Regulator says N.S. Power cannot demand security from would-be competitor

The Nova Scotia Energy Board has made a decision in a dispute between Nova Scotia Power and an emerging renewable energy company, Renewall Energy. The regulator has sided with Renewall Energy, stating that it will not require the company to provide a letter of credit as requested by Nova Scotia Power.

Renewall Energy holds a license to sell wind energy directly to consumers through Nova Scotia Power’s grid, as part of the Renewable to Retail program established by the provincial government. This program aims to break up Nova Scotia Power’s monopoly and promote the use of renewable energy. Renewall Energy is currently the only participant in the program.

Nova Scotia Power had requested a letter of credit from Renewall Energy to ensure it could recover some of the upfront costs estimated at $6.4 million for connecting new energy providers to the grid. However, Renewall Energy refused to provide the letter of credit, leading Nova Scotia Power to bring the issue to the regulator.

In its decision, the Nova Scotia Energy Board expressed concerns that requiring a letter of credit could deter participation in the program by forcing small renewable energy companies to tie up capital in financial institutions. The board noted that the implementation costs for Nova Scotia Power, while significant, would not have the same impact on the company’s financial situation.

Despite Renewall Energy missing deadlines to start producing electricity, the board granted an extension to its license until December 31, 2026. The company plans to start producing wind energy from its Mersey River project in 2026.

If Renewall Energy fails to launch and no other participants enter the program, Nova Scotia Power could seek to recover costs through ratepayers. The board stated that the utility could recover costs through the rate-setting process, with recovery contingent on the costs being prudently incurred.

Overall, the decision by the Nova Scotia Energy Board reflects a commitment to supporting small renewable energy companies and promoting the use of renewable energy in the province. The outcome of this dispute highlights the challenges and complexities of transitioning to a more sustainable energy system.