Electrical utility slapped with $10M fine over missed renewable energy goal — but province has part to play in energy transition, too, says expert

The Nova Scotia government has handed the maximum possible fine to its privately owned electrical utility for missing a renewable energy target: $10 million.

However, one energy policy expert says the utility isn't the only player in the energy transition and the province bears some responsibility for the level of renewable energy in Nova Scotia.

“The premier really cannot deflect responsibility to the federal government or to the utility on this because there are a whole bunch of things that the province can do right now to make hitting every renewable energy target easier by increasing electricity savings,” said Brendan Haley, policy director at Efficiency Canada

The utility, Nova Scotia Power (NSP), was mandated to provide 40 per cent of its electricity from renewable sources by 2022 but only hit around 32 per cent renewables between 2020 and 2022.

Patricia Jreige, a spokesperson for the province’s Department of Natural Resources and Renewables, said the fine — announced last week — will be taken from shareholders rather than ratepayers.

“We’re imposing the maximum fine under the Renewable Electricity Regulations — that’s $10 million — to show that we mean it when we say we’re holding Nova Scotia Power to account,” she said in a statement.

NSP told Canada’s National Observer it still intends to achieve an 80 per cent renewable grid by 2030.

“We know greening the grid and making cleaner energy is a priority for everyone in Nova Scotia… We respectfully disagree with the penalty and intend to appeal the decision of the provincial government to the Nova Scotia Utility and Review Board,” said the company.

As of 2019, 51 per cent of Nova Scotia’s electricity generation was coal, 22 per cent was natural gas and three per cent came from biomass and geothermal energy. The utility failed to meet its 2020 goal of achieving 40 per cent renewable energy, which was then pushed to 2022. NSP confirmed in December 2022 that it would not hit the goal.

The fine comes in tandem with an ongoing struggle to import hydropower into the province. After missing its 2020 goal, NSP blamed the delayed Muskrat Falls hydro project in Labrador, which is now waiting for a commission date from the federal government after finishing necessary work and testing last week, for failing to provide the power it was counting on.

In November 2022, NSP’s parent company Emera said it was halting spending on the proposed Atlantic Loop, a regional power grid expected to import hydropower from Quebec and Newfoundland and Labrador into the Maritime provinces, including from Muskrat Falls. However, when this year’s federal budget handed out funding for the loop, it purposely omitted Newfoundland and Labrador and Prince Edward Island from the announcement.

Last week, Premier Tim Houston told reporters he’s “not optimistic about the Atlantic Loop.”

Amid the complex debate of who should be getting power from where is a historical failure to plan for the energy transition, said Haley, who is also a past postdoctoral fellow at Dalhousie University, where he looked into hydropower and other renewables in the province.

Once the plan was made to get hydro via Muskrat Falls, he said there was a “real lull” in the province investing in renewables domestically.

“But it seems in hindsight that Nova Scotia really should have been following up a hedging strategy to reduce the impact of project delays,” explained Haley.

“And part of that could have been thinking about those hydropower imports as only one piece of one enabler of the broader energy transition, which should have encouraged a stronger focus on domestic sustainable energy action, and then the hydro imports when they come.”

However, there are energy-efficiency efforts the province could put forward that would quickly help lessen the burden on the grid, said Haley. He — as well as Jreige, the Natural Resources Department spokesperson — note the province is a leader in efficiency programming, having hit the top spot in an analysis from Efficiency Canada ranking provinces in terms of savings from such programs in 2021.

The province pointed to its announcement in December 2022 that $140 million would be invested over four years to expand energy-efficiency programs.

Canada’s National Research Council put forward a new building code in December 2022, which outlines how buildings will achieve net-zero greenhouse gas emissions by 2030. Nova Scotia has adopted the baseline standard within that code. However, Haley explained the province hasn’t committed to implementing a net-zero energy-ready building code, which is a level of efficiency where buildings use on-site renewables to fulfil energy demands. Meanwhile, British Columbia has committed to all new builds meeting that standard by 2032.

Requiring energy labels to show how efficient buildings are and implementing energy-efficiency performance standards for large buildings would also reduce the amount of energy needed in the province, said Haley.

Ultimately, he said it isn’t fair for the province to deflect responsibility to the federal government or NSP. But at the same time, he noted, the utility can’t say missing the target was out of its control.

“I don't think it's responsible for the premier to just express pessimism, or to kind of wait for federal money for hydro imports because there's a lot of things that are directly in the province's control," he said.

“And the big lesson should be: the province shouldn't just be relying on them.”

The leader of the Nova Scotia Green Party, Anthony Edmonds, agrees. He noted it’s especially important now to look at the next round of renewable targets, and that the province should mandate “regular milestones to ensure that steady progress is being made.”

Canada’s National Observer also reached out to the provincial NDP but did not receive comment in time for publication.

“The immediate cause of this failure is NS Power's plan falling through, but the province plays a key role and holds many cards that the utility does not,” said Edmonds.

“The province should be proactive in spurring more independent generation, energy storage and especially energy conservation. Energy that's not used is the greenest and lowest-cost energy.”