Credit ratings agency warns against ‘political interference’ in Nova Scotia Power rate applications

Nova Scotia Energy Minister Trevor Boudreau has announced that his department will be thoroughly reviewing all relevant information as they prepare to fulfill an election campaign promise to cap the amount power rates in the province are allowed to increase. This decision comes in light of concerns raised by a credit ratings agency regarding potential political interference in the Nova Scotia Utility and Review Board process, which could lead to a downgrade in the rating of Nova Scotia Power.

Speaking to reporters after a cabinet meeting, Boudreau acknowledged the agency’s concerns but emphasized that the primary goal is to ensure affordability for Nova Scotians. The Progressive Conservatives had pledged in the last provincial election to introduce new criteria for the utility and review board to consider when evaluating rate increase applications from Nova Scotia Power. The proposed cap would prevent any increase from exceeding the national average.

However, the credit ratings agency, Morningstar DBRS, expressed apprehension about political interference potentially impacting the regulatory review process. The agency warned that any legislation diminishing the independence of the NSUARB or affecting the company’s ability to recover costs could result in a negative rating action. Past legislative interventions by the PCs had led to a downgrade in Nova Scotia Power’s credit rating, increasing borrowing costs that were ultimately passed on to ratepayers.

In response to the concerns raised, NDP Leader Claudia Chender criticized the government for prioritizing short-term political decisions over long-term consequences, advocating for a universal power rate that would benefit low-income customers. Interim Liberal Leader Derek Mombourquette echoed the sentiment, emphasizing the negative impact of interfering in an independent process on utility customers. He called for a “healthy debate” before pursuing the election promise.

Boudreau assured that his department is evaluating the best course of action to address the cost of living challenges faced by the public. It is still early days in the process, and officials are actively exploring options to move forward effectively.

In conclusion, the issue of capping power rate increases in Nova Scotia is a complex one that requires careful consideration to balance affordability for residents with the financial stability of Nova Scotia Power. It remains to be seen how the government will navigate these challenges and uphold their commitment to the electorate.