Printed and Published by Nova Scotia Hansard Reporting Services
ECONOMIC DEVELOPMENT COMMITTEE
Mr. Michel Samson (Chairman)
Mr. Brooke Taylor
Mr. William Dooks
Mr. Mark Parent
Mr. Howard Epstein
Mr. Charles Parker
Ms. Marilyn More
Mr. Wayne Gaudet
Mr. Harold Theriault
[Mr. Charles Parker was replaced by Mr. David Wilson (Sackville-Cobequid).]
Mrs. Darlene Henry
Legislative Committee Clerk
Mr. Peter Doig
Director, Government Relations
Nova Scotia Power Inc.
Ms. Margaret Murphy
Manager, Public Affairs
Nova Scotia Power Inc.
Nova Scotia Power Inc.
Ms. Nancy Tower
General Manager, Customer Operations
Mr. Alan Richardson
General Manger, Marketing and Sales
HALIFAX, THURSDAY, FEBRUARY 10, 2005
STANDING COMMITTEE ON ECONOMIC DEVELOPMENT
Mr. Michel Samson
MR. CHAIRMAN: Good afternoon, honourable members. I would like to call this meeting of the Economic Development Committee to order. My name is Michel Samson. I'm the MLA for Richmond and the chairman of this committee. I want to take this opportunity to welcome representatives from Nova Scotia Power Inc. today to meet with the committee and to discuss issues surrounding the operations of Nova Scotia Power, issues such as the power outage that took place before Christmas and also I'm sure, as an Economic Development Committee, there will be questions about the economic impact that Nova Scotia Power has on our province and the role it plays.
I apologize for the problems that we did encounter with actually getting you before this committee. Unfortunately, the weather played havoc with us on a few occasions, and on other occasions due to personal circumstances we had decided to delay once again and I appreciate the company coming in. Thursday is not our usual meeting date but we have done our best, as a committee, to accommodate your appearance here today.
In light of the amount of questions that members will have, we have broken away from our usual format of just allowing members to ask questions and we have broken it down into a schedule format. I have allowed for up to 15 minutes for representatives of Nova Scotia Power to make a presentation and then it will go 20 minutes for each caucus and then a 10-minute round for each caucus with an opportunity for 10-minute closing comments from representatives of Nova Scotia Power. In light of the vast amount of questions I know that members have, I would ask that members try to be succinct and short in their questions and that in answers, as well, try to be as brief as possible so that we can get as many questions asked and answered today. I would ask that both members and witnesses respect that.
So with that I would ask if the representatives of Nova Scotia Power would introduce themselves. Ms. Tower, if you want to begin, and then I would welcome you to make your opening remarks.
MS. NANCY TOWER: Thank you very much, Mr. Chairman. My name is Nancy Tower. I'm General Manager of Customer Operations. I am responsible for the transmission and distribution system in the province as well as the call centre. In any significant storm event, I also have a responsibility for the overall storm restoration effort.
Alan Richardson is with me today and he is the General Manager of Marketing and Sales. Should I continue on?
MR. CHAIRMAN: Yes, please.
MS. TOWER: As you know, since the committee originally extended its invitation for us to appear, the URB ordered a review and response to a request from the Premier. The board has also retained a number of consultants who are examining our system, our practices and our storm response. As part of the review, we filed a report on the storm on January 18, 2005, and in that report we have tried to provide a factual foundation for all parties interested in the November outages. So out of respect for that review process and the work of the consultants, we have avoided, in that report, drawing conclusions but we can certainly tell you that we are very proud of our system and very proud of our practices and we look very much forward to the results of the public review process. With this context in mind, we will do our best to answer questions from the committee today, though clearly there are some issues that will need to await the outcome of the work being done by the consultants.
For the next few minutes I would like to touch on three points. First I want to talk about the nature of the November storm; second, I would like to talk about our response to the storm, including our call centre response; and third, I want to say a few words about the integrity of the infrastructure.
Let me start with the storm. On November 13th and 14th, many Nova Scotians could look out their window and see no evidence of a storm and yet many Nova Scotians were without electricity. It was certainly natural to wonder about that. Still others would have had frustrating encounters with our telephone technology during that November storm. In your roles, you have heard from many people and certainly so have we so we are pleased to have the opportunity to talk to you today.
Dave Llewellyn is one of our linemen on the South Shore and I visited him just before Christmas. He certainly has the answer to whether this was a real storm. He told me that in his 30 years as a lineman, he has never seen a wind, snow and ice storm as bad as the one on November 13th and 14th. Larry Arthur, a supervisor of line crews as well as a long-serving Nova Scotia Power employee, was in the Burnside Industrial Park at 3:00 a.m. on
November 14th, just before those towers collapsed. He saw a six-inch diameter accumulation of snow and ice on those transmission wires, also on the towers themselves. The wires were sagging by what he estimates to be eight or nine feet.
Environment Canada named the November storm to its top 10 list for 2004 weather events. Here's what Environment Canada said, "The heavy snow was especially wet and sticky, with probably twice the adhesion of the snow from White Juan." That's an important point for us. Not all snow adheres to our lines. It takes special circumstances. Environment Canada explained the November storm this way, "Adding in rain, light freezing drizzle and ice pellets, along with close air and dew-point temperatures, created weighty snow accretion on wires and towers of 10 to 15 cm thickness. But that's not all," continued Environment Canada, "Push those thick sheaths of snow with strong gusty winds at 75 km/h and you get an enormous stress load on trees, power lines and transmission towers."
Some of our crews took pictures which provide a representation of the heavy ice and snow that affected our system in November. Some of these pictures are in your packages that we have distributed. We estimate that the ice loading reached up to six pounds per linear foot. So in locations where the snow loading accumulated on what we would call a transmission span, so if you picture two transmission structures, between those structures typically there would be three wires and two overhead ground wires to protect the electrical wires from lightning, so those five wires over an average span length, the weighting would be equivalent to hanging about 10 cars between each structure.
I have with me today, which I will show you, a model that our engineers have built which represents the snow and ice accumulation that many of our people would have seen during that ice storm. I will just take a minute to pass it around. It demonstrates the weight. That is an actual transmission wire and the weight is, if you pick it up with one hand, you will get a sense (Interruption) Yes, exactly. It is actually built to scale in terms of the weight. So that is what our transmission lines would have experienced with that snow. If you want to pass it around, you have to pick it up with one hand to get the full effect.
In the November storm, seven steel transmission towers crumpled and 19 wooden structures collapsed. An additional four steel structures and 12 wooden structures were damaged. For context, you should know that we maintain a system of approximately 40,000 transmission structures and 550,000 distribution poles. So, as I said, 26 towers collapsed out of a total transmission system of 40,000 structures.
The reality is that that November storm was severe. It caused more physical damage to the transmission system than Hurricane Juan did. By contrast, the major storms that struck us both on January 16th and 17th and again on January 23rd and 24th, had very high winds, had a lot of snow, and it resulted in no damage to our infrastructure and no significant power interruptions. So, as I said earlier, when Environment Canada talks about special conditions
and the snow accretion, it was, in our estimation, a very different weather event than normal, a very unusual weather event.
So how did we respond to this peculiar November storm? A response followed our Emergency Services Restoration Plan that had been updated and refined since Hurricane Juan, including improvements recommended by John Sherrod, the consultant hired by the URB to review our response to Juan. That's been a very beneficial process to us. So based on our plan, these are our priorities, this is how we restore power: first of all, emergency and public safety situations; secondly, our critical infrastructure, those parts of the system needed to get electricity from the power plants to the other areas of the province. We have a bulk transmission system and we have a lot of our generation, as you would know, on Cape Breton Island, and we need to ensure, first of all, that the generation is up and that the transmission lines are able to carry that power to the load centre, which is across the province, here in HRM and then to the west.
Then the critical infrastructure, as identified by the Emergency Measures Organization. In this latter category are hospitals, telecommunications infrastructure, sewage treatment plants, emergency responders, et cetera. Thereafter the efforts focused on power restoration to the maximum number of customers in the shortest possible time. The next priority is individual customers, some of whom may have been particularly isolated or may have a problem specific to their house. That priority list and that approach to restoration is consistent with industry practice.
As you may remember, the storm started Saturday evening. We began to monitor this weather event on the Friday. As circumstances worsened, we marshaled resources and worked on plans to move equipment, people and fuel to places they would be needed. We also developed our plans to feed and house those who would be away from home. As a result of this planning, we had more workers on the ground sooner than we had for Hurricane Juan.
The November storm was a challenge, not only did it deliver exceptionally heavy snow and ice, but it didn't move through the area as we had anticipated or as Environment Canada had anticipated it would. Instead, it stalled over us. As a result, we were unable to get helicopters in the air to analyze the damage as quickly as we would have liked. Accurately assessing the damage is essential to providing customers with timely information on restoration times. Without a good view of the overall damage, it's difficult to assess the time needed for crews to restore power, a very important point for us.
A second challenge for us was that the telephone technology did not perform the way it should have. We understand that when this happens, elected representatives like yourselves hear about it and it makes your jobs more difficult. I'd like to take a minute to describe how our telephone system works. When a customer phones our outage line, the telephone system recognizes the neighbourhood or community from where the call is being made. Our outage line is 428-6004, call in and it recognizes your geography. Depending on the community or
neighbourhood, and assuming there's an outage in that area, the caller will receive a message that says, we know there's an outage in your area - it will describe the geography that you're calling from - a crew has been dispatched, and that we expect the power will be restored by a specific time, and we will give a specific time.
For most callers in an outage situation that totally automated message that is delivered in 30 seconds is sufficient. With this technology we can take 15,000 calls a minute, a 30-second message delivered 15,000 times a minute. When that system works well, it works very well. For callers who want or need more information, they have the option to stay on the line after that 30-second message. At this point, they enter a more narrow portal, a system with a capacity for 100 simultaneous calls. Once in this system, customers can, for example, talk to a representative to report an emergency or some other matter, or use our automated system to report an outage. So if they don't hear their geography spoken at the front end, they will want to get through and report an outage.
The approach that we have adopted with this system is common in our industry, but it's certainly not universal. Some utilities have a call centre, but they don't have any automated system to simultaneously deliver outage information and restoration times to high volumes of callers. So when they experience the sorts of volumes that we would in an outage situation, most if not all would receive a busy signal. Our choice has been to put a high-volume call answer, as we call this technology, on the front end to be able to deliver the 30-second message and get customers the information that they need.
In the case of the November storm, though, our system failed to perform the way it should have, and it did so in two key respects. First, in order to protect the overall integrity of the phone system in Nova Scotia, Aliant had capped the number of calls that could be received by us. That means that thousands of customers who otherwise would have heard our call centre message did not hear it. So we had the capacity within our system, but Aliant had capped it, so calls could not get through to hear the message.
Secondly, for several hours on Sunday there were problems with the software in our telephone messaging system. Many callers received information that, in fact, was intended for customers living elsewhere. There was something wrong with the software that caused the geography not to be right, and delivered messages to customers for the wrong geography.
The second problem, that one that I just spoke about, was fixed by 3:00 p.m. on that Sunday. The first problem, that being the cap on the number of calls that could get in, has now been corrected. We know that we disappointed many customers, and we are not happy about that. We continue to work with Aliant on the technology issues and, beyond that, we continue to build our capacity to provide more specific restoration information to more customers more quickly.
Before concluding, I want to say something about the overall integrity of the electrical system infrastructure. Nova Scotia Power is part of something called the North American Electric Reliability Council and, within that organization, a member of the Northeast Power Coordinating Council or NPCC. NPCC is made up of virtually all utilities in northeastern North America, Ontario Hydro, Quebec Hydro, utilities in New York and up through the New England States. Because we are interconnected to utilities throughout the NPCC region and therefore throughout North America, we must design and build and operate our system according to something that is called NPCC Basic Criteria for Design and Operation of Interconnected Power Systems.
In addition, our transmission and distribution assets are designed and built to meet or exceed the requirements of the Canadian Standards Association, specifically something that is called CSA 22.3 No. 1 Overhead Systems. We also follow a third set of design criteria that would be consistent across our industry and would be what is considered good utility practice. Finally, at Nova Scotia Power we maintain our system based on an inspection program that our industry would understand as being best in class. There is no advantage, financial or otherwise, for us to defer necessary repairs.
In response to the November storm, we engaged world-renowned consultants in transmission line construction and failure analysis. Their preliminary conclusions suggest that the downed structures met CSA design criteria, and that they were brought down when the snow and ice loads exceeded that design criteria. It is worth noting that the system performed very well during recent storm events, including the most recent storm that resulted in schools being closed for two days, transit service being suspended, and major highways being closed.
The November storm pointed out the need for us to improve communications with our customers, and that work is already well advanced. Some might ask why these changes
were not made prior to the November storm. In fairness, it's essential to realize that our telephone infrastructure had never before experienced such an extraordinary volume of calls. We had 300,000 calls on Sunday alone, 40,000 calls in one hour on Sunday, that was more than we experienced ever, including Hurricane Juan.
That issue aside, in November, we believe we safely restored power to our customers as quickly as possible, under very trying conditions. As our report to the URB demonstrates, this requires extensive preparation, planning and logistics. The same team of people at Nova Scotia Power who produced this fine result, carefully and thoughtfully maintains NSPI's electrical infrastructure every day.
I want to take this opportunity to publicly thank the employees of our company who work so hard and do their best for customers under very difficult circumstances, whether they're on the front line of customer relations in the call centre or climbing poles in Winter conditions to restore electricity, which is so important to our customers. I thank you for
inviting us here today, we appreciate the opportunity to give these remarks, and Alan and I look forward to answering your questions.
MR. CHAIRMAN: Thank you, Ms. Tower. I will now recognize Mr. Brooke Taylor.
MR. BROOKE TAYLOR: First I want to thank the committee and you, Mr. Chairman, for unanimously agreeing to bring the Nova Scotia Power guests into the hearing today.
The storm in November would be my primary concern. The storm was dismal and I have to say frankly that the communication from Nova Scotia Power was dismal, as well. Ms. Tower, while I do respect your presentation, to a degree it seems like you're trying to shift the responsibility for the communication to Aliant and if that is the case, if Aliant capped the number of calls that could be received relative to the storm and the concern that many people had, including customers with critical concerns, what tangible steps - other than communicating with Aliant - have been taken to improve the system?
MS. TOWER: We have been working with Aliant very closely since the November storm. I would say we've been in contact with them on a daily basis, if not certainly on a weekly basis. Specifically to the cap, Aliant has lifted that cap so the capacity - the 15,000 calls per minute to which I referred - we will now be able to receive that volume of calls in another storm event.
MR. TAYLOR: I guess I'm a bit perplexed about this cap. Was the cap enacted by Aliant or was it mutually agreed upon by both parties that it seemed to be reasonable? If that was the case, was the storm regarded as Hurricane Juan factored into that cap?
MS. TOWER: Aliant has provided a letter in our report to the URB and the letter would state that they had conservatively estimated the number of calls that we would be getting in any storm event. So they had put that cap on as a result of estimations they had made in terms of the volume of calls that we would have experienced. The volume of calls, as I pointed out, did exceed the volumes of calls that we experienced during Hurricane Juan, 125,000 in a day was the volume during Hurricane Juan - that was our largest volume - 300,000 was the volume during this storm.
MR. TAYLOR: There were an awful lot of disappointed Nova Scotians, including yours truly, with the response from Nova Scotia Power. I appreciate there has been some effort made to mitigate a future situation like that.
I have some information here and have been told that since 1992, Nova Scotia Power dropped from 350 linemen to 178 in 2004. Is that correct?
MS. TOWER: We've had a number of interrogatories through the regulatory process on the storm hearing around the number of linemen. I would prefer to let that process deal with that question and we will be providing the answer in that way. What I will tell you though, in terms of numbers of linemen - no utility staffs the day-to-day linemen for storm response and we rely on mutual assistance agreements and contractor linemen to respond to storms.
MR. TAYLOR: I am a bit disappointed in that response. To my way of doing math that is 172 positions that have been eliminated. I know we have several substations around the province that have been closed over the past decade. I guess I question from a practical point of view whether or not reducing the number of linemen and closing substations would, in fact, enhance or perhaps decrease service. I think there is a problem there and again, I appreciate that perhaps those answers will be coming out. I think you would have to take a pretty big leap of faith to think that less means more. Mr. Chairman, I'll pass to my colleague, the member for Kings North.
MR. CHAIRMAN: Mr. Parent.
MR. MARK PARENT: I'm going to follow up on the issue of the number of linemen because I don't think it's satisfactory that you refuse to answer us at this stage. My questions are going to be around, not only the response to the storm, but wider issues as well. The reason why is because I think the two are tied in together. I just want to start with three sample letters - from many - that came to me, just to give you the feeling of what I'm getting and why, in my capacity as the MLA for Kings North, I'm going to be asking some hard questions.
Here is one from a businessman in the area who was writing after the power outage. "I was President of a power company in Switzerland and I know the rules, regulations and the order of a power company. What I can see here with NS Power is a mix between shareholder thinking, a miserable strategy . . . bad service/maintenance from the service department, a bad attitude for customer service. It is more important . . ." this businessman concludes ". . . for NS Power to sell power to Maine than to make sure that the supply and service is perfect in the Province."
Another letter from a rural constituent of mine. "Over the past several months, the power outages at my home have become a fact of life, not just a nuisance. The number of outages and the duration of the power losses are getting out of hand. The last two outages, October 11 and 12, 2004 (20 hours) and November 14 through 16, 2004, have made it evident that Nova Scotia Power is either lacking in ability or just does not care about the service it is providing to its customers. One has to wonder if this is because it is a monopoly and knows that most people have no choice but to use their service. Although I know you live in a rural area as well, and are aware of this fact, . . ." she's writing to me, as MLA ". . . I wish to stress that when a rural home does not have power, in all likelihood, they also do
not have any running water. Most rural residences also have large livestock, for either commercial purposes, or recreational. In either case, large animals require great volumes of water . . . I think this fact is often forgotten, or simply not given any thought, by Nova Scotia Power executives."
Here's one from a businessman in Kentville, "Mark, I want to know what the provincial government is going to do about the latest power outage debacle??? It is a travesty that a medium winter storm can knock out an essential service for such a long period of time. Our power is becoming . . ." this person writes, perhaps unfairly ". . . as unreliable as the (third world) Caribbean countries that we visit in the winter. I had mistakenly thought that our infrastructure was far more advanced than this."
So this is just a tone of some of what I was receiving in response to the latest outage. I think it ties in with larger, perhaps more substantive questions that people have in my riding about maintenance and about the quality of the transmission grid.
So getting back to the question that my colleague asked about the number of linemen, because I've been asked this time and time again, and you may not have the facts here that you can give us right now, but I think as a committee we deserve to have the facts on the amount of line personnel that are with the service now and the amount when they were privatized. Specifically, I'd like those broken down for Kings County, if possible. You're not willing to give it to us now?
MS. TOWER: I don't have those numbers with me today and as I said before, out of respect for the process that is underway and formal interrogatories that have been asked of us around numbers of linemen - and we will be answering those in a formal way through the URB process - I would prefer not to answer that today and let the URB process - out of respect for that process - to answer it in that forum. So we will absolutely be providing those numbers and I'd be happy to . . .
MR. PARENT: Excuse me for interrupting, why does that preclude you from answering here? Could you outline that to me a little more fully because I don't understand, and that is what I'm being asked time and time again. People say, Mark, we used to have nine working out of Kentville, we're down now to two. I would like to know, is that true?
MS. TOWER: Our preference, again, would be to respect the process and be able to provide full explanation around numbers of linemen.
MR. PARENT: How about respecting this process, Ms. Tower, and responding to us in terms of at least the overall amount of linemen? I know you can't give me the facts on Kings County now but certainly you can give us an overall number. Is my colleague correct in the amounts he was talking about or is he off base?
MS. TOWER: Again, the number of linemen that are employed by Nova Scotia Power are only part of the linemen that would be employed in the province. So we would rely on contractor linemen, we would be relying on contractor tree crews which some linemen would have done, work that linemen would have done in the past. So it's a much fuller picture than, simply, numbers of linemen. Again, during storm response time we would be, as other utilities do, calling on other utilities through mutual assistance agreements.
MR. PARENT: Well, I guess it's a bit frustrating that we're not getting the answers but perhaps you could get those answers to me in the future, in terms of linemen stationed full-time out of Kings County?
MS. TOWER: We'd be happy to provide that to you with the interrogatory process. I would say that during the last review the URB did of our response to Hurricane Juan, they specifically asked Mr. Sherrod, who was doing the consulting at the time, about numbers of linemen. His response was similar to mine in the sense that the numbers of linemen that are employed day to day, storm response is not dependent on the numbers of linemen that are employed day to day. That is really a function of the investment that we make and the numbers of customers that we need connected and so on.
MR. PARENT: Yes, but it runs to a maintenance question, the amount of linemen. I will turn it back to my colleague.
MR. TAYLOR: Communication and response time are two components of the power outage that most customers have some issues with. I have to ask, would it have improved outage response times if there had been a subdivision into smaller sub-regional areas during the November storm?
MS. TOWER: I'm not sure I understand your question.
MR. TAYLOR: Okay, I will be specific. In fact, I should point out, Mr. Chairman, that just this week, the power in the Musquodoboit Valley was out, Monday, a very nice, fine, sunny day. To my knowledge and to my constituents' knowledge, there didn't seem to be sufficient communication, if any, regarding that outage. We have, from a layperson's point of view, a very modern substation in Upper Musquodoboit that has been closed. It closed within the last decade. I will use that as a specific example.
My question is framed around that. Would it have helped response times if we had a substation or substations in smaller communities such as we used to have, and more linemen to, in fact, perform the services out of those substations in our communities?
MS. TOWER: I would just like to clarify one point, that substation, for us, is a technical feed to our distribution plants, so we have not closed substations. We did close a district office in Musquodoboit. I just want to make sure that people are clear on that.
MR. TAYLOR: Well, if I can, just with that, Mr. Chairman, what you refer to as a district office has a compound, it has trucks, it has people power there that worked out of the community. Like, again, from a layperson's point of view, practically speaking, it certainly was an advantage, in my opinion.
MS. TOWER: Again, in terms of storm response, we would - in this particular storm, on the November 13th and 14th storm, we had crews on alert as early as Saturday and then called them in on Sunday. So we had lots of crews in here. In fact, as I said earlier, we had more crews on the ground earlier than we did during Hurricane Juan.
So from a storm response point of view, what we do is we look at where the weather is expected to hit and get crews deployed in areas where we are expecting the weather to hit. So it's not necessarily dependent on having a district office, it's more dependent on us ensuring that we understand where the weather is coming and ensuring crews are in that area, close by.
MR. TAYLOR: Yes. Mr. Chairman, as you know, in your communities, everybody knows the linemen and the people that do work for Nova Scotia Power - and I wouldn't want anybody to come away from this hearing thinking that our Nova Scotia Power linemen, although their numbers have been greatly decreased, approximately 172 in the last 10 years, they do a tremendous job and so do their families. I know that the spouses of the people working for Nova Scotia Power field a lot of calls in their homes and in their communities, and they try to do the best they can. I think that we need the same type of response from people in the positions that really should be making those replies.
I would like to, if I could, refer to the Nova Scotia Utility and Review Board report that was filed January 18th. Could you please explain why it states that each transmission line - it would be in Appendix 10 at the back of the document - is patrolled at least once per year when this is not supported by the information provided in Appendix 10. It would appear that over 50 per cent of the lines that failed in November were not inspected in the 12 months preceding the storm. The Appendix shows the inspections of the storm lines that were affected by the storm, out of 10 lines shown in Appendix 10, only five were performed in the year prior to the storm, only five inspections. The other dates of inspections were September 3rd, two on July 3rd, one on May 3rd and one on April 3rd. It does state that they are patrolled at least once per year but that is not supported by the Appendix.
MS. TOWER: If there is nothing found in the patrol, then there is no inspection report. We report on an exception basis. So these would have been the patrols that happened
in the 12 months prior where we actually found something. We do absolutely patrol our transmission lines every 12 months but if nothing is found, nothing is reported.
MR. TAYLOR: Well, it doesn't seem to make that clear in the Appendix. Again, Mr. Chairman, I will have to give our witness the benefit of the doubt on that reply and I will turn it over to my colleague.
MR. PARENT: In the latest storm, the lines that sustained the most transient and sustained damage, according to the report you put out, were 69 kV and 138 kV lines. The Valley is served by these lines. I am wondering, my question is, are those lines robust enough for the Valley area? That is where the greatest damage was done. Now, it may be that the storm was centred over the Valley, but if it was centred over the Valley, I would have a follow-up question to that because in B.C., I understand, they have load designs for areas that experience heavy snowfall, that take larger load designs. Are the Valley lines robust enough to handle the problems? According to your own report, those are the lines that were down.
MS. TOWER: I would say, yes, the Valley lines are robust enough, again, built to CSA standards and maintained according to our inspection programs. I would say it's more dependent on weather and where weather hit us than it was on anything else. Where we experienced severe weather, we had damage on transmission lines.
MR. PARENT: Now, the Valley is susceptible to high snowfall ratings, so are your lines engineered to a higher load design to accommodate that and compensate for that, or not?
MS. TOWER: Again, I would say that it's - we've had severe snowfall in two subsequent storms and it depends on the type - it is really not so much about snowfall and more about adhesion to the lines, themselves. Our lines are built to CSA standards and that has a specific design criteria around the radial ice and snow buildup on it. So the lines to the Valley would be built to that standard.
I would say, as well, that that CSA standard is dependent on weather conditions in certain areas. So we would not have the same standard as, say, B.C., we would have a standard that would reflect the types of weather conditions we would experience in Nova Scotia.
MR. PARENT: In light of the weather conditions which you have been experiencing in Nova Scotia, do you have any intention to strengthen those lines to the Valley?
MS. TOWER: Certainly, one of the things we are looking at is whether or not this is - and the consultants, also, have been in - and, you know, is weather changing? Is this an anomaly or is weather changing? We are always looking at our design criteria as we design and build. I would say that it is certainly something we would look at.
MR. PARENT: Are the larger lines, the 230 kV lines and the 345 kV lines that serve the rest of the province by and large, are they stronger lines, more robust?
MS. TOWER: I would say that they're all built to CSA design criteria, and in certain instances, so for example . . .
MR. PARENT: Sorry to interrupt, but we have so little time for each caucus. I'll make it very simple, if we had a 230 kV line going to the Valley, would it have sustained the same damage the 138 kV and 69 kV sustained?
MS. TOWER: I can't answer that specifically, and I'm not an engineer, but I would tell you that our 345 kV line, the skywire on 345 kV line and the one over in Burnside, for example, sustained damage. It did not discriminate on size of line. The storm did not discriminate on size of line.
MR. PARENT: Or strength of tower?
MS. TOWER: Or strength of tower.
MR. RICHARDSON: Maybe I could just add something to that, if I could. Just on the question of whether a 230 kV line would make a difference from a 69 kV line, that's the voltage that the line is operating at. The choice of voltage is really related to the load more than the withstanding of the weather. The reason is that 345 is the backbone, designed to carry the bulk of the power, 230 is the next level down which is designed to carry a lot of power. By going to higher voltages, you lower the current, and it's more a load-related system . . .
MR. PARENT: Do you have the strengths of towers and lines . . .
MR. CHAIRMAN: Mr. Parent, I'll have to cut you off at that point. You have another 10-minute round coming. For the NDP caucus, next, we'll have Mr. Epstein.
MR. HOWARD EPSTEIN: Mr. Chairman, the Environment Canada report that you are citing, which says that this is one of the 10 most outstanding weather events from last year, goes on to say that the November storm hit hardest in the Annapolis Valley, the Halifax region and northeastern Nova Scotia between Truro and the Canso Causeway. Residents in the country were left in the dark without running water and telephone service for the better part of a week. This, indeed, has been the rationale for us wanting to talk with you, as you can well understand. There are economic implications, as well as disruptive implications for the day-to-day lives of people in this kind of storm that results in an outage of electricity. We've all built our lives around having electricity available to us, virtually on a non-stop basis, and that includes, of course, the economic life of the province.
When the outages occurred over the last year and a half, the various different outages that we've experienced, a number of people have come forward and suggested that they were mad enough and put out enough, and it was particularly the second and third times that this occurred, that they were thinking of suing Nova Scotia Power over this. On the other hand, it turns out that there are protections for Nova Scotia Power in the legislation that is set up in order to make it very difficult for people to sue as a result of loss of power.
If we were considering changing that, if we were considering making changes to the rule, to the context for Nova Scotia Power's interaction with its customers, be they business or private homes, are there any comments you would want to make to us about things we ought to consider?
MS. TOWER: Certainly, from a claims point of view, we would have a process that exists today where if we have been at fault or our equipment has been at fault, then customers can make claims to us for compensation.
MR. EPSTEIN: And has that happened?
MS. TOWER: Certainly. Absolutely.
MR. EPSTEIN: And you pay out?
MS. TOWER: And we absolutely pay out.
MR. EPSTEIN: Do you have stated criteria that you apply?
MS. TOWER: We do, our insurance people deal with it. But I should be clear, in terms of damage that is caused by weather events, severe weather events like November 13th and 14th, we would not pay out on claims such as those for economic loss.
MR. EPSTEIN: Yes, I guess the question would be, what are the triggering criteria that you find acceptable or that you've insured for?
MS. TOWER: I can only say generally, I'm not the expert, certainly, on that, but I would say generally that when we have been at fault, when our equipment has been at fault, then we would pay out on a claim.
MR. EPSTEIN: If you have a stated policy, could you provide the committee at some point subsequent to this with a copy of the stated policy that you use for processing these claims?
MS. TOWER: Sure.
MR. EPSTEIN: Okay. That would be a big help. Now, if a system were to be put in place, would you prefer a system of commercial arbitration or court, to determine liability and amounts? Do you have a preference?
MS. TOWER: I think, Mr. Epstein, that's perhaps beyond my expertise.
MR. EPSTEIN: I would invite you to think about - although you deal with customer relations, is that right?
MS. TOWER: I do.
MR. EPSTEIN: Does that include payouts when people come and make claims?
MS. TOWER: Our insurance people deal with it, so people in our risk group deal with claims. We certainly deal with them on the front end and try to solve them to the extent we can.
MR. EPSTEIN: As Director of Customer Relations, do you have any comments on whether there should be limits on amounts or limits on the type of action that should be allowed?
MS. TOWER: I would say we aim each and every time to be fair to our customers when they're making claims to us for damage that has happened.
MR. EPSTEIN: Right now your policy, and the insurance that you carry, applies only in circumstances in which Nova Scotia Power is negligent?
MS. TOWER: Yes, generally speaking that would be true.
MR. EPSTEIN: You deal with these through a negotiation process?
MS. TOWER: Yes. Someone files a claim, and it's evaluated and determined the correct amount to pay out.
MR. EPSTEIN: Have you had to go to court on any of these cases at all?
MR. ALAN RICHARDSON: The way our process works is if a customer was not satisfied with the decision that we took, they have the ability to go to something called a dispute resolution officer, who would be an independent judge of the situation and could make a recommendation to the URB to overrule our decision, if that was appropriate. That's the process.
MR. EPSTEIN: You deal with it on an arbitration basis at the moment?
MR. RICHARDSON: We deal with it through something called a dispute resolution officer.
MR. EPSTEIN: That's what I think that would amount to. Thanks, that's helpful. I'd like to move to another aspect of this matter, although I would remind you that it would be useful if you could send us the criteria that you use and any guidelines that you might have, that would be helpful.
One of the major events in Canada that brought to everyone's attention the impact of weather was, of course, what we often refer to as the Quebec Ice Storm of 1998, but of course it wasn't just Quebec that it hit, it was all of the northeast United States and here and so on. The question I have, really, is, what impact, if any, did that have on policies and procedures that either NSPI has absorbed or changed since that time, or whether it's had any impact on the association that you belong to, the Northeast Power Coordinating Council, the NPCC? What changes, if any, did they make after that?
MS. TOWER: I would say that the CSA design criteria to which we build our system did not change as a result of the Quebec Ice Storm and the events that happened in Quebec during that ice storm.
MR. EPSTEIN: Was a process gone through by the CSA following the Quebec Ice Storm to determine whether their standards were appropriate?
MS. TOWER: I believe so. I know that we've certainly asked the question, and the answer is that the design criteria did not change as a result of those events.
MR. EPSTEIN: Does that seem reasonable to you? Does it seem reasonable that given that we saw the vulnerability of the system that there not be any change?
MS. TOWER: I can't speak for CSA, but I would say that . . .
MR. EPSTEIN: But you choose to live by the CSA standards.
MS. TOWER: Yes, absolutely. But I would say that to build a system that can withstand - I think of Hurricane Juan from our point of view - a weather event that is unusual in nature becomes a balance between reliability and cost and rates for customers and so on. That is always a consideration.
MR. EPSTEIN: But surely behind this is an assumption that there's an adequacy in the standards that are already in place. In your own words the question is, is the weather changing? That's what you said. That's the question that NSPI has to ask itself, it's what the
customers are asking ourselves, what we're asking ourselves, and surely most of us are coming to the conclusion that there's very good reason to think that weather patterns are changing.
MS. TOWER: We are participating currently with Hydro-Qúebec and the Canadian Electricity Association in a committee that I think is called something like "Ice and Wind Loading Committee". So we are looking at ice and wind loading, and changing weather conditions and the impact of those sorts of things on our transmission and distribution assets.
MR. EPSTEIN: So that means that you're considering the possibility of changing your design standards?
MS. TOWER: We are always looking at those things, absolutely.
MR. EPSTEIN: I gather from what you just described that you're doing it in a two-party discussion with Hydro-Qúebec, or are there others?
MS. TOWER: Hydro-Qúebec is involved with it, but it's a committee of the Canadian Electricity Association, which would be utilities across Canada.
MR. EPSTEIN: Does that involve the CSA as well?
MS. TOWER: Presumably, yes, they're linked. So if there was a recommendation that came out of that committee, they would put it forward to the CSA to have the design criteria changed. I suspect that's how it would work.
MR. EPSTEIN: My point is that the industry on its own can undertake its own research and generate standards that it considers appropriate, independent of the CSA and suggest that . . .
MS. TOWER: Yes, absolutely.
MR. EPSTEIN: Okay, all right, so that's not beyond the possibility. Just to be clear, the Northeast Power Coordinating Council, this is a voluntary association that you belong to, it's essentially an industry association, is that right?
MS. TOWER: I wouldn't say it's voluntary. As a result of being interconnected, we need to belong to the NPCC and the North American Electric Reliability Council.
MR. EPSTEIN: So you do this . . .
MS. TOWER: So Newfoundland would not have to be, for example, because they are not interconnected.
MR. EPSTEIN: Yes, I'm sorry. The question, just to refine it is, do you belong to it as the result of operation of any laws or simply, as a matter of your own policy, or as a result of contract?
MR. RICHARDSON: Well, I think it's . . .
MR. EPSTEIN: Does FERC require you to belong to it?
MS. TOWER: No. FERC has no jurisdiction over us because we are interconnected, is my understanding.
MR. RICHARDSON: Yes, it would be very unwise not to be interconnected as an electric utility. We get tremendous benefits by being interconnected with our other provinces. Part of that is . . .
MR. EPSTEIN: Well, I understand it's a good idea and that it makes sense, and that it's an opportunity to talk with your colleagues and your . . .
MS. TOWER: No, it's much more than that.
MR. RICHARDSON: It's a very rigorous set of standards that must be followed. Not to do so would be quite irresponsible.
MR. EPSTEIN: Okay. Maybe you can direct the question to someone else in the organization and write to the committee afterwards because the question really was, whether you're required by any form of law, whether it's the Utility and Review Board here, or whether it's FERC in the United States, or whether it's as a result of rulings by any other utility boards in other provinces that make that mandatory. That's the essence, really, of what it is that we would like to know.
So what, I wonder, is exactly the same kinds of points that have been raised with you already, which is about the overall reliability of the system and the question of whether we really are operating at a level that is appropriate. Of course, everyone is concerned to prevent rather than to repair. I certainly join with you in your observation of praise for those who got out and worked so hard in order to repair the system afterwards. Yet, what we need is a system that is reliable, virtually 100 per cent reliable, is, of course, the kind of standard that most people look at. Everyone understands that every once in a while there will be something that will go wrong but we strive towards that.
So far, what I think we have heard is that there might be a change in the communications strategy coming out of Nova Scotia Power, including how often it is that people can use the phone lines in order to call in. But we don't hear, I think, yet, whether there is anything substantive about changes to how the system is designed, run or
administered. I think it's that that we are really concerned about much more so than the communications issue. I, for one, share the concern about the crews that are available.
When you suggested to us that the bare numbers, province-wide, don't tell the story, part of your answer was to say, well, one of the things we rely on is crews from other places. Yet, winter storms don't just get confined geographically to Nova Scotia or purely to New Brunswick. It's entirely possible, and it happens frequently, that these storms hit the whole of the northeast at the same time. They hit Maine, they hit New Brunswick and they hit Nova Scotia all at the same time. So if you're relying on crews from New Brunswick and Maine, and Maine is relying on crews from Nova Scotia and New Brunswick, it isn't going to work. So the question is, have you run into any of these situations when you haven't been able to bring in crews from other provinces or not as many as you would need because storms have hit two or more provinces at once?
MS. TOWER: We have not run into that situation. Certainly, you know, if you look at Florida as an example, over the last number of months, they would have brought crews in from far away. It is not only other utility crews that we do rely on. Over the last number of years, as a result of the way utilities like us run our business, there have been more contractor crews, independent contractors that have linemen employed and we would rely on those contractor crews, both line crews and tree crews, both here in Nova Scotia as well as in New Brunswick. There is a fairly big group of people, including utilities, that we rely on.
MR. EPSTEIN: Can you tell us about the private line crews? I'm not talking about the private tree crews. I can well understand what they might be doing the rest of the time. What are the private line crews doing the rest of the time?
MS. TOWER: We would use them during peak times so in the Summer, when we would have our peak around customer installations and line builds and so on, then we would be using some of these contract line crews as well, and utilities would use them in the same way. Our affiliate Cablecom, for example, would be doing a lot of work for N.B. Power and Aliant in New Brunswick, for example.
MR. EPSTEIN: These are crews that would otherwise be working doing installation?
MS. TOWER: They may be doing line construction in new subdivisions, they may be changing out of poles if the Department of Transportation requires us to shift a road, for example, and widen the right-of-way, we may have to put poles in a different location so it's a variety of things.
MR. EPSTEIN: These crews are trained in repair to the standards that you would require for your own in-house people?
MS. TOWER: They would employ journeymen/linemen, the same as we would.
MR. EPSTEIN: Could you tell us the nature of your arrangements with them or their companies? Are these arrangements with individuals or with companies that would normally have them in their employ?
MS. TOWER: Tucker, for example, would be a local Nova Scotian company that would have an expertise in transmission line builds, they would have journeymen/linemen in their crews and we would use them as we needed them to do work for us from time to time.
MR. EPSTEIN: So you're contracting with another company?
MS. TOWER: We are contracting with them, yes.
MR. EPSTEIN: But Tucker, or any other company, could have work in New Brunswick, they could have work in P.E.I., they could be somewhere else, their people could be off on vacation, they could be gone, they could go out of business. There's no connection that kind of underlies that that makes them a guaranteed presence. Do you recognize that there's a fragility in the reliance?
MS. TOWER: I would say that there's a mutual benefit between Tucker and ourselves, for example, in the sense that they run a business and we would provide them with work. They have been here for us, absolutely, in terms of calling on them and storm response time, whether they're in New Brunswick working and as a result of weather forecasts we often have several days' notice and we're putting calls in for crews in advance.
MR. EPSTEIN: In addition to concerns we have about crews, we have concerns about the physical infrastructure as well. Now you've pointed out that only 26 of the transmission towers went down. Can you tell us, were there any outstanding repair issues with any of those towers at the time they went down? If the answer is you don't know, just tell us.
MS. TOWER: Nothing that would have prevented the situation that happened during that storm.
MR. EPSTEIN: You're saying that a brand-new tower just put up would still have gone down given that weight, is that what you're saying?
MS. TOWER: Yes, absolutely.
MR. EPSTEIN: But the question still was, were there any outstanding repair issues that you are aware of, or maintenance issues with respect to any of those towers?
MS. TOWER: They're listed in the appendix that was referred to earlier in our report, any outstanding issues. As we do maintenance or inspections on our transmission system and
our distribution system, we prioritize the things we find and we prioritize them into work that needs to be done immediately, within six months, within the next year, or should be checked on again. So we've detailed outstanding items in the report that we filed to the URB on the lines that were damaged.
MR. EPSTEIN: As a result of your experience in Nova Scotia in the last year and a half, are you considering any changes to either your procedures or the number of dollars you put into maintenance or the number of crews or the standards that you apply?
MS. TOWER: I would say that certainly from an investment point of view, we have invested in our plan to the tune of $120 million, on average, over the last five years. Everything is under review right now by the URB. We've provided a report on our response to the storm and our investment and I think I would like to let the URB process go through its natural course before I speak to things that we would be recommending be changed.
MR. EPSTEIN: To put it in a way that might not be helpful to you, it's that no, you're not thinking of making any changes despite the evidence in a way that might be more helpful to you. You're saying, we're holding off until we hear from the URB. Which of these might you . . .
MS. TOWER: No, what I would say very clearly is we have world-class consultants in with us, no different than when John Sherrod came up after Hurricane Juan. We worked very closely with him and we implemented and completely revised our emergency services restoration plan. These consultants are very helpful to us and the process will be helpful to us so we are looking at these issues with them. I just would prefer not to conclude on anything, in advance of the full URB process coming to its conclusion.
MR. EPSTEIN: But the changes you're talking about are with respect to your restoration plan. I think our focus here has been a bit more on the prevention side of it, that's really what I'm asking about.
MS. TOWER: Sorry, the restoration plan is done, we did that with John Sherrod. The consultants now are looking at the physical plant, they're looking at our call centre and they're looking at our transmission planning and so on - so it's more related to physical plant.
MR. CHAIRMAN: Thank you. We will now move over to the Liberal caucus.
MR. HAROLD THERIAULT: Thank you, Ms. Tower, for your presentation. You are probably going to hear a lot of the same questions here today, I believe they are all being
asked by the same people all over the province. I will probably ask some that are similar, but probably maybe on a little different level.
I know that we had a power outage in November in the Digby-Annapolis area and I know we had an outage again over Christmas. Probably the worst of the two was the latter one, over Christmas. It was cold down there for two or three days and people were trying to enjoy Christmas - they certainly never let me enjoy mine - and the communication was pretty bad for them. We had a number published in the telephone book there that wasn't even the correct number. I found that out myself, personally.
Mr. Huskilson called me that very day that it happened and he gave me a whole list of numbers but they're in my office and I'm just wondering how to get them out to the people, because I'm going to give them to every one of them, somehow, I'm going to give them those numbers that I received. I received a lot of things, I received a lot of good advice.
An old engineer called me and said, those towers, every third one, if it had a guide wire down it on both sides, they wouldn't have had that trouble. Does that sound like common sense to you? It does to me. We do it in the big masts on our ships that pretty near roll bottom-up and in gales of wind, it doesn't move a bit. You can do the same thing with those towers and I believe you could take a lot of advice like that from people who know, and it would work. It's going to happen again, this is Nova Scotia.
People think these storms are worse, they're no worse than they ever were, they just don't remember the last one. In a year's time we're not going to remember this storm. We're going to get another one and say, that was a bad storm, we've never had anything like that, but it is going to happen. I don't know if I have a question or not. (Laughter)
Anyway, I have a lot of questions because like I said, they're being asked. Maintenance was the big one. People are saying, there's no maintenance anymore, the three days down there over Christmas nobody saw a hydro vehicle. Two or three local people who were working, we couldn't even get hold of them, they took their phones off the hook and I don't blame them. Maybe not today you can't but can you tell us how much money has gone into maintenance this past two years, according to 14 years ago, from 1990 to 1992? How many man-hours were in that time period, too? Dollar-wise and man-hours, or person-hours I should say.
MS. TOWER: First of all I would suspect that is one of the questions in the 500 questions we received as interrogatories. That's likely in there and we will be preparing an answer for that. I can tell you that the investment in my business, both from the capital side and the operating side, is in the area of $120 million and that has been relatively consistent over the last five years or so. But I can't really speak further back than that. Again, I'm sure that this question is asked.
MR. THERIAULT: Can power be diverted from one area of the province, when needed, and put in another area? Can that be done and has that been done?
MR. RICHARDSON: I guess the quick answer is there would be limited capability to switch. I assume what you are asking is if one feeder was damaged, could you switch to a different one that wasn't damaged to supply the customers. Have I got your question correct?
MR. THERIAULT: Could you take power out of one area and divert it to another area of the province?
MR. RICHARDSON: No. Basically, the way the system would work is that anybody who is connected to the system will draw power from the system and the system is built to deliver power to anyone who is connected to it and when outages occur, basically it is like your house. A circuit breaker trips and a line gets disconnected from the electrical supply. So the lights go out in that room and you need to find out what caused the circuit breaker to trip and fix that before you can get power back to that circuit.
MR. THERIAULT: Thank you.
MS. TOWER: For example, our power plants would ramp up and ramp down in terms of their generation, depending on the draw in the province, the amount of electricity that is being taken at any particular time. So it is a dynamic system that somewhat operates itself, although that is simplifying it way too much.
MR. THERIAULT: Another big question I have, I had a shareholder from Nova Scotia Power call me over Christmas and told me not to believe for one minute that the shareholders of Nova Scotia Power were driving the agenda of Nova Scotia Power. Is it true that Nova Scotia Power cares more about its shareholders than it does its customers?
MR. RICHARDSON: No.
MS. TOWER: So, as General Manager of Customer Operations, my primary concern is always for the customers of Nova Scotia. I answer to them and the people who work for me, the 900 people in my organization work every day to serve our customers and ensure that be it in a storm situation or on a regular business day that we are trying to provide to them the customer service that they deserve. They are not focused on the shareholder. They are absolutely focused on the customer.
MR. THERIAULT: Thank you. I will pass it over to Mr. Gaudet.
MR. CHAIRMAN: Mr. Gaudet.
MR. WAYNE GAUDET: Mr. Chairman, I want to start off by thanking Ms. Tower for appearing before the Economic Development Committee here today and for her presentation. I want to continue with what other members of the committee have raised, concerns about the power outage from November. Since I have been the MLA for Clare, any time that the power goes off, I usually receive a few calls and back in November I received a few calls, which was normal.
What was not normal, I would say for the few days and probably weeks that followed, I'm sure I've seen over 100 people who have raised concerns, brought concerns to my attention about Nova Scotia Power. Many people are just wondering, how come the power is going off more now than ever before? Many people believe that the power system in Clare is not maintained at the level it used to be. I know in Clare we used to have two power trucks. We used to have four linemen. Now Clare has been cut back to one truck and two linemen so it is hard to try to explain to people that we are receiving the same type of service that we used to in the past.
There is no doubt that the level of comfort among our residents with regard to the service that Nova Scotia Power is providing is dropping. It's dropping among the general public at home. It seems every time that the weather is forecasting or calling for bad weather or for a storm many people are asking themselves, or wondering, is the power going to go off? I know many people in Clare and outside of Clare have been buying generators. I'm just curious, does Nova Scotia Power have any data on how many Nova Scotians have purchased generators or if you do or don't keep track of this? I guess that would be my first question.
MS. TOWER: No, we don't.
MR. GAUDET: You don't. Another concern that I have heard from our residents, especially - and, again, it touches on maintenance - is that when poles need to be replaced, especially around their communities, they usually give me a call and many times I have referred that information to your company. I know that many poles have been replaced but, at the same time, I know many poles have not been replaced.
I have heard earlier from your presentation that Nova Scotia Power carries out an annual inspection. I'm just curious, in terms of the time frame involved, does Nova Scotia Power have a time frame they're looking at in order to carry out some of this maintenance work? I know some people in the community of New Edinburgh - and this has been ongoing, I'm sure, at least, for six or seven years now - where there are poles in their communities - I know representatives from your company have been down more than once - that continue to go down but it seems every time there's a problem with the wind, there's always problems with power, especially in that community. I guess my question to you is, is there a time frame that your company is looking at in trying to carry out some of this work?
MS. TOWER: On our maintenance and inspection practices, first of all, we would inspect our transmission plant once a year; our distribution plant - which would serve local residents - we would do that every two years. We have very skilled people who are doing these inspections and, often, they are linemen who are no longer doing line work.
Whatever they find, they categorize it into, should be done immediately, needs to be done in the next six months, over the next year, or so on. That is then reviewed before it gets into an official work order and then gets taken care of. It is reviewed again by our engineering staff. We would have procedures that we would have to test poles to determine whether they still are sound, structurally. That is the procedure we would go through.
MR. GAUDET: I guess one final comment. Many people that I've had a chance to talk to have been following the coverage, the fact that Nova Scotia Power is seeking a rate increase. Many people from home have difficulty in understanding. Right now they are paying lots for what they consider the service to be, which may or may not be as normal as it was in the past. Yes, we have seen some cutbacks in our own area, but at the same time, they have a difficulty in looking at paying more money when it appears to them, especially, when they have poles next to their house or close to their house that are ready to fall and that maintenance just seems to be put off and put off. Again, it's very difficult to try to provide a sound judgment, in terms of why Nova Scotia Power is seeking a rate increase at this time when they have personal difficulties in their own communities.
I will turn whatever is left in our time to our colleague, Mr. Chairman. Thank you.
MR. CHAIRMAN: Thank you, Mr. Gaudet. Just a few questions. Has there been any change in the amount of money spent and the man-hours spent by Nova Scotia Power in maintenance in the past 10 years?
MS. TOWER: Again, that question would likely be answered through the interrogatory process. What I can say is that over the last five years, certainly, that the investment - that my total budget, both operating and capital, would be in the order of $120 million and that has maintained fairly steady over the last five years.
MR. CHAIRMAN: But five years prior to that, can you tell us what that budget was?
MS. TOWER: I don't have those numbers with me, I'm sorry, but I do know that that question, again, is part of the regulatory process which we are under right now and will be filed officially with the URB and filed publicly.
MR. CHAIRMAN: How long have you been in your position?
MS. TOWER: I have been here two and a half years.
MR. CHAIRMAN: Can you tell us, without getting into specific numbers, then, has the amount changed in the yearly amount spent on maintenance in the last 10 years? Can you tell us if it's the same, can you tell us if it's greater, or can you tell us if it's less?
MS. TOWER: I can't. I don't have those numbers with me, I'm sorry. I know that we will be providing that information through the interrogatory process.
MR. CHAIRMAN: You realize that that's one of the main concerns Nova Scotians have, and I'm quite surprised that you wouldn't have those numbers because that's what Nova Scotians have been telling us, and if anything, they're looking for your company to put those concerns to rest and to be able to tell us, definitely, that, look, we have been spending the same amount of money, and when I hear that $120 million has been spent, consistently in five years, well, $120 million five years ago isn't worth the same as $120 million today. Labour costs are higher, equipment's higher, everything is higher. Naturally, there are concerns with that.
One of the issues that was raised before on the question of liability and the protection Nova Scotia Power currently enjoys because of the Act of the Legislature, you indicated that you would only pay out claims for negligence if it wasn't as a result of a storm. Could you explain to us, why should you not be held liable if you were negligent, regardless of whether there was a storm or not?
MS. TOWER: Sorry, I may have misspoken. Certainly, during Hurricane Juan, for example, we would have paid out claims where we contributed to an issue, whether it's storm or not storm, the same rules would apply.
MR. CHAIRMAN: It's your position that any individual Nova Scotian has a right to take legal action against Nova Scotia Power for damages incurred as a result of a power outage.
MS. TOWER: A power outage where our equipment has been faulty and therefore we've contributed. I think we will provide the policy. Not generally as a result of weather events. No utility would do that. We would not provide claims for loss of revenue as a result of a weather event, such as November 13th and 14th, but certainly when our equipment contributed to that, specifically to the issue the customer had, then there is a claims process the customer would follow.
MR. CHAIRMAN: So if it is found, for example, through the URB process that you were negligent in some way with your infrastructure that failed during that outage, is it your position today that any affected Nova Scotians would have a right to make a claim against Nova Scotia Power for losses incurred during that outage?
MS. TOWER: If there is damage inside a home, for example, and our transformer was faulty and caused damage inside the home, then that would be something to which I'm referring.
MR. CHAIRMAN: I look forward to the information you're going to provide us on that. One of the issues that we raised in trying to be constructive during the rate increase hearing was the issue of the reverse 911 system, which is a communications tool used in the United States, primarily in hurricane areas and in other areas, that would actually, rather than people having to call Nova Scotia Power, this would send an automated message to affected areas. Certainly from the information we've received, it's a much more reliable system. I know we received a letter from Mr. Doig of your company that indicated you're looking into this. Could you tell us specifically what actions you have taken in regard to communication with the province and within your own company to look at implementing that type of system here in Nova Scotia?
MS. TOWER: Again, this week, actually, as part of the review process, we have a communications consultant in, that the URB has appointed. She is looking at communications generally and as part of that, we would be talking to her about things like reverse 911.
MR. CHAIRMAN: What have you learned about reverse 911 that you can share with us today?
MS. TOWER: I have not been specifically involved with those discussions. Certainly when her work is concluded and as she files her report with the URB, then it will be there for the public to view.
MR. CHAIRMAN: I guess that's one of the concerns that I think you're hearing from other members today, that a lot of the stuff that we feel should be being done right now seems to be all being held back until the URB process, before action is being taken. I find it quite unfortunate that this type of information isn't readily available, and that, for example, this reverse 911 system that you are not aware of the cost, whether our system can handle it, how it could be implemented and that.
I think what we are trying to communicate today is that there is a general frustration out there that the company doesn't seem to be moving quick enough and while we are pleased there is a URB process, it seems to be acting more as a shield and as a delay rather than seeing concrete action being taken immediately to address some of these problems rather than waiting until the IRs are answered, the URB process is finished and that specific information can be provided and the assurances given to Nova Scotians. I think you will recognize there is a lack of confidence in your company today among Nova Scotians and the question is, what can we all do, and the company do, to restore that confidence?
MS. TOWER: Alan, go ahead.
MR. RICHARDSON: Perhaps I could take the chance to assure the committee that we are not idle. It's really a matter of priorities. We have the systems today which we thought were going to deliver a certain level of service and they let us down in November. It has taken some time to figure out exactly what happened and to figure out how to fix it and we worked closely with our supplier, Aliant, to do that. We continue to work to make the service better for the next event which we hope will be a long time coming but we want to be ready if it was to happen tomorrow. So I don't want to leave you the impression that we are not interested in these other things but we have prioritized the work we have to do and we have been very focused on fixing the systems and the problems with the systems that we experienced in November with our current configuration which is immediate. It will take some time, even if we were to go with another way of doing it, that is going to take some time to implement and we are focused on making sure that we are ready now and that anything we have learned from November is acted on immediately.
MS. TOWER: Could I add as well, that while I talk about this URB process, we have many people in our organization involved in having discussions with these consultants about the ways to do things better. So it is absolutely about trying to improve the things that we do with the help of people who have a broader view of some of these things based on their experience.
MR. CHAIRMAN: Mr. Taylor, for the second round for the PC caucus.
MR. TAYLOR: As I expressed earlier, I am disappointed because one of the reasons we postponed and rescheduled different hearings in the Nova Scotia Legislature, or at least at the standing committee level, as you know, Mr. Chairman, was because we were waiting for this report to be filed. Is that not correct? We were not told, coming into this meeting, that we couldn't go and ask questions about the number that is in the workforce. I mean anybody in Nova Scotia can tell you that a workforce is very important to any utility or any industry or any job. Again, in that context, I'm going on the numbers that I have and that is that you cut your workforce in half and consequently the response times are not sufficient. The reason I say that, and I think anybody would say, that as soon as the linemen get on the job, the problem is usually rectified in short order. It's Nova Scotia Power Inc. It's not Nova Scotia/New Brunswick/North America/United States power, it's Nova Scotia Power Inc.
Again, I maintain that you have to hire more linemen - and I'm not sure if that is politically correct - linemen or line people or whatever it is, but I think there is a problem there and when are you going to address that? You seem to be moving toward rectifying, to a degree, the communication problems that we have and I appreciate that but again, the information we have is that you have cut your workforce in half. When, specifically, are you going to start increasing it? In fact, your internal listings, I note that in 2004, if I can just have
your indulgence for a second, early 2004, Nova Scotia Power Inc. posted 18 jobs all across Nova Scotia and did not hire a single person to fill one of those jobs.
MS. TOWER: I don't think that information is correct.
MR. TAYLOR: Well, prove me wrong then.
MS. TOWER: I don't have the information. I know we have hired people, certainly in the line . . .
MR. TAYLOR: Full-time people? Full-time linemen? How many have been hired in the last 10 years?
MS. TOWER: Again, I would say one thing. The URB has asked specifically for consultants to address the issue of linemen.
MR. TAYLOR: Mr. Chairman, on a point of order, they don't phone our customers in our constituency, the URB, when the power goes off. They phone the communication centre and the MLAs and you had said, in Nova Scotia Power Inc., with general acceptance from MLAs of all Parties, have said we will work with Nova Scotia Power Inc. and when this hearing was held today, I was of the impression that we could glean these types of answers from the witnesses who came and appeared before this committee. I have to say, I am disappointed that we aren't getting answers. It's not the URB that has to answer to our customers and our constituents out there.
MR. RICHARDSON: I wonder if I could just add one thing to this discussion. The topic has come up a few times about what is the right number of line workers. How we really judge what the right number is, is based on the performance of the system. Something we haven't talked about to this point is, in 1990, our reliability was at its worst level. Over the period since then, pre-Hurricane Juan up to September 2003, we improved that reliability tremendously. In the four or five years leading up to Hurricane Juan, we hit record-best levels three of those five years. That was all the while balancing, how many people do we need, how much equipment do we need and reinvestment in the system.
Ultimately, we look at it, I think, as saying, what's required to deliver the best reliability possible to our customers while trying to control our costs? We think that is really what economic development would want from us, is reliable power at the lowest possible cost.
Juan and November are unique circumstances and we are having full reviews of those but I wouldn't want to lose sight of the fact that we had a period, as I say, from 1990 to September 2003, through all those Winters and all those Winter storms, and that same system held up very well and performed very well.
MS. TOWER: We would benchmark ourselves against other utilities in Canada with those numbers. We actually do a calculation and benchmark ourselves, from a reliability point of view.
MR. TAYLOR: Well, I don't think, with all respect, you can sit on your laurels. I'll yield the floor to my colleague, Mr. Chairman.
MR. CHAIRMAN: Mr. Parent.
MR. PARENT: I just want to follow up on questions, in terms of infrastructure renewal and how it ties in with the storm. Many of the crews in my area that followed the last major storm were from New Brunswick. They were telling many of my constituents that the lines in our area were terrible compared to New Brunswick lines, that the infrastructure renewal hadn't been done. That is one of the things I hear time and time again and it ties in with the presentation that my colleague and the Speaker of the House and myself made on the rate increase.
I raise the issue of executive salaries, perhaps, somewhat unfairly, although I don't think so, really, compared to the salary for the President of the United States and from the figures we have, some of your top executives are making far more than that. The way it ties in is that many of my constituents are saying the same thing that the constituents of my colleague, the member for Digby-Annapolis, said, that the bottom-line concern seems not to be service to the customer, maintenance of the line, adequate personnel, infrastructure renewal, but it seems to be a healthy shareholder payout.
When you look at your annual report, which I have done, you go through the front part of it, all about the payout to the shareholders and how it's been improved, and finally near the back end, you get something about how service to the customer has been improved, okay, not nearly to the degree that you've done shareholder - by the way, what are the salaries for, say, just give me the top three, for Mr. Mann, Mr. Huskilson, Mr. Tedesco, do you have those?
MS. TOWER: I do not have them. They will be published very shortly. Mr. Mann, as you know, has resigned, or has retired, I should say, but those salaries get published in our Management Information Circular as part of our annual filing. Our results are being released tomorrow and, soon on the heels of that, the Management Information Circular will be published. Now, you have to keep in mind that those individuals do not work - some of them don't work at all for Nova Scotia Power and some of them only work part-time, only part of their salary is charged to Nova Scotia Power.
MR. PARENT: Would you understand, though, why my constituents, seeing those salaries and seeing the outages that they have had - and it's not just the Winter storms because we have had a lot of outages due to trees coming down in my area. Now, granted,
we have a lot of dead elms in the Valley area. How would you respond to them when they look at those salaries and say, look at the service that I'm getting, Mark?
MS. TOWER: I would say that, from my personal point of view, as I said earlier, my focus is on customer service, investment in our plant, maintaining reliability, hooking up customers - the Management Resources and Compensation Committee sets the salaries of the executive.
MR. PARENT: Specifically then, in terms of infrastructure renewal - because we have already established that the amount of line personnel has dropped by almost 50 per cent - can you give me the figures for infrastructure renewal for the lines in the Annapolis Valley area in the last five years, and how it compares with other utilities across Canada?
MS. TOWER: I don't have those numbers specifically.
MR. PARENT: Could you provide those in the future?
MS. TOWER: We could provide them, sure.
MR. PARENT: Because this has really come to the nub of the issue. The nub of the issue is that while some of the storms have been severe storms, we don't deny that, the real concern here among my constituents is that personnel haven't kept up, maintenance and preventive maintenance hasn't kept up, and infrastructure renewal hasn't kept up and that the chief goal of Nova Scotia Power Inc. now has been supplanted by providing healthy shareholder payouts rather than providing the best possible power.
Now that may be somewhat unfair but we do know that the line personnel have been cut in half. We do have anecdotal evidence, at least, from New Brunswick, from the crews that were in - and you can go back and ask them, I checked it myself - that they are saying our lines are in very poor condition. So clearly some infrastructure renewal hasn't been done and preventive maintenance, and again it is anecdotal, but preventive maintenance in terms of tree-cutting and making sure that those things are out of the way so that when we have storms, which we will have in this part of the country, that we don't have power outages. I'm not talking about the large power outages now, but I'm talking about power outages due to the dead elm problem, that that maintenance hasn't been done. Every MLA will tell you the same thing, that they don't see that being done and their constituents don't see that being done. Now, is that a fair comment or not?
MS. TOWER: I would go back to Alan's comments earlier. Back in 1990, our reliability, which is the way that we measure the performance of our plant, the number of outages, was in a situation where it was not acceptable to us. We set out on a path to begin
investing in our plant such that we would get it down and over 10 years we did that and we would benchmark favourably with other utilities in the Canadian Electricity Association around reliability. That does not come without investment both in our plant as well as trimming of trees.
MR. CHAIRMAN: Mr. Parent, I'm going to have to cut you off at that point and go to the NDP caucus.
MS. MARILYN MORE: I cover the constituency of Dartmouth South-Portland Valley and it seems that some neighbourhoods are more frequently hit by power outages than others on a continual basis. One of them happens to be the Maple Ridge Mobile Home Park which is at the end of Gaston Road, just alongside the Circumferential Highway. Just as recently as January 20th, their power was off for eight hours. I'm wondering why are some neighbourhoods continually hit with power outages? What would explain that? Is that information, the details on what has actually happened, available to those residents?
MS. TOWER: Certainly we have very detailed information on all outages across the province. I can't speak specifically to that one but certainly there are many reasons for power outages, everything from cars, or in fact snowplows sometimes hitting power poles and taking power out, sometimes it's animals, sometimes it's trees, sometimes it's weather. There are very many reasons why power goes out but I would be happy to take a look at that and get you the information that you need.
MS. MORE: I would appreciate that because the frequency of these power outages suggests there might be an infrastructure problem so it would be worth checking into.
MS. TOWER: One of the things that we do, we monitor frequent power outages and as part of our inspection program, certainly when an outage happens on our transmission system, we immediately go back and investigate why and determine whether the problem is systemic and we need to change out some equipment. That is part of our regular process.
MS. MORE: My other concern is around your emergency services restoration plan. I notice that the fifth priority is regarding individual customers, possibly people who are very isolated or suffering severe health conditions. It might be the frail elderly or infants or people on powered medical equipment. I'm just wondering, has your experience since Hurricane Juan changed any of your policies, your practices or response times to these vulnerable people across the province?
MS. TOWER: I would point out to you that we have a program for critical care customers, customers who are dependent on electricity to maintain their health, they have a doctor's certificate. We have a system whereby we call these customers and let them know
the situation that they find themselves in in terms of what the restoration times might be. In fact, during the November storm, when we couldn't contact some of these customers, we worked with Emergency Measures Organization and had emergency personnel go knock on doors to make sure that these people were safe. So we do take that very much into consideration and while we don't necessarily restore power to those people in a different manner, to a higher priority, we certainly let them know the situation and give them the information so that they can make their own decisions.
I would also say that individuals are lower on the priority list, simply because we often need to get the supply into their area or their community. It's no use hooking them up, getting the problem to their house fixed, before we actually have an electricity supply in there.
MS. MORE: So being on that critical list doesn't suggest a faster response time, it's just that someone will be checking on them, either by phone or in person. Have the numbers on that list increased since Hurricane Juan?
MS. TOWER: I don't know that, I don't know the number of the customers on the . . .
MR. RICHARDSON: Not substantially.
MS. MORE: It's interesting, news reports seem to be suggesting that municipal emergency services, volunteer fire departments, various police services, seniors organizations have taken up the call and they're trying to identify more vulnerable people in the community and arranging some sort of buddy system or check-in system. That seems to have relieved your corporation from improving your identification of these more vulnerable people. I'm just wondering, are you supporting these organizations and services in any way?
MS. TOWER: One of the things that we have done since Hurricane Juan is we've improved our relationship, we work much more closely with the Emergency Measures Organization on a continuous basis. We try to get good information to organizations like Community Services and Red Cross to allow them to understand, in particular, if there are communities that are hard hit and will be a longer period of time without power. That allows them to go in and set up comfort centres, if needed. They found that process very useful and I think EMO would say that our relationship has benefited both of us.
MS. MORE: Have you checked with other utilities in your sector or the MPCC, to see what the norm is in terms of providing emergency support to more vulnerable customers?
MS. TOWER: No, I have not personally had that conversation with other utilities.
MS. MORE: So you don't know if what you're doing is all that's necessary or it's just what you're willing to offer?
MR. RICHARDSON: I think you could say that at the time that we set up this process, we would have benchmarked with other utilities and tried to get to a best practice state. What I'm not sure about is whether it has been in place for a number of years, or just that we haven't had these size of events. I don't know whether we've had any recent conversations that would say if other utilities are doing things differently.
MS. MORE: Well, it might be worth checking into because a lot of people have brought their programs more up to speed in order to react to the severe weather conditions. It may be that we're a little bit behind the times in terms of what your company is able to provide.
MR. RICHARDSON: That's a good idea.
MS. TOWER: I would tell you that John Sherrod, who is the consultant I have referred to many times, fought storms, as he would say, with Entergy - which is, as you would know a large utility in the United States. He spent many, many years as what he would call "storm boss" and it was he who gave us much of the advice when we revised our emergency services restoration plan. So he has been all through that and would understand what the best practices would be; in fact, he now has a consulting organization to provide this expertise to others. So he has been through that and I think his information would say that we would be within good utility practice in terms of what we would be doing.
MS. MORE: Well, I'd like to see that double-checked. Thank you. I'm going to pass it over.
MR. CHAIRMAN: Mr. Wilson.
MR. DAVID WILSON (Sackville-Cobequid): I know I only have a few minutes here so I'll get right to my questioning. A lot of the residents in my area, and I'm sure across the province, are concerned with maintenance. You indicated that the inspectors generate a work order and those work orders, I believe, end up in stations or substations for the crews to work. Who determines on a daily routine what work orders are done by the crews when they go to work every day?
MS. TOWER: We have a work management system and these work orders are fed into our work management system and timelines are set for the maintenance to be completed and they would follow that. The information would be generated daily for our work crews around the province.
MR. DAVID WILSON (Sackville-Cobequid): Do you keep track of these work orders on maintenance, on the timeline they do, and do you feel that the crews are spending enough time in their day allocated solely for maintenance and work orders generated through the inspection system?
MS. TOWER: We do track maintenance that gets done, absolutely, we do.
MR. DAVID WILSON (Sackville-Cobequid): But do you feel they are doing enough in their daily routine, in their daily schedule, to address the issues especially brought forward by the inspectors?
MS. TOWER: Yes, the maintenance is getting done in the timelines that we would request it to be done by the line crews.
MR. DAVID WILSON (Sackville-Cobequid): Another quick question on management/employee relations. I think in any company the productivity or end result is directly related to management/employee relations. I know over the years there have been times when employees have had bad relationships with management, especially several years ago when a dozen or so linemen left the company and went stateside. Do you monitor the relationship or how do you figure out what your relationship is between your employees and your management? Do you have a way of judging if your management is doing a good job for your employees?
MS. TOWER: We would have a couple of ways that we would do it or that I would do it, personally. One of the ways is that we have an employee survey where we would survey on a number of issues. One of the best ways I find, personally, is just to get out with the crews and I was doing that yesterday and was talking to a number of linemen. Things are feeling fairly settled out there from their point of view; certainly, that was the impression I was left with.
MR. DAVID WILSON (Sackville-Cobequid): Since I only have one minute, a lot of people have come to me about issues they have when they call with a problem on their service at home. It has been in the media in the past about being told, it's only a five-minute fix if the crews got there. Is there any talk about having a fast-response truck or crew that could go and do these small jobs, instead of taking them away from that and putting them on a job that may take them three or four hours, when a small crew or a fast-response crew could do 10 or 12 of those quicker jobs and satisfy a lot of the complaints I hear in my community? I'm sure the other members of the committee hear about the time that it takes just to fix their problem. Have you had any talks about that?
MS. TOWER: We have employed something we call single-man response, which is a single person in a truck that can address certain issues. We found that to be very beneficial because they're in smaller trucks and they work on shifts, seven days a week. In Halifax, for
example, we would have those crews on the road 7:00 a.m. until 10:00 p.m. So they are able to respond to small-trouble calls, as you would say, things like street lights, services and so on.
MR. DAVID WILSON (Sackville-Cobequid): But do you take them away when there's an event like the storm in November, take them off that and just put them on a normal crew that restores a larger . . .
MS. TOWER: We would always leave some crews to do, as we call it, 911 response or some emergency response, absolutely, but we do take them off to do storm response.
MR. CHAIRMAN: Thank you. I have a few questions in wrapping up the Liberal caucus time. Based on the questions you've heard today, Ms. Tower, is it your position before this committee today, that Nova Scotia Power has the necessary personnel and linemen to provide Nova Scotians with a safe and reliable form of electricity?
MS. TOWER: I absolutely believe that the level of investment that we've made, the number of personnel that we have, and our liability statistics we have invested in our plant will provide reliability that we can be proud of and a good, reliable infrastructure.
MR. CHAIRMAN: On the issue of the personnel available, I'm curious to hear your comments on January 26, 2004, in an article in The ChronicleHerald by Judy Myrden, it was reported that David Hay, CEO of New Brunswick Power stated, "We're constantly supplying people," to Nova Scotia Power and he went on to question whether New Brunswick Power was properly being paid for their services. So in light of your previous answer, how do you justify his comments if you have the proper personnel in place for what Nova Scotians need?
MS. TOWER: We would have a mutual assistance agreement in place with New Brunswick Power and we would be supplying them with crews. Certainly, in their ice storm a year or so ago, we would have had crews up there for several days, if not a week. We work very closely with N.B. Power and we both understand the benefit of having that mutual assistance agreement.
MR. CHAIRMAN: Then why would he make that kind of statement? If it is a mutually beneficial agreement, why would he go out of his way to say listen, we've sent our crews so many times down to Nova Scotia we're starting to wonder whether we shouldn't be charging here, which obviously one would infer from that is that they're not getting nearly as much support or requiring, more importantly - is what I would say - support from Nova Scotia linemen, as what you're requiring from them? Why would he make that statement if it is a mutually beneficial relationship that's equal for both parties, if he now thinks it's time to start charging your company for the amount of services they're providing?
MS. TOWER: It would be difficult for me to speak for Mr. Hay. I have not met him. But I would say, again, that over the last 10 years, we would have provided crews to New Brunswick and they would have provided crews for us. We do pay for their services. Again, the mutual assistance agreement would determine how payment happens. Certainly, we are happy to talk to NB Power. I'm in regular contact with my counterparts up there and we are happy to talk to them on this issue.
MR. CHAIRMAN: Have they made a formal request for payment from Nova Scotia Power?
MS. TOWER: When we have crews going there or they have crews coming here, we pay. They send us bills and we pay. There is definitely a cash transaction.
MR. CHAIRMAN: So why would he suggest that they're not properly being compensated if they are sending you bills? Why would he have made the statement in the first place?
MS. TOWER: Again, I can't speak for Mr. Hay. I don't know.
MR. CHAIRMAN: You don't know?
MS. TOWER: I do know we pay them and I do know we trade back and forth. We call on them, they call on us. We have not entered into formal discussions with NB Power but, certainly, as we have said many times, we would be happy to. We are in constant contact with them. We have a close relationship with NB Power on many levels.
MR. CHAIRMAN: Well, we've never complained, to my knowledge, of the level of service that we have been providing them and the CEO of the company has gone out of his way to publicly complain about the amount of service they're being asked to provide to Nova Scotia. If you don't have an answer to that, I guess I can't ask any more.
I am curious, could you tell us today how does Nova Scotia Power compare to other utilities in North America on the issue of pricing to its customers? Where are we ranked? Are we the most expensive, least expensive, where are we?
MR. RICHARDSON: No, it would depend on which region you were to compare to. Let me say that in the Northeast, if you were to look at, sort of, Atlantic Canada, down into New England, we would be a lower price. Prices in Boston, for example, would be quite a bit more expensive than in Halifax. That would be an example.
In terms of Canada, if you went across Canada, you would find that, versus utilities that have hydro generation - let's say, British Columbia, Manitoba, Quebec - they would
enjoy a pricing advantage which is natural because they have, basically, free fuel in terms of their generation. In terms of the others, we would probably be in the middle or slightly to the lower end.
MR. CHAIRMAN: On an economic development viewpoint, prior to the recent rate increase request that Nova Scotia Power submitted to the URB, did the company undertake an economic impact study prior to making that request?
MR. RICHARDSON: Did we undertake an economic impact study?
MR. CHAIRMAN: Well, I'm sure you realize that any increase in power rates has a significant impact on the economy of Nova Scotia, or future growth and the growth of the province. So prior to making that request, did you do the due diligence of going out and seeing exactly what impact this would have on consumers, industries, et cetera?
MR. RICHARDSON: Well, we certainly looked at the statistics that I just mentioned, where we stood. I think, most importantly, we tried to work with the folks who are in business in Nova Scotia and who, obviously, would have the best knowledge of that impact. That was really a fundamental part of reaching a settlement. In our final application to the regulatory we put forward, as you probably know, a settlement agreement, where the industries, for example, who intervened in the hearing process represented 85 to 90 per cent of the electricity and supported the agreement. So that satisfied us, I guess, that we were at a place which allowed them to continue to be competitive and continue to prosper and grow.
MR. CHAIRMAN: Well, with all due respect, that is a rosy view of them endorsing your increase. Basically, they were being told, you can have an increase in the range of 14 to 20 per cent or we are going to, instead, give you an increase in the range of 7 to 12 per cent. Now, naturally, any company would say, well, that's a lot better, but for the company to turn around and say, we think that's an endorsement from industry to say that our rate increase and where we're going is good for this province, is good for those industries, I just don't buy it and I don't think that is an accurate statement and I think that is clouding the issue. I ask you again, do you have a study you can present to this committee that shows that your company went out of its way to see what the economic impact would be on this province prior to asking Nova Scotian consumers to pay more for their electricity in this province?
MR. RICHARDSON: I think we relied, as I said, on working with the folks who would be affected. We are obviously a cost of service regulated company so I think folks would be familiar with that. Our rates are set based on an approved cost of service. We would view it and say that the folks who would have concluded that the settlement was a good arrangement had already gone through a full review of all of the costs that we put forward.
As you may be aware, between 2002 and 2005, the thing that really changed was our taxes, it's not something that we could control. We work very hard and have kept our increases well below the rate of inflation over quite a substantial period of time but, quite frankly, we ran out of options in terms of paying on a tax bill. So we would look at it and say we worked with the people who would be most affected and that we think we enjoy - not a perfect solution - but the best solution at the end of the day.
MR. CHAIRMAN: I guess Nova Scotians will ultimately make that decision. I'm curious, there has been a lot of discussion about the impact here on Metro and the Valley. I represent the region of Cape Breton that has undergone significant power outages for what many in my community would see as not justified reasons, and certainly not common. We have heard a lot of talk today about the lack of confidence in Nova Scotia Power that hasn't been seen in a long time. Are you aware of a current contest that's on Q104, a Halifax radio station, that deals with your company?
MR. RICHARDSON: I'm not.
MS. TOWER: No.
MR. CHAIRMAN: There is actually a contest out there that if someone can properly predict how much time power will be out in a Beaver Bank subdivision that the winner or the one closest to the accurate total is going to win a generator. Now what stronger message has to be sent to your company to say that you have lost a significant amount of the confidence of Nova Scotians who are going out to buy generators, when radio stations are pretty much making a mockery of the power outages and Nova Scotians are frustrated? What confidence can you give us today that we are going to see a change in the amount of these power outages and that Nova Scotians, next time there's a storm, do not have to start by saying I wonder how long the power will be out this time? What can you give us as reassurance today that that is going to change?
MS. TOWER: I would simply say that we are undergoing a full review of our infrastructure, of our call centre. We look at our reliability statistics every year so we will continue to do that and provide Nova Scotians with reliable electricity as we have been.
MR. CHAIRMAN: That's it for my time. With that, there is approximately five minutes remaining. I would welcome Ms. Tower or anyone else from the company to make a few closing remarks.
MS. TOWER: I would simply say that the utility and review process that is underway will answer a number of the questions so I do apologize for not having that information today, but we felt it was important to be respectful of that process and the questions will be answered in the fullness of time.
Again, I would simply say that as General Manager of Customer Operations, I'm very proud of the work my people do, I'm very proud of the work that we do at Nova Scotia Power. We do work hard to keep power on for our customers and to have reliable power. It is difficult for us when a severe whether event hits like it did on November 13th and 14th but again, our job is to get our people mobilized to get power back on as quickly as we can for our customers. It does concern us very much when we have extended outages for our customers. We do work hard. As we always do, we're reviewing all of our processes internally through this utility and review process and we are looking forward to the conclusion of that and the recommendations that will come out of that.
MR. CHAIRMAN: Thank you, Ms. Tower and representatives of your company. Again, we appreciate you coming before this committee and we realize, as I mentioned earlier, the problems in setting up a date and we certainly appreciate the company working with us to establish a date today. Again, thank you on behalf of all members here for appearing.
Members, I suggest that we take a five minute recess and then we'll return after that to deal with some committee matters about upcoming witnesses and meeting frequency.
MS. TOWER: I want to thank you very much for inviting us here and for your interest in this topic.
[2:55 p.m. The committee recessed.]
[3:11 p.m. The committee reconvened.]
MR. CHAIRMAN: I'd like to reconvene our committee. When we last met there were a few outstanding issues. One I would like to deal with right now is the issue of putting together a letter on the Digby wharf. That's still being worked on and if it's agreed by the committee, once we've had an opportunity to work on it - myself, Mr. Theriault and Mr. Taylor, even Mr. Epstein, if you want - we can make sure you see a copy before the letter regarding the Digby wharf goes out. Then rather than wait until the next time the committee meets, if everyone is in agreement, once we've put together a draft that's acceptable to everyone, we'll just send that out.
Is it agreed?
It is agreed.
Very good. The other outstanding issue was the frequency of meetings. Mr. Epstein.
MR. EPSTEIN: I left off the other day by observing that there was no reason why we couldn't move to every two weeks, if that's possible in terms of what the Committees Office
advises us. We have a large number of topics that we've identified as being something we would like to turn to. The real barrier here is generally not our availability as a committee so much as it is organizing the witnesses and preparing the background material. I don't know if you, as chairman, have spoken with the Committees Office about what they think of this but if it's at all possible, I certainly think we could move to twice a month in terms of our hearings.
MR. CHAIRMAN: Mr. Parent.
MR. PARENT: I'd prefer not to move to twice a month. I'm speaking very selfishly here, I guess, we have on the backbench of the Tory caucus so few of us to handle all the committees that we have to sit on, particularly now with the tragic death of John Chataway. If we moved to twice a month, every other committee - because all the committees have ample, except for maybe Veterans Affairs - to ask the same thing and we can barely do it now in terms of covering the committees.
At the last meeting on Tuesday, I think, there were two of us absent and at this meeting there is one absent. I think if only one committee did it, fine but I understand that other committees want to do it as well. If they see us setting a precedent I would worry about it just in terms of our ability to handle it in terms of attendance at the meetings.
MR. CHAIRMAN: Mr. Taylor.
MR. TAYLOR: I would just want to add that we recognize that the stars, or at least the numbers on this committee, don't line up in our favour. Mr. Chairman, we will respect the wishes of the committee but if, in fact, you do go to two hearings a month, would you possibly consider doing them on the one day, to make it more efficient. If that would even be a consideration, I would appreciate that.
MR. CHAIRMAN: Mr. Epstein.
MR. EPSTEIN: I think I might have lost track of just how many members there are in the Cabinet at the moment but surely, there are about 12 or so backbenchers in the Government Party. If that's the case, they generally have about the same number to assign to committees as the other two caucuses. I don't know if that's an excessive burden if the rest of us are prepared to do it and assign people to committees, I would have thought that maybe we can manage it. I don't know that I find that point on the numbers all that convincing.
MR. CHAIRMAN: Mr. Parent.
MR. PARENT: Well actually we have eight and of the eight we have one who participates on only one committee, so we're really down to seven. I don't know how that compares to the other caucuses.
MR. EPSTEIN: Just make sure everyone goes into Cabinet and then you won't have to trouble yourself with committees at all and all will be well, won't it?
MR. CHAIRMAN: Mr. Epstein, myself, Mr. Gaudet and Mr. Taylor are veterans of the 1998 days and I remember having four backbenchers at that time. We used to be six and then we went down to four when two of us went to Cabinet. We do have a number of witnesses here. I did bring up the suggestion of twice a month. I think we can work through the Committees Office, it will present some challenges but we'll do our best to make sure there is no conflict between committee meetings. I don't think four-hour meetings is in anyone's best interest, back to back, and I know the amount of work that's being done by the Committees Office to put everything together. I would certainly support twice a month, where possible, and if for some reason there is a conflict, we can certainly discuss that and work around that. I would certainly be prepared to entertain a motion on that issue. Mr. Parent.
MR. PARENT: When you mentioned there were four back in your heyday, did you have twice a month meetings? What is the precedent on this?
MR. CHAIRMAN: I think committees, on their own - I can tell you, and Mr. Epstein would be well aware of this - where Public Accounts used to be and where it is today, it has undergone significant changes, to say the least. I think committees are like our Constitution, it's a living tree and they adjust with every year going by and with the membership. As for what was done 12 or 15 years ago, I cannot answer that question and I don't think this committee needs to restrict itself to that. Mr. Taylor.
MR. TAYLOR: I'm surprised that you gave my suggestion of holding two meetings on one day such short shrift. I think in the interest of those MLAs who are living a considerable distance from Halifax, it would make a much more efficient and hopefully, effective use of our time. I realize there's a lot of work that goes into any hearing but if we set the table correctly at the start, we could give our clerks - Mrs. Henry and the other staff members - enough time to make that work. It would certainly be a lot better but if you feel that it's too cumbersome on staff to work that in, then I guess we'd have to respect that view. I think it should be explored beforehand, before you so quickly dismiss it.
MR. CHAIRMAN: I'm more than happy to entertain a motion, if you wish to do that. I should advise on the issue of distance, if I'm not mistaken, I'm probably the member who is furthest away from the capital on the committee so there's no doubt that I'm well aware of the necessary travel involved for members of the committee, being three and a half hours away commute to get here.
MR. TAYLOR: Mr. Chairman, you know then that the House hours, from time to time are extended and we're certainly used to it, not that any of us like it, but I think if we had a two-hour hearing in the morning and a break for lunch, then a two-hour hearing in the afternoon, we could do the necessary work of the committee and save money to the taxpayers.
MR. CHAIRMAN: I've asked for some form of motion. I'm more than happy to hear a motion. Mr. Gaudet.
MR. GAUDET: Before we get to the motion, I just want to go back to when this committee was formed shortly after the election. This discussion came about on how often this committee would be meeting and at that time we had some extensive discussions over whether we were going to meet once or twice a month. In the end, people felt that we would be meeting once a month. At the same time, I recognize that there are probably some times where we have maybe a need to have more than one meeting a month and I respect that.
I would hate to see this committee make a decision today, if people on the committee decide we will change our policy that we adopted earlier to have two meetings a month. My preference would be to continue with the existing policy, however, I would be in favour - if there is a need that does come up now and then - to have two meetings a month, I have no problem with that. I'm certainly not in support of this committee to have two meetings a month.
MR. CHAIRMAN: I think in all fairness, with the discussion that was had and Mr. Epstein's comments is that, we currently find ourselves in quite a backlog and I'm not sure, over the history of the committee, if there has always been that kind of backlog. My thinking on this by having two meetings a month, was to try to clear up some of this backlog and hopefully, in fact, we'd be able to clear up quite a bit of it prior to the House sitting.
I think with any decisions made today, they are always open for review and certainly, with issues of March break or anything else, I'm more than pleased to work around that. I don't see this as a fixed rule, I see it more as an opportunity for our committee to try to clear up some of the backlog. We have some very interesting groups who have made requests to come before us and that we've requested. For example, if we just go by the order we have here, we'll see Trenton Works sometime this Summer, if lucky and if we go once a month we might not see them this year. That's the hard reality so my suggestion was simply to try to clear up some of this backlog, prior to the House sitting, that we meet twice a month and that we review the decision following that, at any time the members wish to see it reviewed.
MR. THERIAULT: I believe, with what Wayne is saying, we said that at the beginning. If we have to come in here and meet every day to meet the demand of the people who want to witness to this province, I believe we should be here. We can't be thinking about ourselves here, we're here to serve the public. If that list is long enough that we have
to be here every hour, we have to be here. We said that at the beginning, that we would meet once a month, and if the demand grew, we would meet twice a month or whatever, once a day if we had to.
MR. CHAIRMAN: Well, I'm hoping we don't have to go once a day. But, on the issue, Mr. Epstein.
MR. EPSTEIN: I think you put it correctly when you suggested it wasn't necessarily the intention to move to any kind of hard and fast rule, it was a question of trying to clear up a backlog. I think we're all interested in moving through most of the topics that have come from our caucuses onto the list. I think the reason there's some items that are called approved and some that are called unapproved wasn't because people objected to the unapproved items, it's just I think we didn't get around to really ranking them by priority. I think there's probably a general interest in going through them.
I think it's a question of going in a discretionary way on who's available and how quickly and, of course, coordinating with people's schedules. If enough committee members can't be available, then we're going to miss out. But we can certainly try and target dates. I think the way it should really be understood is, let's try to clear up the backlog, let's try to move, if possible, a little more quickly than once a month for the next couple of months to see where we get. That's about the extent of it, really.
MR. CHAIRMAN: And if that's agreed, I'd even avoid putting a motion, so that we don't have to worry that it becomes a hard and fast rule, that we have an agreement today that for the next few months at least that we try to get in as many of these witnesses as possible, and where it will work twice, we'll do it, where it doesn't work, we'll stick to one. Is that agreed?
It is agreed.
The question is, who do we bring in next? One of the issues that I had mentioned with some recent developments was the Department of Energy, for example, with the offshore accord and the impact it will have. I know the Deputy Minister of Energy has been doing some briefings with the different caucuses. Certainly, I think it would be of interest, for example, to have them appear before this committee in light of the economic impact that that's going to have. That was just my suggestion, but I'm open to what other members might have to suggest for our next witness.
MR. PARENT: I think we'd agree with that. It's good news, the $840 million and how that will spin out. Is that what you're talking about, that or are you talking about all aspects of the accord?
MR. CHAIRMAN: I think we'd invite them in. I think the accord would primarily be what they'd be here to come and discuss with us. I believe the signing is taking place on Monday.
MR. PARENT: I think we would agree with that.
MR. CHAIRMAN: Is that agreed, that we would request the Department of Energy to come in as our next witness?
MR. EPSTEIN: I have a question. One of the unapproved items is listed as the oil and gas industry's exploration of Nova Scotia-jobs. It reads in a peculiar way, and I'm not sure, I can't remember who put this on the list in the first place. Surely the issue isn't just the accord, the accord is an interesting one, but the real question for us as an Economic Development Committee is what's the prospect now for the offshore, what on Earth is going on, what's the current state of play? I think if we understand the topic as being that, then fine, but I'm not sure if that in fact is what the understanding is. I see some nods, and I can't see some heads, so I'm not sure what that is.
MR. CHAIRMAN: I'm not sure if Mr. Parent heard you, but I think today was a prime example. We did bring in the company primarily, at first, to speak about the outage, but we got into rate increases, salaries, everything else. So I think with the department coming in, certainly the accord would be a matter of discussion, but no, I fully agree that on the issue of jobs and exploration that I would not see - I don't think we've ever put limits on any of our witnesses who have come in, saying that we can only ask certain questions or talk on certain subjects.
MR. EPSTEIN: What you want is to make sure that they come prepared to discuss what it is that we're interested in focusing on. Can I also ask, perhaps Darlene Henry will know this, whether anyone else is lined up at this point? Is there anyone else lined up to come to us?
MRS. DARLENE HENRY (Legislative Committee Clerk): No.
MR. EPSTEIN: Have any attempts been made yet to check with the business parks and the OED about their availability?
MRS. HENRY: I did check with the business parks. I'm just trying to get a handle on that. From what I understand, there's a person in the Office of Economic Development who would help in that area, and also a person from the HRM area who would speak on that. Because there's something like 64 to 84 business parks within Nova Scotia, so to bring them all in at once is impossible.
MR. EPSTEIN: I was asking, really, because of the hierarchy of just what we might turn to first as a priority. Certainly the offshore is an important one, but a number of these others are as well.
MR. CHAIRMAN: Is it agreed, at least for the next time we meet, that we do bring in the Department of Energy? We will attempt to arrange that. Who do we want after that? Mr. Epstein, are you suggesting that we bring in HRM, or is that something you don't see as pressing?
MR. EPSTEIN: I don't. It's interesting, but I would have thought that some of the other areas were perhaps more pressing given that there's generally a lower unemployment rate in Metro. I can't remember why this item was even on the list, I have to say.
MR. CHAIRMAN: I'm not sure, I assumed it came from your caucus but I could be wrong on that.
MR. EPSTEIN: It might have, but I don't remember why. I don't think so.
MR. CHAIRMAN: Mr. Parent.
MR. PARENT: I'm wondering, this isn't on the list so you can rule me out of order, Mr. Chairman, but I'd be interested in having people in on the issue of the Highway No. 101 twinning and the impact, economically, the twinning has. It needn't be confined to Highway No. 101, maybe we could look at twinning throughout the province, on our highway system and its impact on our economic well-being.
MR. CHAIRMAN: Well, if I could make a suggestion on that, it might be an idea to invite representatives from the Department of Transportation and Public Works to speak on that, because I can certainly tell you the twinning from New Glasgow to Cape Breton is high on our priority list. In fact there are more fatalities on that section of road than any other section of road in the province, believe it or not. Anyway, I don't disagree with that. It's not on the list, but I think we are clearly going to have to - we've taken a lot of time today - sit down and start an organizational meeting, and we'll have to get all this put on it. I would have no problems with that.
Can we at least agree to the next two witnesses today? We've got the Department of Energy. Who else? Being that we have Energy, would it be an idea to bring OTANS in after them? They kind of both go, one with the other, and we have OTANS on the list. So it might be an idea that we get them to come in right after and again continue the discussion on the economic impact of our offshore. That's just a suggestion for the committee. If the committee agrees to that, we'll put those two groups and then maybe an organizational meeting to decide afterwards. (Interruptions)
MR. TAYLOR: What about looking at holding both on the same day? One would run right into the other. Just before we go, I have something I'd like to raise with you, Mr. Chairman, and the rest of our colleagues.
MR. CHAIRMAN: Okay, if that's agreed. One of the issues, the same day, if I'm not mistaken, it's going to be a challenge as it is for the Committees Office to try to make sure that we're not meeting at the same time to avoid conflict amongst the members, which is why if we do it in the morning, it's hard for us to do it again in the afternoon because there will be another committee meeting that's running in there. I think that's one of the problems, but we'll explore that, Mr. Taylor. I don't think that's a problem. We can certainly look at that in discussion. So if that's agreed, we'll ask the Department of Energy and OTANS to appear before our committee.
It is agreed.
MR. TAYLOR: Just quickly, Mr. Chairman, today, as you know, it was extremely
hard to elicit answers from our guests. I know there's not much you can do about it, but I just wondered, there's certainly a couple of legal minds here at our table and on our committee, I think I asked you during the course of questioning, were you not under the impression that once this report, this file - it was part of the reason we scheduled and postponed and rescheduled, part of the reasons, but other than just basically to be polite and let our witness tell us that we're pre-empted by the URB, really, there's not much more we can do.
It doesn't seem very satisfying, certainly to me as a member, to drive in here and try to glean - those are the types of questions, you know, yourself, that people are asking on the street, wondering how many workers are in the trenches. We don't have any recourse or anything, do we, as a committee, but to be just polite little MLAs?
MR. CHAIRMAN: Mr. Epstein, on the subject.
MR. EPSTEIN: Well, in fact, I think we do have some recourse. I think the basic rule is that witnesses can't refuse to answer questions. If they do refuse, they're risking being cited as being in contempt of the Legislature. Now we can't make that decision ourselves, I think it would have to go back to the Speaker and come before the House and whatnot. That's the risk they're taking. They simply can't refuse to answer questions.
What they can do is they can essentially beg the indulgence of the committee. Ultimately they're reliant on the good sense of the members of a committee of the Legislature. They can say various things like, I don't know the answer, if that happens to be the case; they can say things like, well, this is very sensitive, could we go in camera; they can
say, well, the answer is not simple, it's a long, complicated answer, can I take five minutes or 10 minutes to answer, which is kind of where Ms. Tower was going with her point today.
What she shouldn't say is what she did say, which is I really can't say that out of respect for the URB process. I think Mark Parent gave her the right answer, which is what about respect for this process. I think it was you, Mark, who said that. That's exactly correct. On the other hand - and we didn't push it - we didn't say, well, now we're going to cite you for contempt. Don't be ridiculous. What we did do is leave that answer on the record, and given that it was pretty well the first thing that was asked of the witness, essentially she chose to set a tone for her company, which wasn't a very transparent and open tone, and that was her choice. Too bad.
But the answer, the technical answer is, really, people can't refuse to answer questions once they're here. They can only rely on good sense. There are certain traditions that members of the House in any committee will generally not ask questions about matters that are before the criminal courts, but that's not a rule of law. If we wanted to, we could. It's just that generally everyone recognizes that it's not a good idea to do it, because it could prejudice a criminal trial. The same thing if there were a civil trial going on, there's no rule that prevents us from asking questions that might have bearing on a civil trial, but for the most part, you tend not to.
Ultimately, if we want to play hard with a witness, they can't refuse. That's my understanding. We can check with Legislative Counsel, but this question has come up in other committees, and that's the general tenor, as I understand it, of the rules.
MR. CHAIRMAN: I think on the subject, without going on at length, in this case if it was determined that the committee felt that it did not get the answers that should have been readily available, we certainly have the option of bringing them back. More importantly, the way I would see us, if we feel that they've avoided answers, I would even suggest that in inviting them back that we subject specific questions to them prior to that, so that when they arrive, there's not the opportunity to say, well, I don't have that information with me, or we've chosen to wait. I think there would be a duty on us to certainly give them every opportunity to bring that information here, rather than just expecting them to have all information there, which always leaves them with the ability to answer the way they did, to say we don't have that here with us.
Mr. Parent and Mr. Gaudet.
MR. PARENT: Just a question. We have judicial status, don't we, as a standing committee of the Legislature? We have the right to subpoena people, so we have some form of judicial power.
MR. CHAIRMAN: The right to subpoena and the right to make someone answer questions are two different rights. We can force them to come here, the question is of forcing answers and truthfulness is a bit more of the grey area that Mr. Epstein's touched on.
MR. PARENT: Because it was frustrating today. It was a blatant, I will not answer that question. There wasn't even any sort of, well, I don't know or I'll get back to you or anything like that, it was just - to Brooke's question - I won't answer that. I just thought, well, why am I sitting here. I got a little angry for myself, which I don't normally get. That seemed to me to be inexcusable.
MR. GAUDET: I was just curious, in terms of if it's a public servant who's appearing before this committee or someone from a private company, do the same rules apply? From my experience sitting on these committees, this is not the first time that private companies refused to provide this committee with answers, or previous committees. I'm just curious, what's allowed and not allowed?
MR. CHAIRMAN: Mr. Epstein, quickly, on the issue.
MR. EPSTEIN: I don't want to take too long. Virtually all these questions were looked at in a lot of detail through consultations with Gordon Hebb, Legislative Counsel, back in 1998 when the Public Accounts Committee was dealing with the Fiske matter. All kinds of questions about privilege and the rights of the members of the House came up and whether witnesses were going to be sworn and what the result was and whether they could claim lawyer confidentiality, and the answer basically is, none of that stuff applies. You can't say, as you normally could in court, well, this is a communication between myself and my lawyer, and lawyers can't refuse either, to say it's client confidentiality.
There are very broad powers that apply in terms of what people are required to answer. But the consequence for people is they're running the risk of being cited for contempt of the House, which I don't think a committee can decide on its own, I think it would have to go to the full House. There are lots of letters from Gordon Hebb on file that essentially lay this out in a lot of detail.
MR. CHAIRMAN: I think in the end one of the safeguards that we have when we've had displeasure with some of our witnesses, I think today the nightly news is going to address a lot of that and the company will subsequently bear responsibility for what took place today. The media is certainly there to help us in cases such as this where we haven't been provided with answers, and Nova Scotians will judge based on the nightly news tonight, whether the company did bring us answers.
Again, our final option is always to bring them back. I don't think the company is too interested in having too many appearances before us, as what they had today. So our ultimate
ability to make them account for not answering questions is to bring them back. Again, we know what the subpoena powers are on that issue.
Anyway, members, think about it. Next time we meet we can discuss that. They are certainly a big enough company and play a big enough role in the economic development of this province, so I have no problems in asking them to return, if necessary.
With that, we have our next two witnesses and we'll look at putting together an organizational meeting to set up a schedule, and with that, I thank members for their questions. We had a good session.
We stand adjourned.
[The committee adjourned at 3:39 p.m.]