Muskrat Rises

Danny Williams and Darrell Dexter at the Muskrat Falls announcement.

Laurent Le Pierrès, in his Chronicle Herald editorial on the Muskrat Falls hydro project, reasoned away many of the concerns around the electricity plan Darrell Dexter signed with then Premier of Newfoundland Danny Williams.

The fact of the matter is that the price of coal has jumped 70 per cent over the past eight years… The only way to change reality is to alter the facts on the ground.

At the moment, the advent of renewables is cumulatively adding one to two per cent annually to power rates. But the cost of doing nothing is not nothing. Clinging to coal is like staying on an escalator; at least with renewables, you will hit a plateau.

There are hidden benefits, too. The less NSP spends on foreign coal — $250 million a year as it now stands — the more it invests in the local jobs that go with renewables. The utility’s economic footprint in Nova Scotia will keep growing since it is required by law to hit a target of 40 per cent renewables by 2020.

This will be difficult to do if the plan to import hydro power from Labrador via subsea cable does not proceed. In terms of energy, Muskrat Falls would deliver to Nova Scotia not only the equivalent of one coal-fired unit, but a stable, fixed-cost supply for 35 years.

One issue not tackled in Le Pierrès’ editorial is why Emera does not import hydro electricity from Quebec instead.

For that to work, there would need to be substantial upgrades to New Brunswick’s energy grid and a far greater capacity built into the transmission link between that province and Nova Scotia. Building better capacity between NS and NB is also part of the Maritime Link plan with Newfoundland to ensure Nova Scotia is not “an energy island,” but the transmission link right now is not effective.

Currently, our province can bring in a couple hundred megawatts from New Brunswick, as long as Moncton does not require that energy during their hours of peak energy usage. But inefficiencies in the transmission system mean that although the distance to Newfoundland is longer, there is no significant “line loss” in hydro supplied by Muskrat Falls.

The high voltage direct current from a Newfoundland cable to Cape Breton would mean Nova Scotia Power would not need to buy 10% more energy then it needs to keep your lights on. Line loss from New Brunswick requires Nova Scotians to buy that extra energy lost during transmission.

Energy from Muskrat Falls will account for about 10% of Nova Scotia’s electricity needs, supplied at a firm rate for 35 years, and provided during Nova Scotia’s 16 peak-usage hours.

The agreement with Newfoundland also gives Nova Scotia Power the ability to purchase another 10-15% of our province’s electricity needs at competitive prices instead of that power going to New England markets.

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No Snap Election

We expected electricity prices to dominate the fall session of the Nova Scotia legislature after the Liberals released their attack ad over the summer. The NDP have returned fire early, launching a pre-legislation rocket at the opposition’s electricity plans with their new website Lowest Fairest Rates.

The site asks Nova Scotians to sign up to show their support for a “clean energy future” and speak out against “Stephen McNeil’s expensive electricity experiment.”

Reminding Nova Scotians who expected the NDP to be perfect that the opposition could be perfectly awful is a smart tactic by the governing party.

Stephen McNeil electricity

The campaign against Stephen McNeil’s electricity plan: http://lowestfairestrates.ca/

The Liberal Caucus called Lowest Fairest Rates another sign of “a snap fall election.” It is not. As every government announcement is dismissed by the opposition as electioneering, watch for the press gallery to find that Liberal line stale. Stephen McNeil’s team should be careful what they wish for – if an election were close, the press would have to ask the opposition tough questions.

Power Play

We expect electricity prices will remain an important part of politics this fall, and think the NDP and the Conservatives can both score points on this issue from the left and right wings as the Legislature begins its session.

Stephen McNeil is in over his head on energy policy, and that gives Darrell Dexter and Jamie Baillie room to move on the issue.

Putting the HST back on home heating, making dangerous promises in their TV attack ads, and fighting Efficiency Nova Scotia’s independent status – McNeil’s power plan would make their worst moves on energy since the Liberals started to tax electricity.

Jamie Baillie can make up the ground he lost if his Conservatives downplay their odd attacks on renewable energy and continue to focus on the UARB instead. Tilting at windmills was a major error by the NSPC.

Darrell Dexter, by announcing legislation limiting power rate increases and executive bonuses, proves the NDP is no friend of Nova Scotia Power. And by negotiating a greenhouse gas reduction agreement with the federal government, the NDP to will save ratepayers from paying $1.3 billion.

The Liberals have worked hard to make power bills the defining issue of 2012. Unfortunately, their leader’s plan comes dangerously close to qualifying as a prank instead of a policy plank.

Stephen McNeil’s Brownout, Part II

Stephen McNeil is in over his head on energy policy.

The Nova Scotia Liberals, convinced an election is imminent, are running a commercial saying they will “break Nova Scotia Power’s monopoly”. As we have written before, opening up the electricity market to competition sounds good. Unfortunately, as California has seen, there is risk. Free-market competition – viable for awhile in California – ended in brownouts and bankruptcy.

As Darrell Dexter pointed out in the Chronicle Herald:

Deregulation has been a disaster everywhere it’s been tried. In Ontario, the Harris-Eves government was forced to back off of its plan to deregulate after power rates rose 30 per cent in seven short months — in some cases up to 70 per cent. A scrambling government put taxpayers on the hook for $480 million of a $1.36-billion artificial price cap. Ontario became a net importer of electricity.

While the some Liberals protested that they never actually used the word ‘deregulation’, their plan is either that, or nothing much at all. McNeil should leave talking about electricity to MLA Andrew Younger, who has a better grasp of the issue.

We asked readers to send us their opinions on Stephen McNeil’s electricity plan. Here are the best three:

Will the Liberals’ commercial actually backfire on the party as people take a closer look at Stephen McNeil’s leadership capabilities? As conservative Rob Batherson pointed out, when McNeil repeatedly makes comparisons to telephone deregulation and electricity monopolies, he invites the conclusion of deregulation.

Is this the chance for Baillie to differentiate himself from McNeil? Both ramp up rhetoric against unions, both criticize the move to renewable energy, both suck up to the Fraser Institute. But Banker Baillie on the pocketbook issues would clean the Liberal’s clock.

The Liberals electricity plan will cost us dearly. No one likes Nova Scotia Power. Not the NDP, not the Liberals, not the Tories who privatized it in the first place. But adding to that mistake is not an option. The only one way to get cheap power is to move from expensive coal to stable renewable energy.