NOVA SCOTIA HOUSE OF ASSEMBLY
Thursday, October 20, 2011
COMMITTEE ROOM 1
Lower Churchill Falls Project
Printed and Published by Nova Scotia Hansard Reporting Services
Mr. Sidney Prest (Chairman)
Mr. Jim Boudreau (Vice-Chairman)
Mr. Howard Epstein
Mr. Gary Ramey
Ms. Lenore Zann
Mr. Leo Glavine
Mr. Andrew Younger
Mr. Alfie MacLeod
Mr. Chuck Porter
Ms. Jana Hodgson
Legislative Committee Clerk
Mr. Christopher Huskilson, President & CEO
Ms. Nancy Tower, Executive Vice-President, Business Development and
CEO Emera Newfoundland and Labrador
Mr. Gerald Weseen, Senior Director, Government Relations
Department of Energy
Mr. Murray Coolican, Deputy Minister
HALIFAX, THURSDAY, OCTOBER 20, 2011
STANDING COMMITTEE ON RESOURCES
Mr. Sidney Prest
MR. CHAIRMAN: Good morning everyone. We’re running just a few minutes late. A few of the other members are going to be showing up, some are caught in traffic or whatever. What a beautiful rainy morning, everybody is smiling, just wonderful.
We’ll get our meeting started and we actually have a housekeeping item that we have to announce regarding fire safety so we’ll let Jana make that announcement.
MS. JANA HODGSON (Legislative Committee Clerk): Good morning. In the event of an emergency where we have to vacate the building, for example in the event of a fire and the fire alarm goes off, we’ll have to leave the building immediately. We’ll have to exit by that back door and through the office that you guys came in. We’ll go towards the elevators. Please do not take the elevator down, we’ll have to take the stairs. The stairs are located on the right side of the elevator, so we would go down all the way to the lobby, exit the building and we would meet at Parade Square.
MR. CHAIRMAN: We will start our meeting off with the introduction of the members of the committee; there are two or three who are not going to be here on time. Mr. MacLeod, we could start with you.
[The committee members and witnesses introduced themselves.]
MR. CHAIRMAN: On our agenda today is a very important project on the Lower Churchill Falls. I’m sure everybody is interested in hearing all the good stuff and waiting for more good news. We will allow five minutes for presentation and then we’ll have a question and answer session after. We’re going to be running short on time, I think, towards the end. Each member will get an opportunity to ask questions and then we’ll come around with the second round. If everybody can watch their time and take into account that we’ve got a lot to accomplish, so whenever you’re ready we will go ahead.
MR. MURRAY COOLICAN: Thank you, Mr. Chairman. This is an important project for the Province of Nova Scotia and I think it’s an excellent thing that the committee has called us before you. I think it’s an important issue to discuss and it’s important that discussion be based on facts.
This was where we started in 2009 and as you can see we were 80 per cent dependent on one fuel source when we started. (Interruption) Sorry, we’re missing a slide here. I have a slide that I hope is in your handout, which indicates that the cost of coal has gone up 75 per cent over six years. One reason for reducing dependence on coal is that it’s the single biggest reason for our recent rate increases. Secondly, coal is also polluting; it’s a source of GHG and other emissions. In addition to that, there are new federal coal regulations that will require us to move off coal. That’s why our plan is based on these principles.
First of all, diversity. We should never find ourselves dependent again on one source of energy to the extent we were on coal. So we’re looking for wind, tidal, biomass, hydro and natural gas. We also think that security is going to be important and that’s another reason for reducing our dependence on imported coal.
Second, sustainability. We want to focus on cleaner and renewable resources. We want to look for energy sources that provide us with long-term price stability.
Finally, we would like to see projects that have more of the money and jobs staying here, whereas with imported coal, all the money is going not only outside Nova Scotia, but outside the region, outside Canada.
So how does Lower Churchill stack up? Well, on diversity, it will add about 8 to 10 per cent of our total load, so it meets that principle. On security, it will reduce dependence on imported coal so it meets that. On sustainability, it’s a clean, renewable resource. Rate stability - it has a long-term fixed cost to it. Finally, there will be local benefits, particularly from the construction of the Maritime Link.
There has been a fair amount of talk recently about some of the options; power from Hydro-Québec is one. Where there is any example of a long-term contract - and there aren’t many, in fact, I think there’s only one with Vermont, and that’s a market rate which goes up with the market versus a long-term stable cost. Power from Hydro-Québec requires transmission upgrades and I expect that Mr. Huskilson will be addressing that issue in more detail. It doesn’t create any local jobs.
I would add that the Lower Churchill transmission, some of the benefits just from the Lower Churchill and also possible upgrades, will enable potential imports from Quebec if the price is right.
Natural gas is another alternative; it’s also subject to market prices. It’s not as clean as hydro, it’s not renewable. It will require the construction of significant plants and possibly some infrastructure, at a cost to ratepayers. But I should underline that increased use of natural gas is part of our plan for diversity and, again, that is dependent on the price.
Finally, renewables in the province, we still need a firm backup supply for most renewables and the Lower Churchill enables that to happen.
To go over the advantages of Lower Churchill, it’s 35 years of clean, renewable energy at a fixed cost. Just think about it; 35 years - I believe that’s longer than a shipyard contract. It’s power when and how we need it so it’s firm and shaped - I don’t mean to be rude, but in the electricity business those are important terms. It does enable more renewables like wind and tidal. It integrates the province into the North American energy grid and I think Chris will talk about this some more.
We’re now at the end of the line and if any of you from rural areas understand electricity systems, you know that being at the end of the line is not a good place to be; whereas when you’re part of a loop in an electricity system, it’s a better place to be.
As such, it facilitates a flexible and regional approach, and the government is doing a lot of work with the other three provinces in the Atlantic Region under what’s called the Atlantic Energy Gateway strategy. We think the co-operation that we see being enabled by the Lower Churchill and the work of the four provinces together and the utilities in each province will help us save dollars.
It does contribute to the renewable targets, 8 to 10 per cent of total projected sales; it contributes to air emission reduction targets; it will reduce GHG emissions by about 1 million tons per year for Nova Scotia; and finally, it contributes to the coal regulation compliance.
Here’s where we are, where we started in 2009, and here’s where we’re headed for 2015. I apologize for the box but those of us who aren’t that good with computers couldn’t find a way to make it disappear. We expect by 2015 to have 25 per cent renewables to meet our target of approximately 50 per cent coal and 25 per cent natural gas. In 2020 we see the renewables growing to 40 per cent and Lower Churchill is a big part of reaching that target. We see coal and petroleum co-potentially as low as 35 per cent and natural gas at 25 per cent. And 2020 is a long-term projection but the one piece of that that is guaranteed is the 40 per cent on renewables.
Thanks very much for your time and I’ll turn it over to Chris.
MR. CHAIRMAN: Thank you. Mr. Huskilson.
MR. CHRISTOPHER HUSKILSON: Thank you, Murray, and thank you, Mr. Chairman. It’s a great pleasure for us to be here today to be able to speak about this project. It’s an exciting project for Nova Scotia, and it’s an exciting project for the region and one that we’re very proud to be involved with.
The first slide is an overview of the system that will be created by this project. It is actually made up of four different components. It is made up of a connection between the existing Upper Churchill project, which is a very large hydro project in Labrador, 5,500 megawatts. That interconnection is the yellow bit in Labrador. It then includes the development of an 824-megawatt power plant at Muskrat Falls. The orange or gold line is a line that is called the Island Link, and that’s an 1,100-kilometre transmission line that will basically connect Muskrat Falls to St. John’s, Newfoundland. The red section is what we call the Maritime Link. That’s the scope of the entire project.
I think in order to understand where this is all coming from, it’s good to just step back and look at where Newfoundland is and where they are in reference to the region because this is in the end a regional project. Newfoundland, we believe, will be a huge source of energy to this part of North America, and Nova Scotia is in the fortunate position to be very close to this huge source of energy. Today they have oil offshore, there’s a potential for natural gas offshore, they also have tremendous amounts of renewable energy already, in total about 7,000 megawatts of hydro and about 6,000 megawatts in additional potential for hydro. So that’s the scope and the scale of what the opportunity is here.
As well, Newfoundland has a strategy which is a very long-term strategy that would see them use non-renewable resources like oil and natural gas to fund the development of renewable resources. What this project does is put us in a position to be involved with that strategy which is, as was said earlier, a very long-term strategy and one that can produce very stable electricity costs over a very long period of time. So that’s really the opportunity that’s there. I think for the region this becomes a legacy project and one that will change where we are today.
The next slide just gives you a few more of the statistics; in fact, it’s a $6.2 billion project. The arrangement we’ve been able to come to with Newfoundland and Labrador and now, of course, specifically, is that 20 per cent of the energy from this project will come to us for 20 per cent of the cost. The uniqueness of that particular type of investment is that we are actually getting the energy from this project at the project economics. We’re paying no more and no less than Newfoundlanders will pay for this particular energy from this particular project. In fact, it’s a very, very advantageous situation that Newfoundland is giving us access to this resource at the same cost that they are seeing for the resource. So that’s the position and the opportunity that’s before us.
From a Nova Scotia perspective, this will be a 100 per cent regulated project, it’s a project that will serve Nova Scotia customers and the portion that we will be involved with, 20 per cent of the energy, will serve Nova Scotia customers, and therefore that will be overseen by both the Utility and Review Board of Nova Scotia and the Public Utilities Board in Newfoundland and Labrador. So it will be a project that has lots of transparency and lots of oversight as the project proceeds. We’re forecasting that the project would be in service by 2017.
Hopefully you’ve all had a chance to see the term sheet, it is a public document, it has been publicly available since the time it was signed - around November - and it gives you a good sense of where we’re headed from an overall perspective. It’s important to point out though that at this stage it is a term sheet, we still do not have definitive agreements in place with Nalcor. That is something we’re working hard to do by the end of this year and we believe we will be able to achieve that target. But at this point it is a term sheet, it is non-binding and it is, in fact, really an opportunity that’s before us.
The term sheet includes the most important part which is the 20 per cent of the energy from the project, which is about one-terawatt hour, 1,000 gigawatt hours, one million megawatt hours and one billion kilowatt hours. That’s what that translates to for 20 per cent of the absolute cost of the project. That’s the fundamental basis of the project.
But what we found as we were working with Newfoundland on this project is that they were unable to do just that transaction, they needed to have a broader connection to the rest of North America. That is something that Emera was able to bring because of our investments in other parts. Our investments in New Brunswick and our investments in the State of Maine have allowed us to be able to bring to Newfoundland the ability to actually get some of the energy into the U.S. That was important to them as part of the overall transaction.
The next slide, again, gives you a little bit more information: 824 megawatts is the Muskrat Falls plant; 4.9 - or we rounded to about five - terawatt hours per year; and $2.9 billion for that part of the project. We will not have any specific ownership in the power plant. The ownership that we will have will all be in the transmission system. The Labrador-Island Link, which will have 900 megawatts of capacity to move energy from Labrador to the island of Newfoundland. That’s a high-voltage DC connection, which is relatively new technology; not leading edge, but very new technology and we’ll be able to move a tremendous amount of energy at relatively low losses. That is also expected to be in service in the 2016-17 time frame; another $2.1 billion.
Then the project that is most connected to Nova Scotia, both literally and from a customer perspective, the Maritime Link which will be a 500-megawatt connection between Cape Breton and the island of Newfoundland. That is about 180 kilometres, also of high-voltage direct current transmission, and that will cost about $1.2 billion. When we put that whole thing together, that’s a $6.2 billion project, which can deliver between 8 and 10 per cent of the energy needed for Nova Scotia.
The one other aspect is that the first two terawatt hours of the project will go to Newfoundland and they’ll use that to displace their Holyrood oil-fired power plant. The next terawatt hour will come to Nova Scotia and we’ll use that as part of our renewable, very stable opportunity for the customer base. The next two terawatt hours will be available to the market. Some of that could be bought by Nova Scotia, some of it could be bought by either Prince Edward Island or New Brunswick, or some of it could end up in the United States. That means that a lot more transactions, a lot more activity will happen in the electricity system in this area. That will also provide opportunities and options for customers in this region.
The current status of the project is that, as I said earlier, we’re working very diligently with Newfoundland and Labrador to come up with the definitive agreements. That’s something we expect to do by the end of the year. We’re also currently in the process of beginning to put our team together to be able to execute this project. Emera is responsible - and Nancy and her team specifically - for building the Maritime Link; Nalcor is responsible for building the rest of the project. We have expressions of interest out as we speak for engineering expertise and as Murray said earlier, this is going to turn into spin-offs for Nova Scotia. There will be a lot of activity in this region. In fact, about 60 per cent of the total activity that will happen for this project, of the $6.2 billion, will actually happen in this region. Things like engineering and procurement activities will also be felt by Nova Scotia.
This summer we’ve been in the water with survey activity, understanding where the best places to come ashore are for the cable, both on the Newfoundland side and the Nova Scotia side. That work is ongoing, but we’re beginning to narrow in on the locations. At the same time, the project itself, the power plant and transmission line on Labrador are moving forward. In fact, the engineering management company has been now hired and is working diligently towards that end.
From an environmental perspective, the project - except for the Maritime Link - has now all been filed. In fact, the joint review panel has reported on the power plant in Labrador. The comprehensive study that is going on for the transmission line in Newfoundland is well along the way; probably within a year we’ll hear the outcome of that. What we expect to be a comprehensive study for our project, the Maritime Link, will get issued this Fall, likely late this month or early next month.
All in all, we would say that the project is proceeding. There will be a need to put this project before customers and before stakeholders in Nova Scotia. We believe that process will begin late this Fall, with a more formal application sometime in 2012. This is a project that you can be assured will be very closely reviewed by the regulator in Nova Scotia, which is an important part of the overall approval process.
As I said earlier, this will cause a lot more activity to happen in this region when it comes to transactions. Again, to the points that were made earlier, in fact, this will allow us to buy energy from more parties than just Nalcor. You have to remember that this is only 8 per cent to 10 per cent of the energy needs for the electricity side in Nova Scotia, so there’s lots more energy to be purchased. This project, because it actually forms a ring now around the Atlantic Canadian region, and really the way that happens is today Labrador is at the end of the electricity system off the Quebec system. Nova Scotia is at the end of the electricity system in North America, coming up from New England, so we are at the end of the system.
When we build the link that will go from Cape Breton to Newfoundland, from Newfoundland to Labrador and then from Labrador-Muskrat Falls to Labrador-Churchill Falls, that will form a complete loop, all the way through Quebec, through New Brunswick, through New England, back through Nova Scotia and back to Newfoundland. That will be the first time that this region has ever had that kind of opportunity and option when it comes to being able to source power from lots of different areas. Today we buy small portions of energy from other places, but this will allow us to buy much larger portions of energy, something that we couldn’t otherwise do.
I’ll address one more point that’s really quite important to this whole thing. Up until this project came to us, we had no idea how we were going to get above 30 per cent renewables in this province because most of the renewable opportunities that we have are intermittent and because we were at the end of the electricity system with intermittent opportunities, it looked to us like we would be limited to about 30 per cent renewables, with the current technologies.
When this project came along, because it changes and makes us so that we are no longer at the end of the line, it then allows us to actually have no limit on the number of renewables we can put on the system. It certainly enables us getting to 40 per cent, as the deputy has outlined, but it really means that at least up to the additional 500 megawatts that we can bring across that tie-line, we can increase our renewable by at least that amount as well, so it changes the opportunity for Nova Scotia quite dramatically. In fact it certainly enables large-scale tidal; that was the other thing that we weren’t sure, if we ever did get to large-scale tidal in the province, how we were going to be able to accommodate that on the system, but with this project in place, large-scale tidal can be accommodated on our system, so it does quite dramatically change the outlook of the province when it comes to the electricity world.
Maybe I’ll conclude and summarize by saying that first of all, this is an opportunity, not an obligation. We are in no way obligated to do this yet; we are in the process of getting to an obligation, but it is currently an opportunity. We are getting the project at the project economics, so we are getting this project at exactly the same economics that Newfoundlanders will get it for. That is very important - there is no premium being paid on this project.
It’s a project that creates a new future for Nova Scotia when it comes to electricity. It’s an interconnection that we’ve never had before and it allows us to enhance interconnections not just east-west but also north-south. That will allow more access to other energy over time. It gives us access to very reliable, new, cutting-edge hydro, which we’ve not had access to. The last time we built a hydro plant in this province was in the 1970s. It also enables large-scale tidal, as I said just a few moments ago. It potentially gives us a new export, as a province, and it gives us the ability to move to 40 per cent renewables and potentially beyond.
So it is a choice for Nova Scotians, it is something that provides new diversity and a new choice, and we think a project that we should continue to advance. So thank you, Mr. Chairman. With that, I think we’re ready to take questions.
MR. CHAIRMAN: Thank you, Mr. Huskilson. A couple of members were late coming in so maybe they could introduce themselves and we’ll get started on the questions.
[The committee members introduced themselves.]
MR. CHAIRMAN: Mr. Younger, I guess you’re first in starting the questioning off.
MR. ANDREW YOUNGER: It always amazes me how much longer traffic takes when it rains outside. I guess everybody is lined up for shipbuilding jobs this morning or something.
I have a few questions about this, both for Emera and also for Mr. Coolican. I did have a chance to see Ms. Tower’s presentation at the CORE conference a couple of weeks ago so I’ve seen this a few times. The thing that frustrates me sometimes is that every time you ask a question about Churchill Falls, to sort of get more information or to question parts of it, there a lot of people who jump down your throats and say you’re against the project. I just want to be clear that I’m not against the project, although I do have some questions about some of the information that has been put out about i,t but also in terms of where this fits in the overall scheme. I think they’re important questions that we need answers to. I do think that the Muskrat Falls project is an important component of the entire energy mix.
I guess I want to start with Mr. Coolican. You had said in your presentation that the infrastructure is not there to also buy energy from Hydro-Québec or to buy - I guess some people are talking about it as an alternative, but I talked about this in the Spring and I said we should be doing this as a companion because your own chart shows us still being on 50 per cent coal by the time we hit 2015. I look at this and say, well, there’s an opportunity to be doing both of these things and also balance the risk because, as we all know, Muskrat Falls is a huge construction project and could be delayed. It isn’t actually approved yet at this point.
I want to ask you about that connection issue because according to the study done by Hydro-Québec, they say that all of the grid infrastructure is there, with one exception, which is the New Brunswick-Nova Scotia interconnect which, of course, is required for this project as well. Could you just maybe explain more about what you mean?
MR. COOLICAN: Yes, I’ll say a couple of things and then I’ll turn it over to Chris. One of the things that I’ve learned in looking at the electricity business is there are very seldom any simple answers.
MR. YOUNGER: Fair enough.
MR. COOLICAN: There are often simple questions - not to suggest that yours was - but it’s very complex and the most complex part of it is transmission. So understanding transmission is important and I always turn to the experts when I’m trying to understand it. Bill Marshall, who was quoted in The Halifax ChronicleHerald, is one; I think Chris Huskilson here is another.
There are a couple of issues, one is there is congestion in New Brunswick around Moncton; there are also concerns about the tie between Nova Scotia and New Brunswick. I’d ask Chris to elaborate on that. For example, there were a number of times last winter when there was zero capacity between Nova Scotia and New Brunswick.
MR. YOUNGER: I’ll let Chris expand on that, but both of those issues have to be addressed to take Churchill Falls as well . . .
MR. COOLICAN: This is where transmission gets complicated so I’ll let Chris . . .
MR. HUSKILSON: Actually no, they don’t. Where we are with the Muskrat Falls project, we don’t need to build any more transmission past the end of the Maritime Link so with the Maritime Link constructed, the project, as it’s currently contemplated, can go forward.
If, in fact, two terawatt hours do move through Nova Scotia, then that by itself will allow us to buy a source from other places. The reason is that as we export energy, which we would be doing with the two terawatt hours going out - let’s say that’s 300 megawatts, just in straightforward terms - there’s room on the existing Nova Scotia tie to move 300 megawatts out of the province and there’s room on the existing transmission between Cape Breton and the border to do that.
There’s also room in the New Brunswick system to take 300 megawatts and move it through. In fact, that’s one of the elements that caused this deal to come together, and I’ll jump around a little bit here because these kinds of very large deals are extremely complicated to put together.
One of the things that we had attempted to do early on in these discussions was actually get into a three-party arrangement which would have included New Brunswick directly. Now, I would have to say that both Prince Edward Island and New Brunswick have been extremely supportive of Nova Scotia and Newfoundland in this process and I think will continue to be very supportive. I think there will be benefits for those provinces, as well. But when it came to actually doing a transaction that specifically involved three different counter-parties we found it just too hard to actually get the interests of all three parties to align in a contractual way. That was why in the end we came back to doing the transaction simply with Newfoundland.
We initially started doing this transaction as a Nova Scotia Power to Nalcor Energy transaction because we thought that the two provinces could consume the energy. In the end, that wasn’t a deal that Newfoundland wanted to do. They wanted to ensure that they also had access to New England as part of this transaction. That’s where Emera had to come to the table because Emera was the only party that actually had both transportation in New Brunswick - and the reason we have that is because of our investment in the Bayside power plant - which has transportation in New Brunswick and transportation in New England. We have that as a result of our investments in New England. We were able to bring multiple interests to the table, which allowed Newfoundland to get all of the things that it needed to have in order to make this deal come together.
I’m going around a little, but I’ll just go back to your specific question about Quebec. The reality is that this transaction does not require any further investment in New Brunswick and the reason is because we already have a path in New Brunswick as a result of our Bayside investment. Any transportation required in New Brunswick is already in our hands; that’s using the existing system, no additional build.
Now, we still would like to build some more in New Brunswick because that will make it more robust and will allow us to move more energy, but if we were to try to do a Hydro-Québec deal today, that becomes a three-party deal because it has to involve Hydro-Québec, New Brunswick and Nova Scotia, and it has to involve construction. It has to involve construction to at least alleviate the Moncton congestion. Bill Marshall makes this point in the article this morning that it’s also true that there are some issues with the interface between Quebec and New Brunswick that’s aging infrastructure and it probably needs to be reinvested as well.
So when you look at the whole package of what would have to be done to do a similar type of deal with Quebec, it is not dissimilar in the amount of investment that’s required. The difference is two parties versus three parties; it’s much more complicated to do a transaction. But I completely agree with you, this is just the beginning, there is more to be done. I think Quebec will be part of the solution, as well, in the long term, but we have to do all the things necessary to make that possible. We do have to get more investment in transmission in New Brunswick over time so that system is stronger. We have to ultimately strengthen the inter-tie between Nova Scotia and New Brunswick. We likely have to change the inter-ties to Quebec as well. I say “we” - I’m not talking about Emera, I’m talking about the collective electricity providers in the region.
It just came down to the fact that this was the simplest arrangement we could do that could get done and could make a huge difference to the Nova Scotia circumstance. That’s why it became first and that’s why it became the thing that we did, but I completely agree with you that we will do more. Part of that, I think, will include New Brunswick and it will include Quebec and it may include others over time.
MR. YOUNGER: That’s why I do see it as an opportunity as a companion, not as a replacement. I think some of the issues you talked about with the grid exist throughout that northeastern - I spent far too much time looking at grid infrastructure in the past few months, and that’s an issue in Maine and Vermont and just about everywhere.
MR. HUSKILSON: It is and if I could expand a little bit. We’re invested in the State of Maine as well - actually, we’re invested in every one of the New England States at this point. One of the things that we found was that there is congestion. From a Maritime-Atlantic-Maine perspective, there is congestion south of Maine that creates difficulties for this whole region as well. That’s the other thing that as a company we’ve proposed, is a new interconnection that would go from southern Maine to Boston basically. That interconnection will make a huge difference to this region as well.
We’re working together with a company called National Grid on that project and these things actually begin to fit together. When we get this project done, that will help with the project that we’re doing in New England, but as well, the New England project will help us access other energy for this region in other places. So, you’re absolutely right that there still is a lot of congestion and we need to over time relieve that congestion so that we can get more and more free flow of electrons in the region.
MR. CHAIRMAN: Thank you. We’re going to have to move on with our questioning. Mr. Epstein.
MR. HOWARD EPSTEIN: Thank you for the presentation, it’s really interesting. I have questions along the same lines really. The possibility of bringing in electricity from Hydro-Québec is an interesting topic and I ask about this for at least two reasons; one is that, of course, local organizations like the Ecology Action Centre and others have been raising this issue now for a little while. When I read as well the report of the joint panel for Muskrat Falls, the environmental assessment, one of the chief critiques that they made of the proposal is that they felt the fundamental economics of it had not really been adequately looked at which left Nalcor and the Newfoundland and Labrador Government kind of scrambling over the summer to try to put together an economic study for Newfoundland.
That suggests really that a project can get fairly far along in the planning and perhaps some important questions are left not sufficiently examined. That’s why I really wanted to ask about this possibility of bringing in electricity by Hydro-Québec, partly as an alternative and partly I guess what has been called a companion. Mr. Coolican spoke about that as an alternative and Mr. Huskilson, you seem to speak of it as something that would be a supplement that we might look to some day in the future.
Regardless of how it’s framed, I wonder if the contact has been made. So we could start with something as simple as that - has contact actually been made with Hydro-Québec? Has the province or has Emera actually contacted Hydro-Québec and asked them, do you have excess capacity? Do you have electricity for sale? What possible terms might be in your mind? Can we do business?
MR. HUSKILSON: The answer is yes, we actually have ongoing dialogue with all of the electricity companies in the region and Hydro-Québec is no exception. In fact, as a company we do a lot of business with Hydro-Québec and we continue to do a lot of business with Hydro-Québec.
Nova Scotia has not traditionally been a focus for Hydro-Québec simply because it’s hard to get to and there are lots of other closer places. The actual map that is up, the reason I brought this one was I expected we’d probably be talking about this. This gives you a sense - and it’s a little hard to see on the screen - of what the interrelationships are between each one of the various provinces and areas.
Quebec is an extremely large source of hydro-electric energy, there’s no question about that. Their interconnections, though, to the rest of the world are not huge compared to the capacity of the energy that they have in the province. For instance, between Quebec and the Maritimes it’s about 900 megawatts our way, 700 megawatts their way, kind of interconnection, that’s the limit. Again, I think Bill Marshall spoke about that in this article that a lot of that capacity is already taken up, it’s committed to other activities, so that’s something that has to be dealt with over time. It also gives you a sense of what the other interconnections are, so we can move 1,000 megawatts one way to New England, 500 megawatts the other way. But to your most simple question, we do talk to them, we have talked to them, I’ve talked to them very recently and I think - at the right time with the right effort - we will come to some sort of an arrangement with Quebec as well.
MR. EPSTEIN: You and Mr. Coolican are both saying that transmission upgrades would be needed in order to bring electricity from Quebec into Nova Scotia, or through New Brunswick to Nova Scotia, and no one doubts that.
I guess the question really would be, even taking into account transmission upgrades that would be needed, is there electricity available from Quebec and at a price, taking into account the transmission upgrades that would still make it advantageous for customers in Nova Scotia? Of course, you’re planning to spend a lot of capital money on the Maritime Link, as well, so there are parallels. The question still is, where do we end up?
MR. HUSKILSON: My understanding would be - and not different than the deputy’s - that Hydro-Québec would be more focused on a market-based price for their energy as opposed to a capital-based price that we’ve gotten from Newfoundland.
That’s not to say it wouldn’t be economic at the right time but it has a different characteristic, I would expect. That is traditionally how Quebec has sold their energy so I wouldn’t expect that would change, but that’s where we would be.
So they’re very different characteristics. In this case we are putting capital into the system and taking energy out of the system for 35 years. That effectively will have a declining price. The first year will be the most expensive year. Now, we’re able to mitigate that a bit because Newfoundland has agreed to give us five years of additional energy to reduce that front-end cost. But the first year will be the most expensive year and the last year will be the lowest cost year, in that particular type of pricing.
In the case of a market-based deal, which you would get from most other suppliers - I don’t think Hydro-Québec would be different - you would actually have generally an increasing price of electricity. It’s a very different characteristic.
MR. EPSTEIN: I understand that. You mentioned a couple of times that arrangements might be made between Nova Scotia and Hydro-Québec at some point in the future, and you talked about longer term and so on. Is there any number that you could possibly put on longer term? Are we thinking five years, 10 years, 20 years? What are we talking about?
MR. HUSKILSON: The first thing that has to happen is we have to come to an arrangement with New Brunswick on increasing the capacity of the inter-ties. We’ve been working on that, I think, for about the last 24 months and we don’t have that arrangement settled yet. That’s the real challenge, we have to get to the point where we mutually agree with New Brunswick as to what has to happen to the system and we haven’t gotten there.
MR. EPSTEIN: May I just say, because I know there are other questioners, you mentioned the complexity of a three-party negotiation, I’m sure it’s not beyond your capacity. Thank you.
MR. HUSKILSON: Thank you for your confidence.
MR. CHAIRMAN: Thank you, Mr. Epstein. Mr. Ramey.
MR. GARY RAMEY: Thank you very much. I’ve been listening with interest to your topic, in which I have a great amount of interest, specifically because of our aggressive targets for renewables. I was wondering if you could elaborate a little more on exactly where this cable will go when it leaves the province. I assume it goes across the Isthmus of Chignecto somewhere, or does it go undersea when it leaves Nova Scotia and goes to New Brunswick?
MS. NANCY TOWER: The cable itself that we’re talking about - the red cable - will leave Cape Breton and head over to Newfoundland.
MR. RAMEY: Understood. When it gets to Nova Scotia, do we go above-ground in Nova Scotia?
MS. TOWER: Yes, we’re not talking really about any upgrades in Nova Scotia. I think as Chris said, the existing transmission system can handle it.
MR. RAMEY: So we go out of Nova Scotia on the traditional lines that we have. The reason I was asking that is because of Fundy tidal power - and I realize we’re not there yet, we’re still working on that. Assuming that Fundy tidal power should come on stream, I believe you said, sir - and I may have this wrong, that’s why I’m asking - the capacity that we have now in the current system would be able to accommodate the onset of Fundy tidal power in the same grid configuration. Is that true?
MR. HUSKILSON: Yes, it is, and it depends on how much Fundy tidal power, but certainly a substantial hundreds of megawatts of Fundy tidal power could be accommodated with the system as it is today.
What this really does for Fundy tidal is it provides a balancing resource and a stabilizing resource to the electricity system in our region. What will happen with Fundy, no different than our existing tidal plant we have today, is it will have a sinusoidal, peaky output that as the tide flows harder or less, it actually produces more or less electricity, so it’s quite variable. What you have to do is have another source that you can follow that around with and that’s where the Newfoundland energy comes from is it can follow that tidal resource around. A small one like we have in Annapolis is not a problem for the existing system to follow, but as you get bigger and bigger it becomes more difficult to follow it, so this project actually gives you that following capacity.
MR. RAMEY: May I have another question?
MR. CHAIRMAN: Sure.
MR. RAMEY: My second one relates to a slide that we didn’t really cover in the presentation very much. It was Page 5, it was the one that was labelled structure. The tag line at the top says, the final agreement - we’re talking again about the Muskrat Falls Project - will be between the two governments, Nalcor and Emera and then it goes on to talk about how this may mean the application to the URB is not by Nova Scotia Power and then it finally says, URB would have oversight on all costs passed along to Nova Scotia customers. I think I get that, but I’m just wondering if you could just say a few more words on it?
MR. HUSKILSON: This whole thing is evolving, as you can imagine. One of the major factors of that evolution is the work that’s going on with the federal government. The province did a great job early on in making an application to the federal government for support on this and that really got the ball rolling. What has happened is that has changed from an application for support to an actual loan guarantee relationship, so a letter of intent or an MOU has now been put in place. The nature of that type of support means that we may have to create a separate corporate structure in order to be able to properly allocate these assets to that guarantee. As it evolves, it may well be that it’s not appropriate to have Nova Scotia Power’s corporate structure as the corporate structure that’s being used.
Regardless of what the corporate structure is and why it evolves to what it evolves to, it will still be subject to oversight by the regulator here in Nova Scotia and that oversight will be the same as it otherwise would be, whichever company is actually doing it. But it does look to creating the right structure to get the best support, to create the lowest cost solution for Nova Scotia customers. That’s really what the purpose of the structuring is, is to make sure it’s the lowest possible cost. If we can get the right relationship with the federal government which we think we can then that could allow us to put more leverage in place, so more debt as opposed to equity in place and that could allow it to be a much lower cost project overall. So those are the kinds of things we’re looking at and hopeful to be able to bring together.
MR. RAMEY: I do have more questions, but I don’t want to hog the time, so I’ll pass it on.
MR. CHAIRMAN: Thank you, Mr. Ramey. Mr. MacLeod.
MR. ALFIE MACLEOD: Thank you all for your presentation. This is a very positive thing for Nova Scotia and it’s exciting, but it’s a ways away and how do we get there? I guess one of the things that would interest us is you say this project will help you meet your renewables which is important, but what will it do to help stabilize power rates in the Province of Nova Scotia for the consumer between now and whenever? Is it going to stabilize rates or are rates going to keep on rising at an enormous rate? Where are we with the stabilization and making sure that the benefits to the consumer in Nova Scotia are met by this project?
MR. COOLICAN: Let me start and maybe Chris can come in later. It would be difficult for a project that isn’t built yet to stabilize rates, this is longer term . . .
MR. MACLEOD: There must be projections somewhere.
MR. COOLICAN: No, in the long run it does stabilize rates because when it comes in, it’s a fixed contract for 8 per cent to 10 per cent of our load for 35 years, so that will have a stabilizing influence on prices. We’re already starting to see - from some of the investments that were done earlier around renewables - the benefit of a stable, fixed price. For example, a wind farm that was built in the Pubnico area in the early 2000s when it was built, was more expensive than electricity from coal. It is now at the same price as electricity from coal and yet its price will stay stable, and who knows where coal is going to go, plus we are required to get off coal. So renewable projects may have an impact in the early stages but its long-term impact is to stabilize.
The renewable electricity plan that we put out last year says that the cost of renewables to meet the 2015 target, on average, will be 1 to 2 per cent a year on rates. We are on track to do that, in fact, the impact to date has been less than that; we expect it will go up again over the next couple of years. But the real impact on power rates over the last number of years has been the increasing price of coal.
MR. MACLEOD: Thank you for opening that door.
MR. HUSKILSON: Could I just add to that. There are actually two different types of renewable investments that end up getting made. One is the one that Murray just described, which is a flat contract for power over a 15-, 20-, 25-year period. The other is the investments made by the utility itself, which is what this one will look like.
When the utility makes wind power investment or an investment like this one, the nature of that pricing is actually declining. The very first year is the highest cost it will ever be and then it declines every year thereafter. The reason that is the case is because it is all about the capital - there is really no material incremental cost along the way, it’s just the capital. So the capital will decline as it depreciates over that whole period.
What we have been able to do is use tax benefits so the tax deferrals that exist in the federal rules on renewables to reduce the front-end cost of these renewables and then the back-end costs decline anyway. Murray is right to say that the net cost of adding renewables in the early years is the 1 to 2 per cent over a short period - let’s say the five years - but the long-term value of those renewables accrues to customers for a very long time.
If the utility owns a wind farm and that wind farm lasts for 25 years, it was the lowest possible cost it could be in that 25th year, and then it can probably be reinvested, the cost of reinvesting is likely only 30 or 40 per cent of the initial cost. You reinvest in that wind farm and it goes for another 25 years at a much lower cost again. In the long, long term, these investments will be very low-cost investments for the customer base.
The trouble is that the pain happens now, on the very first year they are put in service. When you get into these things being quite mature, we’ll actually see declining costs from each one of them, either wind farms owned by the utility or this project owned by the utility, it will continue to decline in price.
To your question, this will create much more stability because it will be a declining cost over that long period of time.
MR. MACLEOD: If I understood you correctly, Nancy, you said that the transmission system is in place in Nova Scotia, that there would not be any need for any - well, would there be a need for any upgrade, I guess is my question?
MS. TOWER: No.
MR. MACLEOD: That, to me, is disturbing because one of the things that is going on right now, that we’re told anyway by a number of people who would like to develop wind fields - especially on Cape Breton Island - is that there is a bottleneck at the Canso Causeway and there’s not the ability, even if we could bring on major wind projects in Cape Breton. The corporation doesn’t have the capacity to bring it across the Strait of Canso and then move it on to the other parts of the structure.
If there’s going to be major investments made in transmission and if we’re looking at spending billions of dollars to bring energy in from Newfoundland, would it not make sense to also look at the capacity to take more wind projects across the Strait of Canso? There are at least three projects that I am aware of, looking in excess of a high of $100 million of private investment each to move forward. They are told - at least they are telling me they are told - that they can’t go forward with their projects because Nova Scotia Power doesn’t have the capacity to move their product off Cape Breton Island and into the grid and other areas of Nova Scotia.
MR. HUSKILSON: Yes, that fundamentally is true, what is being said. Let’s just back up to see how this deal will actually affect that because it actually could affect it in a good way.
MR. MACLEOD: That’s what we’re hoping.
MR. HUSKILSON: We don’t know yet definitively but it could affect it in a good way.
First of all, the way that we’re moving this energy on the existing system is - as Murray said earlier - we have to reduce the amount of coal we consume anyway. So we’re reducing coal consumption in Cape Breton and replacing that with this energy, so that’s how we have room on the existing system. Unless we have that energy to replace it with, that reliable firm energy to replace it with, we can’t replace the coal that way. That’s how we’re going to free up room on the system to do that.
The second thing though is that there are two terawatt hours of energy that very likely will flow across the Nova Scotia system as part of this. So it’s five terawatt hours they create; two terawatt hours go to Newfoundland, one terawatt hour to us firm and then two more terawatt hours to be distributed somewhere. If that flows through us or to us, that will increase the amount of transmission revenue that comes from this project and that will actually allow us to invest more in transmission to do exactly what you said to alleviate some of those bottlenecks.
We don’t know for sure if that’s going to happen yet. It very likely could happen as part of the project. If it does, that could allow Nova Scotia Power to invest up to a few hundred million dollars of additional transmission and the first thing they would do is alleviate those bottlenecks that you’re talking about. Those bottlenecks exist today because the system was built to accommodate the generation that’s there. What we’re doing is displacing some of that generation with this because we have to anyway and so that allows us to put this in place. If we have more energy flowing on a regular basis that generates more revenues from transmission, then the company can invest more in transmission and not have an effect on the customer base.
The worry would be that if we had to make $3 million, $4 million or $5 million of investment for that additional incremental wind, then the customer base would have to pay for that. That would make that wind very expensive and today there are other places that we can put wind farms on the system that don’t need that kind of investment and that’s why it is as it is. The project could very easily generate enough transmission revenue to allow that investment to happen.
MR. MACLEOD: I guess that would be our point. It’s an enabling factor that could allow for some more private investment into energy to help make the rates more stable for the people in the Province of Nova Scotia. Now I’m going to change gears a little bit to coal, if I can.
MR. CHAIRMAN: A quick one.
MR. MACLEOD: No such thing in my vocabulary. (Laughter) What I will do is I will pass and ask to be put back in the question listing end.
MR. CHAIRMAN: We have another member who was a little late getting in, so he may introduce himself.
MR. CHUCK PORTER: Chuck Porter, MLA for Hants West. I do apologize but unfortunately some people have issues driving in the rain, I guess. It was a bit of a fun drive in. I do apologize for being late.
MR. CHAIRMAN: You can also ask questions.
MR. PORTER: Thank you. What is the amount of power being generated today in Nova Scotia? How many kilowatts or megawatts, I guess, is what I’m looking for?
MR. HUSKILSON: On an annualized basis . . .
MR. PORTER: No, per day.
MR. HUSKILSON: Per day? I’d have to do some math.
MS. TOWER: The way I think about it is in terms of our capacity. At a very cold winter day in December, probably about 2,300 megawatts at any moment in time.
MR. PORTER: What is the requirement? How much are we using? Is that what we’re using?
MR. HUSKILSON: Yes.
MR. PORTER: That’s the total we’re using? That’s totally generated in the province?
MR. HUSKILSON: Yes. The way it works today is that the provincial generation will be brought up to meet the provincial load, unless there is an external source that actually has a lower cost. If there is an external source out there that has a lower cost, we’ll use the tie line to its limit. Some days that is zero, some days that’s 100, some days that’s 300. They’ll use the tie line to its limit to actually reduce the cost.
MR. PORTER: If I understand it correctly, that’s monitored hourly. Is that right? Whether you’re buying, you’re selling . . .
MR. HUSKILSON: Every 10 minutes actually. Every 10 minutes a decision gets made on that.
MR. PORTER: Can you tell me on an average day, and I don’t care if you pick a winter day or a day like today, what is the percentage - you must have enough doing it every 10 minutes that you can point this out. What is the amount that you’re bringing in versus what you’re generating and using to meet your demand?
MR. HUSKILSON: I think we could provide a very specific answer to that. We’ll have Nova Scotia Power provide that answer for you, but in general, there are a couple of hundred gigawatt hours that are purchased out of 11,000 gigawatt hours that are produced. Nova Scotia Power could give you a very specific answer if you’d like one.
MR PORTER: I guess there must be days and times in the hour when we’re over-generating and you’re selling as well?
MR. HUSKILSON: It happens occasionally but not as much as it used to, I would say, mostly because of environmental restrictions. There would have been a time that we would have sold a lot of coal on the back shift, when it wasn’t being used in Nova Scotia, but these days we have such tight environmental caps that we would really be focused on domestic load. A lot less sales these days, yes.
MR. PORTER: Thank you, and just then moving on to the big project with Newfoundland then. So we’re looking at an increase of potentially 20 per cent, it’s going to cost you billions of dollars, and there’s an opportunity for 20 per cent of this load to come through Nova Scotia. With that 20 per cent coming in, and we’ll just do easy numbers then, 20 per cent in - do you stop making 20 per cent in Nova Scotia through other means? Is that your reduction in the coal over time or whatever it might be?
MR. HUSKILSON: Yes, the actual amount that would be part of the initial deal, the 20 per cent for 20 per cent of the cost, is one terawatt hour, which is about one coal unit, that’s about what it is. So 1,000 gigawatt hours is what a normal coal unit would produce so that will require to back down that one coal unit.
MR. PORTER: So all of the power coming through will get used in Nova Scotia, for the most part, if I’m hearing you correctly then, that you’re bringing from Newfoundland?
MR. HUSKILSON: No, there will actually be three terawatt hours that come from Newfoundland, one terawatt hour will get used in Nova Scotia, the other two terawatt hours we don’t know yet. Some of it could get used in Nova Scotia or could get used in parts of the rest of the market.
MR. PORTER: Just a moment ago we talked about - and this is what I’m getting at here, I guess -right now, you’re not selling based on whatever the rules are around not being able to sell. Are you telling me then that when the other two terawatt hours come over, there’s a potential to sell that off further south or whatever you might want to do?
MR. HUSKILSON: There is but that would be Nalcor’s responsibility to do that. The reason it could be sold is because it’s clean energy.
MR. PORTER: Okay, I’m there, I’m with you, I want to move along with that. So okay, Nalcor writes an agreement, not Emera or Nova Scotia Power. They write an agreement with a buyer, it doesn’t matter, ABC buyer, south of us or wherever - it flows through Nova Scotia, though.
MR. HUSKILSON: It very well could.
MR. PORTER: So Emera makes a profit on the sale of that two terawatts?
MR. HUSKILSON: No, the way it works is that transmission revenue goes back into the revenue requirement for Nova Scotia Power, reducing the cost for customers in Nova Scotia, or - as we said with Mr. MacLeod - we invest more in transmission to allow other things to happen. One of those two things happens but either way, it is related to the customer base.
MR. PORTER: I guess the reason I am asking is that the customer base would argue probably that they haven’t seen much by way of any stability or reduction. If I’m hearing you right, you’re saying that there is a potential for the two terawatt hours to actually reduce costs, they’re going to dump the money back in?
Also, from your presentation, you’re going to own 100 per cent of the Maritime Link when it is all said and done. I’m going to assume there will be maintenance costs to that? There’ll be upkeep that won’t be cheap, I am going to assume also?
MR. HUSKILSON: Well it’s all factored into the cost.
MR. PORTER: What kind of savings then are we looking at here, do you think, projection-wise? When you are coming to the people for revenue requirements, certainly there must be a number that says okay, with all of this taken into consideration, that year two, three, whatever it might be of this project, we’re going to start to see rates stabilize or fall - I can’t imagine but anyway, I’ll keep an open mind here - what are we looking at? How far out?
MR. HUSKILSON: Well it’s still a bit too early to tell exactly. The reason is because we are just at the term-sheet phase. We actually haven’t finished all the definitive agreements.
What we’ll be doing from a step-wise perspective is we’ll be finishing the definitive agreements by the end of this year. Those agreements will specify things like how much energy will flow, how it will get configured, what the absolute costs will be - all those kinds of things. Then sometime in 2012, we will actually make an application before the regulator which will outline all those things you are asking about. We just don’t have enough information yet to outline all those things.
Nothing will move forward until the regulator looks at all those circumstances, understands them and decides that they are good for Nova Scotia customers. If they don’t believe that’s good for Nova Scotia customers, then the project won’t proceed. That’s the biggest single criteria that the definitive agreements will have - it will require Nova Scotia regulatory approval to proceed.
MR. PORTER: Just quickly, I know that we’re moving on; I’ll get one more in here maybe. On your slide that you have up there, because of federal loan guarantee Nova Scotia may need to consider a separate regulated entity to ensure lowest cost for customers. This may mean the application to the URB is not by Nova Scotia. The URB would have oversight on all the costs passed along to Nova Scotians. Well they have that now and so does the government because they control it, but who else would be making the application to the URB, in your opinion?
MR. HUSKILSON: We don’t know exactly yet, but it could be Emera Newfoundland is one possibility, which currently is the owner of the Maritime Link. The main structural issue is the federal loan guarantee and depending on how the federal loan guarantee gets structured, it may well be required to segment those assets into a separate entity and then that separate entity would be the regulated entity. We’re still a little bit too far down the road to understand. Because of the fact that the way people are looking at it today, I just thought it was important to understand that it could evolve in that direction. We didn’t want that to be a surprise to people if it does, but it’s mostly being driven by the loan guarantee.
MR. PORTER: So what is the best deal for Nova Scotia? You being Emera, obviously you’re a Nova Scotia company that is supposed to be looking after the best interests of Nova Scotians in this deal. You said a moment ago, if it’s not a good deal we’re not going forward probably. What is the best deal here just on those few comments alone and what is our best case scenario?
MR. HUSKILSON: I think our best case scenario is that the first 20 per cent is at the project economics and we keep to the $6.2 billion or so; that we also take some more energy from the project because we believe that will be at a lower cost and that energy helps to balance the overall energy cost for the project. The combination of those two things is what Nova Scotians actually see as the cost of this project. That’s what I think is the best scenario. To me, we should be consuming one and a half to two terawatt hours of this energy and I think that will provide the best benefit, but that’s still to be determined.
MR. PORTER: Of the $6.2 billion investment, how much of that is going to be borne by the taxpayer/ratepayer?
MR. HUSKILSON: The Nova Scotia piece would be $1.2 billion.
MR. PORTER: Coming out of the provincial government taxpayer purse?
MR. HUSKILSON: Well, going into a rate base that was supported by the ratepayers of Nova Scotia.
MR. PORTER: Coming out of the taxpayer’s purse, okay.
MR. COOLICAN: Sorry, not coming out of the taxpayers.
MR. PORTER: The ratepayers are the taxpayers.
MR. COOLICAN: No, there’s a difference between ratepayers and taxpayers.
MR. PORTER: Not to me, there isn’t; one and the same. Thank you.
MR. CHAIRMAN: Ms. Zann.
MS. LENORE ZANN: Thank you so much for coming in. I do find this a very exciting project and I have ever since I first heard about it before we signed the deal. I’m aware of Baltic Cable and I’m aware of Basslink Australia-Tasmania and they’re very successful already. It says here that you’re going to be having environmental assessments; that they’re underway and that they’re on track and there is going to be a project description filed in November. I’m just wondering, in your opinion, any of the facts that are coming back yet - is there anything there environmentally that will be potentially a problem or are there ways of getting around it? Would you like to comment on that at this point in time?
MS. TOWER: We will go through the provincial and federal process for an environmental approval. That will be about a two-year process, which begins with filing our project this year, this Fall. Our objective is to do whatever we can to mitigate any environmental impacts, so the biggest part of the project obviously is the connection, the undersea cable. Today there would be communications cables that would be coming across through there. Again, our objective is to either find a trench and bury it or cover it up so that it is not an environmental issue, but that will all be part of the environmental process.
The other thing is, I think the onshore, right along the shore - we have to be concerned about fisheries and we’re engaging groups that fish through that area. To the extent that we could mitigate that with a horizontal drill and actually put the cable in the rock and not disturb the fishery over the long term, that would be our objective as well. I think those are probably the two biggest parts of it.
MR. HUSKILSON: I think the only thing I would add is that this is not new. As you said, there are a lot of cables out there today in similar kinds of circumstances. In fact, there is one that just went in service across the San Francisco Bay, so this is becoming much more common, so from an environmental perspective I think it’s pretty well understood right now. The fishery, as Nancy points out, is the most important thing for us to consider.
MS. TOWER: Murray put up the slide which shows the different lengths of cables and the amount of them certainly around Europe and . . .
MS. ZANN: Right.
MR. HUSKILSON: And the length of our cable is that yellow . . .
MS. TOWER: This small yellow . . .
MR. HUSKILSON: Compared to the length of the other, so it’s not long compared to the cables that have been put in service.
MS. ZANN: Great. I notice P.E.I. isn’t connected there at this point in time. I know that P.E.I. is interested, where does that stand right now?
MR. HUSKILSON: I think P.E.I. has one single interconnection to New Brunswick today; they would like to put another interconnection in place. I think if they did that that would allow them to participate better in this type of project. I think that’s where they’re focused right now, but they have been very supportive as well.
MR. COOLICAN: I’ll just add to that that Prince Edward Island is involved in the Atlantic Energy Gateway work between the four provinces. One of the issues that we are discussing is what the benefits are of better integration among the four provinces in the way the electricity systems are run in each of the provinces. Prince Edward Island is certainly interested in that - and we’re all interested - as a potential way to reduce costs.
MS. ZANN: I think that’s exciting and again, I have always applauded the Premier’s vision of having a regional Atlantic Canadian partnership in this. I really wish you well in this in the future.
I have two quick questions about solar. Are you still looking at solar energy here in Nova Scotia and trying to do more with photovoltaics?
MR. COOLICAN: From the point of view of the community feed-in tariff where there has been interest expressed in solar, we’re continuing to monitor the cost of photovoltaic to see if it will come down further. It is moving in the right direction, and when we review the renewable electricity plan that’s one of the issues that we will look at.
What we are doing on the solar front is we are looking at ways to support the work, for example, of the Halifax Regional Municipality, in getting homes to use solar for hot- water heating. We will be continuing to support that effort because, first of all, we do think there are energy issues beyond the electric system for people and we think that solar does have a place. At this point the economics are much better for solar thermal as opposed to solar photovoltaic, but we will continue to monitor the photovoltaic.
MS. ZANN: Great and maybe net metering will be coming into place at some point soon.
MR. COOLICAN: Well, net metering has come into place and that opens up solar for individual homeowners, but I think some people would like to see solar photovoltaic as broader than that, and achieving a feed-in tariff and not simply as net metering. Until we see further reduction in the price we’re not there yet, but we’ll continue to monitor it. There are a few people who are helping to make sure that we continue to monitor it.
MS. ZANN: Good. Thank you very much.
MR. CHAIRMAN: Mr. Younger.
MR. YOUNGER: Thank you, Mr. Chairman. I guess we’re back around the other side. I’m going to start with the question that everybody is going to want to know and I have a fear you’re not going to tell me, but there are a lot of numbers out there so I know you’re talking about it in boardrooms, what is the expected landed price of energy from Muskrat Falls?
MR. HUSKILSON: We still don’t know the number. I think what we do know is that it’s going to be in line with other alternatives, so that’s what we’d say and that is the year-one pricing. We will absolutely know the numbers by the time we file the application so when people are actually looking to make this final decision, they’ll have the numbers in front of them. But until we get the capital costs well defined, until we get the definitive agreements in place and until we understand how much additional energy is available, those are all factors that will go in here.
There are really three fundamental sources of value for Nova Scotia customers. One is the energy itself, the 20 per cent; the second is incremental energy, which we think will come at a lower cost and the reason is because Newfoundland will be looking at New England as the alternative; and the net back - the cost of getting it to New England versus the cost of buying it in Nova Scotia - will be lower than the New England price, so that’s a value that should be there.
Lastly, as we talked about earlier, the amount of transmission revenue that comes. Those three things will be the sources of value for Nova Scotia customers and they will form a package which will get to that number. We just don’t know all those facts yet.
MR. YOUNGER: You undoubtedly are aware that people are talking 14, 15, 16 cents a kilowatt hour, and I do understand that doesn’t mean that’s what you pay on the bill because there are lots of other things and it averages in with the other sources but is that the sort of . . .
MR. HUSKILSON: Well that won’t make it. That kind of number won’t make it.
MR. YOUNGER: Why?
MR. HUSKILSON: It’s too high, so it has to be lower than those kinds of numbers.
MR. YOUNGER: That’s good.
MR. HUSKILSON: We won’t bring forward something that is not going to make it.
MR. YOUNGER: I’m asking the question because you can look at the COMFIT rates and that and obviously that’s for a very tiny amount of electricity but they are higher than that, so when people hear it’s competitive with other sources, there’s a wide range of sources out there on the market.
MR. HUSKILSON: With other alternatives it would fit the same bill, so with other large scale, wind and that kind of stuff is what we would say it is competitive with.
MR. YOUNGER: So we have this one terawatt hour that we get as Nova Scotia. Let’s say that we want to buy the other two terawatts, and I’m not suggesting that we would buy the entire thing, but would that be at the same price, a lower price or a higher price than that first terawatt?
MR. HUSKILSON: Depending on how we buy it, if we could buy it on the same terms then it would be at the same price but if we bought it on different terms, for a shorter duration or those kinds of things, we would expect that at least in the early years, it will be a lower cost. In the later years, it might be a higher cost, because of the fact that there will be a crossover with this cost.
MR. YOUNGER: One of the things that has concerned me about this - and I’ve heard a lot of reasons, some of which seem reasonable, some less so - is that the cable that is being laid between Newfoundland and Labrador, and Cape Breton will accommodate this project but really would not accommodate energy from future expansion of the Churchill Falls project, should that happen at some point in the future. Is that accurate?
MR. HUSKILSON: It ultimately depends on what you are talking about. It certainly will accommodate incremental energy above this project, it will do that, but it won’t accommodate another total redevelopment of the Lower Churchill.
I think that’s an important issue. It was raised earlier that the joint panel actually had issues with the economics of the project, et cetera. The reason they did was because what was put forward was the total project. The total project was not just Muskrat Falls but also the Gull Island project and the transmission. That’s what the total package was that they looked at.
Of course the Gull Island project, which is about 2,300 or 2,400 megawatts, is a lower cost project. It is a lower cost per megawatt hour project. It’s a heck of a lot more expensive project because it’s a much bigger project, so what Newfoundland and Labrador has chosen to do is to put forward the smaller project first because it is something the market can absorb and between Nova Scotia and Newfoundland it makes sense. They were criticized by the panel for not taking the best project forward first but there is a practical reason to that relative to the overall size.
When you look at that, if you’re talking about that 2,300 megawatt project, no, it can’t accommodate that. But if you’re talking about a few - Newfoundland and Labrador would say they’ve got 6,000 megawatts of hydro, this is 824 megawatts of that 6,000, so a few hundred more megawatts of hydro can be accommodated likely by this infrastructure.
MR. YOUNGER: I want to ask something about the environmental side because this is also often touted as an environmental project and that’s mainly because of the emission side because, of course, hydro is emission-free and I think we understand that. This project does involve, as you well know, flooding. Any hydro project involves flooding substantial land and I know that most, if not all, of the land claim issues have been sorted out for the purpose of that. I was actually working in Labrador years ago when this was a challenge then.
We can stand here and say we don’t care about the fact that there’s going to be an environmental impact of this project in Labrador but it’s no different than if we buy coal from Colombia. We should care about the human rights issues there, we should care about the environmental issue in Labrador. How are Emera and its partners planning to manage and mitigate that environmental impact?
MR. HUSKILSON: I may start and others may want to chime in as well. First of all, I think this project has minimal flooding. It does have a small bit of additional flooding but it’s minimal and so, in fact, in large part this project is a run-of-river project. As compared to other hydro projects of this scale, it has a very small amount of flooding and the reason is because all the dam is actually way upstream at the Churchill project. This is really just taking the outflow from the Churchill project and reprocessing it through a much lower drop that exists at Muskrat and Gull Island. From that perspective, it’s a relatively small footprint.
On top of that, the work that has been done with the local communities in Labrador is doing the work that needed to be done. Nalcor has done an awful lot of work in Labrador around this and that’s what the joint review panel looked at. We would say that the recommendations from the joint review panel are all in line with what Nalcor is working towards as well. That’s what we take comfort in, the work that has been done there, and as you said, most of the arrangements are now in place with the local communities.
MS. TOWER: I’ll just say - you can’t really see it. I think your point is that the Smallwood reservoir which exists right now for the Upper Churchill was quite a substantial amount of flooding in its day and is a huge body of water. There will be some flooding on the sides but the river comes down almost in a natural basin on the sides and so there will be a lot of trees that will get covered with water, but it won’t be anywhere near the extent of the upper.
MR. YOUNGER: The last thing I just wanted to ask about that then is, in terms of the placement there has been talk about Point Aconi and there was another site.
MR. HUSKILSON: Lingan.
MR. YOUNGER: Lingan, thank you. Has there been any further development on where the landing site would be?
MS. TOWER: What we have to do is lay the cable and build two converter stations to convert it from direct current to alternating current. We think the best place for one of those converter stations is on an existing high voltage substation that we have today. If you look at that, it likely favours the Point Aconi site, but we’re not at the detailed engineering, but that would be our hunch, if you will, right now.
MR. CHAIRMAN: Thank you Mr. Younger. Mr. MacLeod.
MR. MACLEOD: This has all been very interesting, but we have to get back to - by your own admission today, we’re still going to be burning coal in 2020 and years after that. It could be more than the 35 percent that is projected in your slides, depending on how this project moves forward and if all the regulations and proper procedures are put in place.
You talked earlier about how coal has gotten 75 per cent more expensive and that money is going out of the country to make it happen so that we can burn coal. It is my understanding - and I could be wrong, it wouldn’t be the first time - that even though coal has increased by 75 per cent, it’s still a third of the cost of wind generation when it comes to making electricity. It is my understanding that we have good, quality coal here in Nova Scotia that we’ve used for many years in the past and we could use now; coal that is higher in BTU quality, it doesn’t have the transportation costs that are associated with importing coal and we could put Nova Scotians to work rather than people in Colombia or other countries. It would have a direct benefit on jobs for Nova Scotia. It would have a direct benefit for the CBRM as far as a tax base, and it would have a benefit for the Province of Nova Scotia in relation to the jobs that could be created in excess of - we’ll use conservatives, no pun intended - somewhere between 800 and 1,000 jobs by the time you look at the actual mining jobs and the spinoff.
Now, I understand that there are some challenges with the quality of the coal - not with the quality, but some of the emissions that come off the coal. Challenges, by the way, that I’ve asked Nova Scotia Power on different occasions to explain what it is costing now to remove mercury from the coal that is being imported and what the variance would be between coal that is being produced in Cape Breton. I’ve asked that on three occasions - one of them in this very room - and it has never been answered. The question is, why is it that Nova Scotia Power - at the rate hearings when it was said - fuel costs went up by over $40 million because coal sat on the ground and got saturated with water and it wouldn’t burn as well. As I understand it, what you’re looking at when you’re buying coal, there are several things that come into play: BTU, of course, moisture, ash and sulphur - and that might have something to do with my days working at the Cape Breton Development Corporation.
So we have one of the biggest supplies of coal in the world here in Nova Scotia. We have the technology to produce that coal. We have technology to burn it clean. We have most of the infrastructure already in place and we’re talking about upfront costs as where the expense comes from in producing electricity, so we have these things in place.
Big money was spent by Nova Scotia Power to put an unloading facility in Port Hawkesbury for coal, there was also money used to purchase the international pier in Sydney. We have all of these structures in place, we know we’re going to be burning coal in Nova Scotia for at least another 10 years by your own admission, by your own charts; we’re going to have to burn it. The question that burns in my heart and in many people’s hearts is that we’re going to be burning coal, so why is it we’re not burning Nova Scotia coal and putting Nova Scotians to work, rather than burning coal from overseas and creating employment and wealth for somewhere else and not here?
Yes, we have the ability to mix coal here; we get coal out of the ground with sulphur content of less than 1 per cent in Stellarton. We burn pet coke in Point Aconi, which is probably the dirtiest product that you could ever want to burn and if it hadn’t been for the technology they put in place there with the fluidized bed, it couldn’t be done. Why is it that if we’re going to have to burn coal we’re not going to be burning Nova Scotia coal to meet Nova Scotian needs and have a made-in-Nova Scotia energy plan?
MR. HUSKILSON: I think first of all we do burn Nova Scotia coal.
MR. MACLEOD: Not enough.
MR. HUSKILSON: We burn - 10 per cent or 20 per cent of our coal is from Nova Scotia. I think we continue to look at this opportunity, but one thing that has been unknown to us is where the federal government was going to go on coal. Until we actually have some certainty as to what the life is of these plants and what the rules we’re going to live with are - even the rules that we’re talking about right now are rules to 2020, we really don’t know what’s going to happen post-2020, so we need to get some certainty as to what our future looks like from an environmental rule perspective. With that certainty, I think the possibility does exist to actually put investments in place that will allow that to happen, but it takes that certainty, it then takes investments.
Mr. MacLeod, you know this very well. We tried to put a scrubber on Lingan some years ago - in the 2005 time frame - and at that point the stakeholders said that wasn’t the right thing to do because there wasn’t enough certainty as to where the future was going. So as a company we’re not against actually investing, to actually allow us to burn local coal, but we have to understand what those circumstances are so we don’t spend money that ends up being stranded for Nova Scotia ratepayers.
I think as we start to learn better what the environmental rules are and as we start to see the life of these facilities, we’ll be able to make more decisions along those lines. It’s not good for anyone to start something that you can’t finish, and I think that’s really what the issue is right now.
MR. COOLICAN: I would just add to that that the provincial government has been encouraging Nova Scotia Power to have conversations, certainly with existing coal suppliers. As Chris mentioned, there is an existing purchase of some coal. There are some other potential developers that I think you’re probably well aware of and we’ve encouraged Nova Scotia Power to meet with them. We think it would be a positive thing if there was more Nova Scotia coal being burned, assuming it can meet the environmental regulations and that it’s cost effective.
You’re right that in 2020 it looks like there will still be a significant coal burn. In spite of the tremendous transformation that our electricity supply will have gone through, there will still be significant coal and it could be more than 35 per cent. I think the issue there will be the price of natural gas and given the federal coal GHG regulations, there will be an issue as to how much of that can be natural gas, burned in what manner, vis-à-vis coal. So the coal content could be more than 35 per cent.
The other things that we’re looking at and monitoring, there’s work being done at Cape Breton University around underground coal gasification, which we’re continuing to stay in touch with them, which is another potential opportunity to take advantage of the coal resource in Cape Breton. There has also been some interest as well in coal-bed methane, not just in Cape Breton but in the Pictou-New Glasgow area and we’re continuing to look at that as well. The more Nova Scotia resources that are used in Nova Scotia the better, as far as we are concerned.
MR. HUSKILSON: Just to put a fine point on the issue of putting capital to work, we put $45 million into Trenton to reduce its emissions within the last couple of years. Now the current federal rules, if you took them absolutely literally, would shut that plant down, and that’s in a very short time frame. We do have to have enough certainty that we don’t strain costs for customers and that’s the thing that we all have to work collectively to get the federal government to create some certainty for us so we can make the right investments.
MR. CHAIRMAN: We’re running close to our time so if you have just a . . .
MR. MACLEOD: I guess I would just like to make this comment. When our government brought in the sustainable goals program and we looked at it and thought it was the real thing because it needs to be moved forward, we believed that we have to look at different forms of energy and we looked at the fact that it was a 15 per cent ceiling, not 40 per cent, because not only do we have to bring it in, we have to bring it in in such a way that it doesn’t impact the economy or jobs or other things of that nature as you are moving it in. So you move it in slowly so there’s less of an impact and people can adjust to the different rates that may happen because of it.
I think it’s very important for Nova Scotians to understand that the more we can be relying on a made-in-Nova Scotia energy plan, the more chance there is of more stable rates for the Province of Nova Scotia. When you are buying coal offshore, with a different currency, in a different climate, transportation costs - all those things come back to affect the ratepayer here in Nova Scotia. We should collectively - as a province, as a utility - be looking at a made-in-Nova Scotia solution, not only from today, which would include this link, wind power, solar, hopefully tidal power and for a period of time that none of us can determine at this point, it is going to be coal.
It is my understanding that there is some work being done to try to convince the federal government to look at what they’re talking about because not only is Nova Scotia being affected by this dictation of how coal-fired generation should be done, it has a major effect right across many provinces in this country and, in turn, has an effect on the bottom line of how industry is going to be able to survive, jobs are going to be able to be kept in the market.
We, as a province, need to be leaders, making sure that we have a Nova Scotia solution and not rely on offshore countries to supply the raw materials to do the work that we need to get done here. We need to make sure that the ratepayer is our first thought, not our last thought. Thank you.
MR. CHAIRMAN: Thank you, Mr. MacLeod. Mr. Ramey.
MR. RAMEY: Just a quick one here, in relation to tariffs. If I have this correct, does Nova Scotia get a tariff for having the electricity move over our territory?
MR. HUSKILSON: Yes, the Nova Scotia transmission system would charge a tariff to Nalcor to move the energy. That tariff would go back into the revenue requirement and reduce the cost of electricity in Nova Scotia.
MR. RAMEY: I thought that was what you said, but what is the tariff or how is it computed?
MR. HUSKILSON: The transmission system is put into a cost base and then that cost base looks at how much will flow over it on an ongoing basis and then calculates the number. It’s about $6 a megawatt hour, I think in that neighbourhood.
MR. RAMEY: So in terms of the terawatt hours that we talked about before when I think you said, and I may have this wrong, Newfoundland two, us one and then there are two others up for grabs and we might take some of it - if we take some of that, then that increases the tariff?
MR. HUSKILSON: Yes, it would be a substantial amount of money, tens of millions of dollars, that’s right.
MR. RAMEY: Thank you.
MR. COOLICAN: I wanted to make a comment on Mr. MacLeod’s last comment, if I might. I want to address the federal coal regulations because their objective is to try to reduce greenhouse gas emissions and Nova Scotia agrees with that objective. Coming out of the EGSPA legislation that you referenced and our renewable electricity plan, we have a plan that reduces our GHG emissions in a way that is most economic for Nova Scotia ratepayers. We are actually a leader in the country in setting targets for GHG reductions. We’re the only province in the country with hard caps. What we’re asking of the federal government is that they allow us to meet the targets that they’ve set and our plan actually exceeds - up to 2020 - the federal target. We’re asking them to say, okay Nova Scotia, you meet those targets according to your plan as opposed to our plan.
In our view, our plan is better for ratepayers and it’s better for citizens across the province in terms of maintaining the opportunity to produce electricity at reasonable rates. The concern we have with the federal plan is that it goes to reaching specific targets; not by reaching the targets, not by the best plan but by saying, this plant has to close. That’s not the approach that we want to take. We will reduce the amount of coal that’s burned; we will reach the GHG targets, but we want to do it with a plan that suits Nova Scotia.
MR. CHAIRMAN: Mr. Boudreau.
MR. JIM BOUDREAU: Just a couple of quick questions, one with regard to a bit of clarity, I guess, on the Maritime Link. I think you referred to the fact that link would be owned by Emera Newfoundland. Is that correct?
MR. HUSKILSON: What I said was today it is owned by Emera Newfoundland in the development phase. I think what we’ll do is we’ll decide what the best corporate structure is to create the lowest cost based on the federal guarantee. We don’t know exactly who it will be owned by in the end, but today Emera Newfoundland - Nancy’s company - is the one that’s actually developing it.
MR. BOUDREAU: I got the impression at some point during your presentation that was going to be looked at. I hoped it would be looked at by being a Nova Scotia Power company or is Nova Scotia Power looking after that because in doing so that would mean that any revenues associated with that would come back to what you had referred to, which was reinvestment in infrastructure and so on and at the same time give an opportunity to reduce rates.
MR. HUSKILSON: The reason that it’s not a problem is because there is no revenue from that company. That company will make the investment one time and what it will get back is megawatt hours, so it gets the one terawatt hour back. There are actually no dollars exchanged. What that company will then do is be obligated to deliver that to Nova Scotia customers and then from the point it hits the Cape Breton shore, it will then be flowing over Nova Scotia Power infrastructure with Nova Scotia Power revenues. There is no dollar exchange anyway, so there is no threat to Nova Scotia customers.
MR. BOUDREAU: That’s very good to hear. I’d certainly like to commend all parties for the fact that we’re moving ahead with a plan, which unfortunately is being done at the eleventh hour. It’s something that I think Nova Scotia should have been looking at 20 years ago; however, we’re there. One of the concerns I have had is that there has been great talk about the targets being too aggressive, but as Mr. Coolican just mentioned, we are trying to meet targets that are not necessarily our targets. We agree with them, but those targets, as I understand, are basically flowing down from the federal government. Is that assessment correct? Either of you can answer that one.
MR. COOLICAN: I’ll start and Chris may want to add something. When the Legislature passed the EGSPA legislation and began to set us on this path, the government established targets and then later on established targets that were somewhat more aggressive. There were two reasons for doing this. One was the economic reasons for being dependent on a single source of electricity with a cost which is governed by international markets and international carbon markets. We thought it was risky to maintain the electricity system in that way. Secondly, for emissions, and I think that Nova Scotia as a province set itself on a course to reduce emissions. There are two reasons for that: one is it felt it should be a responsible citizen both in the world but also in the province in terms of reducing emissions; but also an expectation that others would be encouraging us, might I say, to meet certain targets. That has come to pass in that the federal government is now looking at regulations that will require us to meet targets.
We’re a province that already had a plan to meet those targets, but if people now are saying change course and reduce the targets and all that sort of thing, it’s no longer completely in our hands because the federal government is now setting targets. What we would like to see from the federal government is we’ll live by the targets, but we’d like you to allow a made-in-Nova Scotia plan for how we tackle those targets, rather than the federal government telling us which coal plants to close.
MR. BOUDREAU: Agreed, that makes perfect sense.
MR. HUSKILSON: The other hat I wear from time to time is I’m the chairman of the Canadian Electricity Association and the Canadian Electricity Association has been working with the federal government for almost two decades now on this issue of reductions. Today the federal government has an expectation of 24 megatons of reduction from electricity, so that’s what the sector’s obligation is. What they’ve done is gone around and looked at how might they do that, and that’s where this plan to shut down plants at 45 years has come in. So that’s really where the external drive from a target perspective is coming, although Nova Scotia is already ahead of that plan and doing it in a very effective manner. We’re just working hard with Ottawa to see if we can’t get them to listen to what we think is a better approach.
MR. CHAIRMAN: Thank you, Mr. Boudreau. We have to move along.
MR. BOUDREAU: Next time get me in the first round then. (Laughter)
MR. CHAIRMAN: Mr. Epstein.
MR. EPSTEIN: Just a very quick observation about stranded costs. I heard Mr. Huskilson refer at least once to stranded costs for Nova Scotia ratepayers. I have to say that not everyone would agree that stranded costs should be borne by the ratepayers and it may be that another model is appropriate, either moving away 100 per cent from ratepayers to something shared between ratepayers and shareholders, or 100 per cent by the shareholders. I think that’s a policy debate that is yet to be held, but will probably have to come at some point. I just wanted that on the record.
MR. HUSKILSON: I think what I would say is that we’ve had this discussion with the regulator many times and the regulator would say that if a project has been approved by the regulatory body then there has never been any experience in Nova Scotia where those costs haven’t been recovered, which is why we have the approval process for capital.
MR. CHAIRMAN: Thank you, Mr. Epstein. We’re going to have to move along and we’d like to give the presenters a chance to sum up with a short presentation and then we’ll move on to our committee business.
MR. COOLICAN: Thank you, Mr. Chairman. I think this has been a good discussion and I think it has been a good opportunity to bring some of the facts around this development out onto the table because there have been some issues raised that are not based on facts. I think this project fits in with Nova Scotia’s Energy Strategy which is about building a diverse, secure, sustainable, and affordable electricity supply with the added benefit of growing local jobs and growing the economy. In our view, the Lower Churchill project does all that for us. Thank you.
MR. CHAIRMAN: Thank you.
MR. HUSKILSON: Mr. Chairman, thank you very much. It has been very good to hear your questions today and to be able to interact with you. I think that’s an important part of advancing a project of this magnitude. It is a very large project and we certainly can’t forget that.
As an energy company, our job is to bring forward opportunities to customers and do the best we can to come up with the best solutions. As I said, this is not an obligation, this is an opportunity. I think as we go through the regulatory process on this, we’ll have an opportunity for stakeholders and ratepayers to understand it better and to also make decisions about it as we go forward.
However, it is a very substantial change in electricity for Nova Scotia. It provides a platform for the future and enables us to go much beyond our natural capability when it comes to things like renewables. So it’s a great opportunity and certainly I’ve enjoyed being able to talk to you about this. Thank you.
MR. CHAIRMAN: Thank you very much.
[10:51 p.m. The committee recessed.]
[10:54 p.m. The committee reconvened.]
MR. CHAIRMAN: Okay, if we can get on with our committee business. The annual report - everybody has had a copy or has seen a copy? (Interruptions) One comment and that was favourable. Is there any further discussion about the annual report?
Is the annual report approved? Is it agreed?
It is agreed.
Now we have a letter from the Mining Association of Nova Scotia asking to make a presentation.
MR. YOUNGER: They were already in. They just didn’t bring up this issue.
MR. PORTER: I would move that we meet with them, Mr. Chairman. It’s a valuable organization in the Province of Nova Scotia. We should probably at least give them the time that’s required to make their case, especially if they are, indeed, the only organization or one of the very few that are not exempted. They do create large employment in the province.
MR. EPSTEIN: I have no objection to hearing a presentation from the Mining Association, but we do have other proposed witnesses on the list. My suggestion is that if, indeed, we’re going to make an opportunity to hear them, that we nonetheless write back to them and point out that their proposal is one that affects the provincial budget, which is being developed right now and if they want to move quickly with their proposal they should make representations to the Minister of Finance as soon as possible because we may not be able to schedule them for some time. In any event, a direct approach to the minister is probably better than necessarily doing it here. I guess that’s my suggestion. I certainly don’t object to hearing from them, but I suspect that it’ll be a while.
MR. CHAIRMAN: Any other comments?
MR. BOUDREAU: The only comment that I have is that they’ve already presented and there are other groups that have been asking for a presentation. I have a little bit of concern. We have their letter and so on and I think they can make their case other than coming back in to do this.
MR. MACLEOD: All I can say is that I believe that any industry that puts $100 million into the economy of Nova Scotia is worth hearing and worth hearing from soon. To Mr. Epstein’s point that the fact that this does and could have a potential budget implication, I think that there is an onus on us to look at this sooner than later because I think we owe that to the people we represent in the different areas that have mining in their communities.
MR. CHAIRMAN: So it’s agreed that we have a presentation from them?
MR. RAMEY: Not necessarily. Is it agreed? I don’t think it’s agreed. We’re talking about it.
MR. EPSTEIN: I don’t think anyone is objecting to hear from them. The question is priority. The question is whether we try and slot them in right away or we deal with the suggestions that we have on our potential witness list and then turn to them.
MR. CHAIRMAN: I guess I was saying we all agree to have them make their presentation; it’s just when.
MR. RAMEY: Not necessarily.
MR. CHAIRMAN: To have them put on the list.
MR. PORTER: I think that what we have on the floor is a motion and I’ll just clarify. We do offer the Mining Association of Nova Scotia an opportunity to present before this committee, given the investment they make in this province, that we do that as quickly as we can, at the same time reviewing the list that has already been put forward and passed on the basis of similar activities by way of being urgent as well and necessary to come before this committee, but we would try to get them in, given that it is a budget allocation.
I would agree with Mr. Epstein’s comments as well that they too should be written to saying that we will meet with them, if that is where this motion ends up going, but at the same time that they do present in some way, shape or form to the Minister of Finance, give him their concerns in an effort to get a response from him and that we have some consideration going forward to budget time, because from what I’m hearing just quickly here we do not have an agreement as yet to bring this organization before us.
I think we’ve got the motion on the floor. We probably should look for a seconder, if we’re going to get one, and if not then wherever it goes.
MR. YOUNGER: What is the exact motion that’s on the floor?
MR. PORTER: The motion is to bring the Mining Association of Nova Scotia before us as soon as we possibly can, given the fact that they are an important organization in this province and that the losses that are currently occurring are substantial. Given that they are an anomaly, they appear to be different than most others. That can be shortened up.
MR. CHAIRMAN: First of all, I’m going to have to ask the committee’s permission to continue past 11:00. Is it agreed?
It is agreed.
MR. YOUNGER: Just very briefly, I don’t know if we’re meeting in December but I assume our next meeting is either December or January. The only thing I can throw out there - and I don’t disagree with anything that Chuck and Howard are saying, my only concern was that even if we put them on the very next committee meeting, they’re going to miss the opportunity to be sort of - I guess you can have a budget discussion right up to the day the budget passes, right? They would want to get in earlier so I would think that you - I haven’t heard anybody say they don’t want to hear from them, I think it’s a timing issue, right? I would say that we - I don’t know, I don’t want to speak for them but I don’t think they didn’t want to hear from them, I think they were just worried about the timing.
MR. BOUDREAU: That’s right. It’s about timing, priority.
MR. YOUNGER: All I want to say is that even the earliest opportunities, if we’re doing a December meeting it’s December but otherwise it’s still January, so they probably need to . . .
MR. PORTER: Hence the reason how I responded. I suggested in the motion to write back to them to let them know that we are not going to be able to see them probably for two or three months, if that even, depending on where your decisions go here from this list presented previously, and that they should not miss the opportunity to present to the Minister of Finance. I think that’s vitally important.
MR. CHAIRMAN: Is that satisfactory? Is it agreed?
It is agreed.
Okay, on our witness selections, we’ve got lists from the Liberal caucus, the NDP caucus and the PC caucus. Which two would you like to have in the forefront? We’ll start with the PC caucus.
MR. PORTER: Mr. Chairman, I would say that just given our list and now having added one more, that we would indeed put the Mining Association as one of ours. We would accept that and put it on our list as one of our top priorities. Mr. MacLeod, would you like to add from one of the others there?
MR. MACLEOD: Victoria Co-Op Fisheries Ltd. - No. 3 on our list, Mr. Chairman, Victoria Co-Operative Fisheries Ltd.
MR. CHAIRMAN: Okay. And on to the Liberal caucus.
MR. YOUNGER: The two we put forward are Nos. 1 and 3, so the Shubenacadie Canal Commission and the dairy producers.
MR. CHAIRMAN: Mr. Epstein.
MR. EPSTEIN: Nos. 4 and 5, if you’re asking for two - coastal zone management and the grape growers.
MR. CHAIRMAN: Okay. The Hansard distribution, is everybody satisfied to receive it by e-mail? Or do you want a hard copy? (Interruptions) All right, e-mail.
Our December meeting now, if the House is sitting we’ve got possibly two dates - there may not be a meeting in November so in December it could be the 8th.
MR. YOUNGER: Well, why don’t you do the 8th after the Speaker’s Christmas party, as there’s a good bet that the Legislature will be out by then. (Interruptions)
MR. CHAIRMAN: So what about December 1st? If we didn’t have it on the 1st then we would be going into January.
MR. PORTER: If the House is sitting, we’ll make it January.
MR. MACLEOD: If the House is sitting, we could still do the 8th. I don’t understand this problem with people who can’t get up in the morning. (Interruptions)
MR. CHAIRMAN: So we’re talking about into January, if the House is still sitting? Okay.
The meeting is adjourned.
[The meeting adjourned at 11:05 a.m.]