NDP, Liberals in dust-up over coal costs

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HALIFAX — Environment Minister Sterling Belliveau said Liberal energy critic Andrew Younger was wrong to blame the NDP’s decision to relax mercury emission regulations for higher power rates.

“I was surprised by the question,” Belliveau said Thursday. “He just simply got it wrong. Either he doesn’t understand it, or he’s deliberately trying to confuse the issue.”

In question period on Wednesday, Younger quoted a Liberty Consulting report and said the decision to relax mercury emission regulations cost ratepayers an additional $3.65 million during the months of December 2010 and early January 2011.

“Two years ago this minister was standing up and saying that by reducing the mercury standards and by putting the health of Nova Scotians at risk that Nova Scotia Power bills would be lower,” Younger said in the preamble to his question.

He said a Liberty Consulting Group audit concluded that as a result of relaxing the mercury emission standards, “Nova Scotia Power spent $3.65 million more on fuel than they would have otherwise with the original targets.”

“Will the minister now admit that decreasing the mercury emission requirements actually cost ratepayers?” Younger said Wednesday in the legislature.

David Rodenhiser, a spokesman for Nova Scotia Power Inc., said “the assertion that Mr. Younger made is false.”

“The coal that we purchased in accordance with the regulation change has helped save customers of Nova Scotia Power tens of millions of dollars in the year in question,” Rodenhiser said.

The $3.65-million figure suggested by Liberty does not represent an increase in costs to ratepayers over the previous costs of fuel; it represents a missed opportunity at additional savings is how the utility characterizes the criticism.

Nova Scotia Power bought cheaper coal from the Prince mine in Cape Breton and planned to mix it with low-mercury coal from Colombia. It expected a certain level of performance at the Lingan generating station when it burned the newer fuel mix, but it noticed a “derate” — a decrease in performance instead.

Belliveau said the July 2010 decision to relax mercury regulations was made to save ratepayers money. Regulations were 168 kilograms per year and then lowered to 65 kilograms per year by the NDP. When Nova Scotia Power said they would have to buy more expensive coal to meet those targets, the NDP decided to set the limits at 110 kilograms. They also put in a plan to lower the mercury emission targets in the future.

“We’re going to achieve our targets by 2014 and we’re going to save ratepayers money,” Belliveau said. “(Mr. Younger) failed to understand that point.”

Belliveau added that as part of the compromise, the province has set stricter mercury emission targets beyond 2014.

Younger stood by his interpretation of the report Thursday, saying that Liberty already factored in the savings from cheaper coal and that the $3.65-million cost was a net cost to ratepayers.

“It comes down to whether you believe Nova Scotia Power or believe the independent auditor and all the intervenors who say Nova Scotia Power is wrong,” Younger said.

Nova Scotia Power is fighting the Liberty audit before the Utility and Review Board in an effort to avoid having to give money back to ratepayers. The public version of the Liberty audit is redacted, and without access to some information on fuel costs, it’s difficult to weed out the facts, he said.

“I don’t have the access to the confidential information on their actual fuel costs,” Younger said. “So I’m going to trust the independent auditor who goes in and says at the end of the day: ‘This is how it nets out.’”

 

 

Organizations: Nova Scotia Power Inc., NDP, Liberty Consulting Group Utility and Review Board

Geographic location: Cape Breton, Colombia

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