Soaring electricity bills become key issue in Nova Scotia election race

HALIFAX – While it may be true that the typical provincial election focuses on jobs, the economy and leadership, another theme emerged as a key issue during the first week of the Nova Scotia election campaign: rising electricity rates.

And it’s not hard to see why.

The province’s residents pay among the highest power bills in the country, and the private company that generates most of the electricity, Nova Scotia Power Inc., has posted higher profits every year since 2009 — the same year the New Democrats were elected to govern the province for the first time.

On the doorstep, candidates are getting an earful about electricity.

“I know there’s frustration out there, worry about the rising cost of electricity,” says Energy Minister Charlie Parker.

That might be an understatement.

Last year, there was public outrage when the utility sought another rate increase and ratepayers learned the compensation package for Nova Scotia Power CEO Rob Bennett had risen 23 per cent to $1.15 million. Then, a day after the rate application, utility executives threw themselves a party on the Halifax waterfront.

Halifax columnist Gail Lethbridge captured the seething sense of public anger: “It’s too bad Nova Scotia Power couldn’t attach a turbine to the steam that came blasting out of people’s heads.”

It’s the kind of pocketbook issue that can be lethal for the party in power, and the opposition Liberals and Progressive Conservatives know it.

For Liberal Leader Stephen McNeil, the perceived front-runner in the campaign leading to an Oct. 8 vote, the solution can be summed up in one voter-friendly phrase: “A Liberal government will break Nova Scotia Power’s monopoly.”

Progressive Conservative Leader Jamie Baillie has another approach: a five-year rate freeze.

As for NDP Premier Darrell Dexter, his majority government has committed the province to getting 40 per cent of its electricity from renewable resources by 2020, setting one of North America’s most aggressive green energy targets.

Though the premier admits there are added costs to shedding the province’s reliance on coal-fired plants, Dexter says the long-term payoff will be stable rates and more green jobs.

The centrepiece of his strategy is the $1.5-billion Maritime Link, which involves construction of undersea cables that will deliver electricity from the Muskrat Falls hydroelectric project in Labrador.

Nova Scotia’s opposition parties both support the project, but the Liberals and Conservatives say the deal is flawed because Nova Scotians still don’t know how much they will be paying for the electricity.

David Stuewe, a business professor at Dalhousie University in Halifax, says the government is on the right track.

“Renewable energy strategies can start to pay some long-term benefits,” he says. “Nobody has really said they’re not in favour of Muskrat Falls. And the public understands that we have to deal with this problem.”

Meanwhile, the Dexter government is taking aim at the opposition proposals, focusing most of their barbs at the Liberal plan to break the utility’s monopoly.

The NDP’s Parker says deregulating the market and splitting the utility into smaller units has failed in other provinces. More importantly, he says, there’s no guarantee the Liberal plan will lead to lower rates, and he accused McNeil of plotting to import more expensive energy from Quebec.

“They want to hitch our wagon to Hydro-Quebec, one of the largest utility monopolies in the world,” Parker says.

Liberal energy critic Andrew Younger says the only thing his party has said about Quebec is that Nova Scotia failed to properly consider its energy supply as a low-cost option.

“If they want to pander to the lowest common denominator by stoking anti-Quebec feelings, that’s fine,” he says.

And when it comes to breaking the monopoly, Younger says the plan doesn’t involve splitting up Nova Scotia Power or deregulating the market.

Instead, the Liberals say they simply want to make it easier for private renewable energy firms to build infrastructure and sell electricity directly to consumers.

The problem with the Liberal plan, say the Tories, is that it has already been discarded as a failure in New Brunswick. They cite a November 2011 study that found a competitive market had not developed as expected and power rates had gone up.

Stuewe, an expert in business-government relations, says the Liberal pledge to break the monopoly resonates on the doorstep with angry voters, even if details of the plan remain murky.

“It’s a simple emotional issue in the way it is being presented,” Stuewe says. “But the delivery of (this promise) is very complex.”

Baillie says the Liberals aren’t committed to breaking up a monopoly.

“That’s the great lie in their plan. NSP would still own 100 per cent of distribution and transmission and 90 per cent of the generation and half of all the wind projects.”

As for Baillie’s proposed rate freeze, both the NDP and Liberals say it won’t work because the cost of fuels used to run Nova Scotia Power’s generating plants will continue to rise, creating deferred costs that have to be paid at some point.

Baillie says a Tory government would force Nova Scotia Power to swallow those costs.

The NDP warns that such a move would imperil the Nova Scotia Power’s finances, but Baillie says the rate freeze won’t cost the company much because he would delay the province’s renewable energy deadline by five years, creating big savings for the utility.

“Slowing down the conversion to renewable energy may not be politically correct but it is the smartest thing we can do to stop the increases,” Baillie says.

Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.