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Nova Scotia to strip private utility of control over power grid access, appoints new energy regulator

By Electricity Today

In a significant overhaul of its energy management system, Nova Scotia is set to remove the private utility's control over access to the power grid. This move, announced by Natural Resources Minister Tory Rushton, comes in the wake of recommendations from the Clean Electricity Task Force. The aim is to foster a more competitive energy landscape and expedite the province's transition to renewable energy sources, with a specific goal to eliminate coal usage by 2030.

The transformation involves the establishment of two new entities: an independent operator for energy system planning and an independent energy regulator. This strategic pivot is encapsulated in the proposed Energy Modernization Act, which Minister Rushton plans to introduce in the forthcoming legislative session. The reorganization signals a decisive step towards meeting Nova Scotia's ambitious environmental and energy targets.

Nova Scotia Power, the current private entity managing the grid, will see its role significantly modified but will remain operational. The control over grid access will transition to an independent system operator. This change is designed to invigorate the market, especially crucial for reducing the province's reliance on coal, which presently accounts for about half of Nova Scotia's electricity generation.

Additionally, the existing Utility and Review Board will undergo a transformation, being renamed the Nova Scotia Regulatory and Appeals Board. This body will shift its focus away from energy-related matters, with its previous responsibilities now falling under the purview of the newly formed Nova Scotia Energy Board. This entity will oversee various sectors including electricity, natural gas, pipelines, regulation enforcement, and retail gasoline operations.

The recommendations stem from the work of the Clean Electricity Task Force, led by Alison Scott, a former deputy energy minister, and John MacIsaac, a former executive at Nalcor Energy. Tasked in April 2023, the group was charged with assessing the needs of the province's electrical system to align with Nova Scotia's environmental objectives. Minister Rushton has praised the task force's report for providing a "clear pathway" to achieving the 2030 renewable energy goals and beyond.

Implementing these changes is expected to take between 18 months and two years, with assurances from Minister Rushton that the transition will not result in job losses. Employees currently working for Nova Scotia Power or the Utility and Review Board will be offered equivalent positions within the new structure.

The task force's report emphasizes the benefits of shifting decision-making to an independent system operator, thereby boosting consumer confidence and ensuring decisions are made at arm's length from corporate interests. The report also highlights the limitations of the current Utility and Review Board, whose broad mandate is seen as a barrier to effectively managing the energy transition. It points to other Canadian provinces, such as Alberta, Ontario, and Quebec, which have adopted independent energy regulators.

Nova Scotia Power's president, Peter Gregg, has expressed support for these recommendations, viewing them as constructive steps towards the province's renewable energy future. He emphasized the importance of an independent regulator in advancing critical energy projects and the role of a new system operator in focusing on delivering reliable service and essential projects, such as grid-scale batteries and new interconnections with neighboring regions.

The report from the task force includes a total of 12 recommendations, among them the requirement for Nova Scotia Power to submit an annual asset management plan for regulatory approval and to produce dedicated reports on vegetation and wood pole management. It also suggests the government explore energy subsidy programs similar to those in Ontario to devise Nova Scotia-specific measures for residential electricity cost relief and to invest in upgrading the existing transmission grid infrastructure.

The projected costs for enhancing the transmission infrastructure, as estimated by engineering consultancy Stantec, are significant, with figures around $270 million for central and eastern Nova Scotia and $664 million for the western part of the province. Despite these financial considerations, the task force believes the long-term savings and benefits from switching to renewable energy sources, such as wind power, will outweigh the initial investments required to modernize the grid.

This comprehensive overhaul of Nova Scotia's energy system marks a pivotal moment in the province's journey towards a sustainable and clean energy future. By prioritizing independence, transparency, and innovation in its energy strategy, Nova Scotia sets a precedent for other regions aiming to transition away from fossil fuels and towards a greener, more resilient power infrastructure.

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