Emera donation cannot be funded by Nova Scotia Power customers

Government regulators have ruled Nova Scotia Power (NSP) customers will not pay for a $1.5 million donation made by the utility's parent company,Emera.

The energy conglomerate had promised to make a one-time donation to the Salvation Army rather than lower profits it's making on the underutilized Maritime Link.

On Wednesday, the Nova Scotia Utility and Review Board said "if made, [the donation] must not be funded by ratepayers."

Why Emera was asked to take less

Last month the review board asked Emera to voluntarily lower the nineper cent return it earns on the Maritime Link because the mega project has failed to deliver promised benefits.

An Emera subsidiary Nova Scotia Power Maritime Link has spent $1.55 billion to bring electricity into the province from the Muskrat Falls hydro project in Labrador.

The system includes overhead transmission lines in Newfoundland and two 170 kilometre subsea cables across the floor of the Cabot Strait between the provinces.

The Maritime Link was completed on time and on budget in late 2017 but hydro has yet to flow into Nova Scotia because of multiple delays and failures at facilities that are the responsibility of Newfoundland partner, Nalcor.

Ratepayerswith NSP, however, have been paying for the Maritime Link since it went into service even if the promised clean, green electricity did not materialise. Ratepayers were charged $109 millionin 2018, $115 millionin 2019 and $144 million in 2020.

The review board was considering how much to charge NSP ratepayers for the Maritime Link in 2021 when the request for a cut in the rate of return was proposed.

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In an interim ruling that approved a $172 million charge next year, the review board said it could not unilaterally lower Emera's profit on the project because evidence on the issue was not before it during the proceeding.

The suggestion came from lawyers representing NSP residential and industrial customers.

However, the regulator said a reduction in profits was "reasonable"because Emera had "grossly overestimated" benefits from the Maritime Link during the inactive period when no electricity from Muskrat Falls was flowing.

Emera says no thanks

Emera refused the request to voluntarily lower its nine percent rate of return by 0.25 percent saying it had already been approved and it did not want to tamper with the integrity of the regulatory process.

Still, in recognition of delays and the review board's concerns, it made a one time $1.5 million donation to the Salvation Army.

On Wednesday the board issued final approval for Maritime Link costs to be charged to NSP.

The last line ensures ratepayers do not fund the donation.

The $172 million overall charge will not affect power bills because the costs have been factored into rates.

The order also continues an order that Emera holdback $10 million it gets from NSP next year in case the Link does not generate at least that much economic benefit for Nova Scotia Power customers.

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