Emera Inc.-owned utility Nova Scotia Power Inc. has offered to ease the burden of financing the C$1.52 billion Maritime Link transmission project on consumer power bills by rebating a portion of the project's approved costs to consumers.
NS Power would provide a credit to customers totaling C$51 million annually in 2018 and 2019, representing Maritime Link's depreciation costs in those years, according to a June 8 filing with the Nova Scotia Utility and Review Board, or UARB. The regulator was set to consider the application at hearings starting June 12.
While Emera is on time with Maritime Link and associated projects that would deliver power to Canada's easternmost provinces, a hydroelectric project being built by Nalcor Energy Corp. to produce the power has hit construction snags and cost overruns that have delayed its in-service date until 2019. Maritime link is expected to be completed by the end of this year at a 2013 board-approved capital cost of C$1.52 billion, with variances of C$62 million and allowance for funds used during construction, or AFUDC, of as much C$230 million. The board's previous ruling would allow NS Power to begin recovering Maritime Link costs in 2018.
"The depreciation-related funds will be returned to customers as a credit because NS Power's base rate of fuel was established pursuant to the rate stability legislation, which prevents rates from being adjusted again until 2020," the company's opening statement to the UARB said. "Therefore, while established electricity rates must collect the funds and those rates cannot be changed until 2020, with the board's approval NS Power is able to return the funds to customers annually through an on-bill credit."
The UARB had given NS Power the ability to collect C$162 million and C$164 million, respectively, in 2018 and 2019 to pay for the Maritime Link prior to its in-service date of 2020. The bulk of the funds will continue to be collected.
Maritime Link is designed to carry power from Nalcor's 824-MW Muskrat Falls project being built in Labrador. Nalcor, which is owned by the government of Newfoundland and Labrador, has seen that project's cost rise by more than C$5 billion from initial projections to C$11.7 billion. Emera said in May it had spent C$1.1 billion on the Maritime Link project to date.