HALIFAX – Nova Scotia’s premier promised Wednesday he would introduce regulatory changes if necessary to ensure that the province’s utility regulator has the authority to review the subsea link of the proposed Muskrat Falls hydroelectric project.
Darrell Dexter’s commitment came hours after the Utility and Review Board’s chairman said it would only be able to examine the subsea link if a utility it regulates, such as Nova Scotia Power, were to file an application for review.
Peter Gurnham told the legislature’s public accounts committee that in the case of the $1.2-billion subsea link between Newfoundland and Nova Scotia, that would likely involve an application from the private utility company — not its parent company, Emera (TSX:EMA), which is beyond its jurisdiction.
“If it’s to be built by somebody else … then we would not have the jurisdiction to look at it,” Gurnham told the committee.
Emera would fund the 180-kilometre link between Cape Ray, N.L., and Lingan, N.S., if the $6.2-billion venture in Labrador is sanctioned.
A spokeswoman for Emera declined to reveal details of how the company plans to proceed, but said an application for reviewing the subsea link would be submitted.
“I can absolutely promise you today that the Maritime link project will go through a regulatory process before the Nova Scotia Utility and Review Board,” Sasha Irving said.
After his committee appearance, Gurnham said he received a briefing from Emera officials when a term sheet to develop the project was announced in late 2010 and they told him Nova Scotia Power would build the link.
Gurnham said he has no indication of when that would happen, though the board has begun discussions with consultants about who would assist if an application for review is filed.
But Liberal committee member Andrew Younger said Gurnham’s comments should raise concerns because if the subsea link is built by an entity other than Nova Scotia Power, the board would not get a chance to scrutinize it as Dexter has said it would.
“It matters because if it’s not Nova Scotia Power, it won’t be scrutinized by the board,” Younger said.
Progressive Conservative member Chris d’Entremont expressed similar concerns and said he wasn’t assured the process would protect Nova Scotia customers.
“Emera could end up being sort of the fuel guy and at the end of the day Nova Scotia Power will ask for it’s rate increase to pay for it,” he said. “And that means Nova Scotians would end up paying far more than they should.”
But Dexter said the government would ensure that a hearing was held before the board.
“If it requires that there is regulatory change to ensure that the project comes to the Utility and Review Board we will see that is done,” he told the legislature.
Last month, the Newfoundland and Labrador Public Utilities Board said it couldn’t assess whether it would cost less to ship electricity from Muskrat Falls to Newfoundland than if the island were to generate its own energy.
The board said it didn’t have enough information and cited gaps in the reliability of the development.
Gurnham said he hoped the same wouldn’t happen if Nova Scotia were to conduct its own review.
He said Newfoundland’s regulator was constrained in that it could only examine Muskrat Falls against one other energy alternative.
“I hope and expect that we will be given our normal mandate … to make whatever inquiry we think we need to make,” said Gurnham.