A Maine energy consultant sees the multibillion-dollar Lower Churchill hydroelectric project benefiting the Atlantic region but also carrying risks that are greater in Newfoundland and Labrador than in Nova Scotia.
Gordon Weil also says ratepayers would be better protected against risks because of the review that the Nova Scotia Utility and Review Board will do of Emera’s part of the agreement.
“The regulator will be able to impose protection for Nova Scotia customers in the event of cost overruns or other departures from the plan,” Weil wrote in a report for the Atlantic Institute for Market Studies released Tuesday.
“It will also be able to determine if the project is sound and, in regulatory terms, ‘prudent.’”
Emera, Nova Scotia Power’s parent company, is working with Nalcor, Newfoundland and Labrador’s Crown energy corporation, on the development and transmission of hydroelectric power from Labrador to Cape Breton.
Emera is responsible for the Maritime Link, running from Newfoundland to Cape Breton. The estimated $1.2-billion cost of the link and $6.2-billion overall cost of the project have risen, but the amounts aren’t yet known.
Weil said the unknown costs and giving up transmission space in New Brunswick and New England are risks for Emera, being the minority partner, but it can make a reasonable argument that the benefits are worth it.
Chief among them would be a connection all the way to Quebec, from which it could purchase more clean hydroelectric power, said Weil.
“I think Emera has reached the conclusion that in backing off coal-fired units, it’s going to have to be buying power from outside of the province and, obviously, it wants access to the widest array of potential suppliers, and this project does it for Emera,” Weil said in an interview.
“Emera is no longer the end of the line; it’s in the middle of the loop.”
Emera spokeswoman Sasha Irving agreed that that is a key part of the deal, particularly with a federal government requirement to reduce reliance on coal-generated power.
She said that will mean buying more from outside the province, despite the increase in renewable sources within the province.
“This will allow us to have a more cost-effective way of purchasing,” Irving said.
More details about the mega-project are expected to become public this fall.
Emera expects to file its application to the review board in Nova Scotia. In Newfoundland and Labrador, consultant Manitoba Hydro International is expected to complete reviews of cost projections and energy alternatives, and Premier Kathy Dunderdale has said there will be debate in the legislature.
Weil said the regulatory review that will take place in Nova Scotia is important and something that’s missing from the process in Newfoundland and Labrador.
He said Nalcor is hiring independent consultants, but the project isn’t getting the same type of scrutiny it would before a regulator, which would usually hear from opposing experts.
Nova Scotia Energy Minister Charlie Parker released terms for the review board Friday. He said Emera will have to show the project is the best long-term option for power needs in the province.
The Progressive Conservatives question whether the government has given the review board the latitude to do that.
Weil said Atlantic Canada could benefit from new energy connections through “more economic use of generating resources, reduced (greenhouse gases) and a more efficient use of transmission.”
Weil also argued in his report for an Atlantic power pool, which would include a single transmission tariff, and having an independent manager in charge of moving power from different generating sources.