she told reporters.

"We need this government to get serious about making sure that everyone can afford power."

Need for 'a healthy debate'

Interim Liberal Leader Derek Mombourquette said interfering in what is supposed to be an independent process tends to have negative consequences for customers of the utility. He encouraged the government to have "a healthy debate" before pursuing its election promise.

Boudreau said officials in his department are looking for "the best path forward" as members of the public struggle with the cost of living.

"It's early days on this. We're evaluating, we're digging in, we're looking into what this looks like and how to best move forward with it."

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