Nova Scotia Energy defends including expenses to cowl storm harm at listening to on proposed price hikes

As Hurricane Fiona batters the province, Nova Scotia Energy is defending its head-we-win, tail-you-lose proposal for a brand new storm cost on charges this week.

As a part of its utility to the Nova Scotia Utility and Evaluate Board (UARB) for the overall 11.6 per cent enhance, the corporate can also be asking for a “storm price restoration rider” that might permit it to gather as much as two per cent extra. per 12 months from ratepayers to pay for excessive climate.

Eric Ferguson, head of pricing and transition regulation at NS Energy, stated Tuesday in Halifax that the storm surge can be used sparingly.

“It is not the membership’s aim to have the rider yearly, it is the aim to use when it is solely completely mandatory,” Ferguson stated.

Why buyer teams are cautious

This is why attorneys and consultants representing NSP consumer teams are suspicious.

Nova Scotia Energy desires to cost clients $17 million to pay for harm brought on by storms subsequent 12 months. That quantity can be included within the price.

The proposed storm man would permit him to recoup cash spent on built-in curiosity related to extreme storms.

The rider solely goes a technique – to the good thing about the corporate. If the storm prices fall under what is ready within the price, the corporate retains the distinction. There isn’t a refund for customers.

A tree uprooted by Hurricane Dorian in 2019 fell on energy traces throughout Grand Lake Highway in Reserve Mines, closing the highway for a number of hours. (Tom Ayers/CBC)

The corporate wins anyway

In regulatory phrases, it’s thought-about an “uneven” association.

“The criticism of uneven nature was that it was unnaturally benevolent [NSP Inc.] shareholders. That got here out within the counsel’s proof,” stated Nancy Rubin, representing NSP’s main purchasers.

“Sure,” Ferguson admitted. “The corporate may get well bills, however there was no provision for reimbursement of under-expenditures.”

Ferguson stated NSP wouldn’t apply for a windbreaker if the income it brings in would exceed the accredited income or price of return, which is at the moment set at 9 p.c.

The limitation is just not within the firm’s utility.

Hurricane Dorian left a path of downed timber and energy traces in its wake. NSP’s CFO stated the 2019 climate occasion created $17 million in sudden prices for the corporate. (CBC)

However Craig Flemming, NSP’s chief monetary officer, stated the corporate had eaten $17 million in sudden prices from Hurricane Dorian in 2019 as a result of it may nonetheless earn the agreed price of return that 12 months.

If the Nova Scotia Utility and Evaluate Board rejects its bid for storm aid, the corporate is asking to place in $20 million a 12 months in charges to pay for storm harm.

Protecting timber away from traces

The NSP promised to supply a “full image” of vegetation administration – tree trimming rules – after shopper advocate Invoice Mahody identified that the quantity it spent in 2020 and 2021 fell to a mean of $4.2 million – half the common in between 2010 and 2019.

The corporate stated tree trimming prices seem in numerous areas of the enterprise and dedicated to a breakdown.

NSP taxpayers on the hook for $3M settlement with Eastlink, Rogers

NSP revealed on Tuesday that it expects taxpayers to cowl the $3 million a 12 months it misplaced in income because of its settlement with Eastlink, Rogers and Xplornet. The telcos have been preventing towards a proposed 165 per cent hike within the attachment charge charged for utilizing NSP-owned poles.

NSP hoped to get $7.5 million by elevating the charge from $14 per pole per 12 months to $37.

A person walks by a Rogers retailer in Toronto on this 2013 file photograph. Nova Scotia Energy introduced Tuesday that it expects ratepayers to pay for the $3 million a 12 months it misplaced in income because of its settlement with Eastlink, Rogers and Xplornet. (Galit Rodan/The Canadian Press)

Michael Willett, NS Energy’s director of monetary management, stated the charge enhance was primarily based on flawed data, together with double-counting time beyond regulation, inaccurate pole counting and added prices that weren’t a part of the pole set up charge final accredited by the board in 2002.

A current settlement of $22 per rod diminished the take to $4.5 million.

“That incremental $3 million hole is what must be recovered from different clients,” Mahody requested.

In response, Willet stated: “We function on a cost-for-service mannequin in order that’s right. That price must be recovered.

The listening to will resume on Wednesday.

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