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Consumer advocate, Emera clash as Muskrat Falls hearings begin in Nova Scotia


 

HALIFAX – Nova Scotia’s consumer advocate and Emera (TSX:EMA) clashed Tuesday on whether Muskrat Falls is the cheapest way for the province to get electricity at the opening of a regulatory hearing on the hydro project.

Nancy Tower, CEO of Emera Newfoundland and Labrador Holdings, told the Nova Scotia Utility and Review Board that the $1.5-billion subsea connection is the most affordable source of energy over the next four decades.

“We have a solution, and one that is not simply a solution, but also an opportunity,” she said.

“An opportunity to fundamentally change our electricity market for decades to come and to provide more stable priced energy for Nova Scotia customers.”

A spokesman for the provincial Department of Energy said the power from Muskrat Falls is the only alternative before the board that meets the government’s goals to reduce greenhouse gas emissions.

But John Merrick, the province’s consumer advocate, said Nova Scotia would be better off not locking into one project for 35 years.

He said the price for electricity from Muskrat Falls is largely based on the cost of constructing the 180-kilometre link, and it’s likely this will be more expensive than other sources of power.

“The consumer advocate has carefully considered the evidence and has come to the conclusion that the application should be dismissed,” he said.

“The ratepayers incur the risk of paying significantly in excess of market (prices).”

Merrick also said if the board dismisses the project, it doesn’t necessarily mean the development will die as it may still be attractive for Nalcor Energy, Newfoundland and Labrador’s Crown utility, to build the link.

Nelson Blackburn, the small business advocate, said it’s clear that the deal will benefit Emera but it hasn’t been proven to be the cheapest long-term source of energy for customers.

Both the Liberal and Progressive Conservative opposition parties also argued the proposal should be rejected due to uncertainties over the future availability of Muskrat Falls electricity at market rates, rather than rates based on the cost of the project.

However, Tower said Emera Newfoundland and Labrador has looked at other options, ranging from wind to importing power from Hydro-Quebec, and found they are not reliable or cheaper.

She said Emera does not believe Hydro-Quebec would provide a long-term, fixed price for energy, nor does it think a firm contract for surplus energy from Nalcor is necessary because Nova Scotia can purchase power from a variety of sources.

“When surplus energy, beyond Nalcor’s domestic needs, is flowing across the province and through New Brunswick to the New England market, we can purchase energy from New Brunswick or Hydro-Quebec or Nalcor,” she said.

“Being located in the middle of the energy market instead of at the end of it is a clear benefit of the Maritime Link project.”

The hearings are scheduled for the next two weeks.

Construction of Muskrat Falls is underway in Labrador and proponents of the $7.7-billion venture are aiming to generate power by 2017.


 
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