[HALIFAX, NS] — Three strikes and you’re out. In what could be the last chance to save the idled NewPage mill, the Nova Scotia Utility and Review Board must now rule on whether to approve a load retention tariff application by Pacific West Commercial Corp. and Nova Scotia Power Inc.
UARB chairman Peter Gurnham summed up the situation in a nutshell in a comment to Todd Williams after the provincial government’s energy consultant concluded his testimony.
“So, you think we’ve got it right this time?” Gurnham asked Williams Wednesday, the last day of testimony at the hearing. “This is the third panel I’ve chaired where the future of this mill hinged on a rate decision of the board.”
Williams responded: “Based on what I’ve seen, and the projections, you would be doing everything that you could from an electricity cost perspective to make it right.”
It was the last Now, Gurnham and fellow board members Roberta Clarke and Murray Doehler must sift through more than 3,000 pages of documents and three days of testimony.
But before they can make a ruling, they’ll need final written arguments from the bevy of lawyers working at the hearing. It must also wait for a crucial decision from the provincial government on whether it will relax renewable energy rules for Pacific West, which does not want to pay any additional costs for renewable energy.
The board will have to decide what is in the best interest of ratepayers, but complicating matters is Nova Scotia Power Inc.’s unwillingness to accept any risk for fear it will jeopardize its credit rating.
“It would be irresponsible — from my position — to take that position because what that will do is inflict higher borrowing costs on customers,” NSPI president Rob Bennett said.
He added that “all the incremental costs are designed to be covered by the partnership.” Another factor complicating the intricate deal is the nearly completed biomass facility that will be able to supply steam and power to the mill.
UARB lawyer Bruce Outhouse pointed out the biomass plant might not be something that would typically run on an economic basis and wondered if ratepayers, not the mill, would cover the cost.
“There is going to be, if this proposal is approved, an additional fuel cost injected into the system which is going to be paid by other customers, not the mill. Is that correct?” Outhouse asked Bennett.
“The circumstances are still in flux,” Bennett replied. “The load on the system, the point that you make about the biomass plant operation being necessary in order to supply steam, but potentially not being necessary in order to meet renewable energy compliance, creates an issue that needs to be resolved.”
Rene Galllant. NSPI’s vice-president of regulatory affairs, said any decision to start up the biomass plant will be based on regulatory requirements and keeping costs as low as possible for customers.
“We are required by laws and regulations to run certain facilities and that might include the biomass plant,” he said. “When it does, we’ll be running it. When it’s not economic to run, we’ll take a very close look at whether we can continue to run it.”
If the load retention tariff application is approved, it will pay for 24 per cent of the biomass plant’s fuel costs in exchange for 24 per cent of the electricity.
The recent shutdown of the Bowater Mersey paper mill in Queens County which reduced the amount of electricity needed in the province, the fate of the Brooklyn biomass facility, and other renewable energy projects preparing to come on stream will all play a factor in whether the Point Tupper biomass facility will need to operate.
“Things have changed quite recently, and no doubt things are going to change again,” Gallant said. “It’s not a mandatory component of running that mill that we have a cogeneration facility.”