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Just as the world agrees to climate change action, NS Liberals impose huge cuts to solar power

How short-term energy-price politics prevent us from making real progress in the fight against climate change.

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On December 14, Minister of Energy Michel Samson stood before the legislature and introduced Bill 141 – Electricity Plan Implementation Act.

“Mr. Speaker,” he said, “I’m pleased to stand for a third time to speak about this important bill…The plan and this bill are built on the input and advice government received from over 1,300 Nova Scotians, experts, and interest groups…This bill clearly puts ratepayers first.”

The bill passed. Its focus is on freezing electricity rates for the next three years. Depending who you ask, it either fails to do so or does so at the expense of renewable energy and energy efficiency.

On the renewable energy side, Bill 141 makes three significant changes:

  1. Nova Scotia Power customers producing electricity and selling it back to the grid will be restricted to a 100-kilowatts capacity, instead of the previous one megawatt (or 1,000 kilowatts); 
  2. Nova Scotia Power will now set the rate (tariff) at which it buys back energy produced by customers above-and-beyond their own use, and will base this rate on its analysis of the net value of the electricity to the grid. Previously, NS Power paid for this energy at the same rate it charges its customers; 
  3. Nova Scotia Power will pay Efficiency Nova Scotia/Efficiency One “an amount not greater than” $34 million for its “cost-effective electricity efficiency and conservation activities” for 2019, roughly the same amount already set for 2016, 2017 and 2018. 

The first two of those changes have stirred the ire of some environmentalists and members of the opposition. Patrick Yancey, a board member of the nonprofit Antigonish Community Energy Co-op, has started a petition urging their reversal, which in four days has garnered 766 electronic signatures.

One of Yancey’s concerns is that community or institutional renewable energy projects over 100 kilowatts will be eliminated. On first reading of the bill, government proposed a 20-kilowatt limit, but after several speakers at the Law Amendments Committee complained, it was raised to 100.

Still, according to Wayne Groszko of the Ecology Action Centre, there are several municipal projects in the planning stages that are well over 100 kilowatts, some as much as 400. “The idea is you build a net-zero building; it produces as much electricity as it uses,” Groszko explains. “It’s tangible so people like that. But for larger buildings, this is no longer possible.”

He notes that in the Town of Berwick, a new 150-kilowatt municipal building is being planned. It’s possible in Berwick only because the municipality has its own electric commission and is not dependent on Nova Scotia Power. In King’s County, where a new municipal office building is also being planned, a net zero building is no longer possible.

The other concern is that if Nova Scotia Power determines a new rate at which it buys surplus renewable energy from households and institutional facilities, it will inevitably low-ball them. As Groszko wrote in a December 7 letter to the Law Amendments Committee: “[Nova Scotia Power is] unlikely to take into account the full socio-economic and  environmental benefits of the customer’s renewable energy contribution, and is likely to undervalue this electricity.”

This is of particular concern for Yancey, who is in the process of recruiting 100 building owners – be they households, businesses, churches, schools, hospitals or nonprofits – to sign up for a group buy of solar panels. “We’ve got 40 to 50 building assessments done and some are confirmed to participate,” Yancey says. “The group buy closes March 31. But this will spook people. How low will the rate go?”

When Yancey began signing up potential buyers, his math was based on Nova Scotia Power paying for surplus electricity at par, the same as it charges its customers.  These changes have impacted his pitch as he tries to convince people to take a risk as early adopters of solar power.

It will likely be harder for those considering solar panels on a home or business to justify the initial expense of buying solar panels based purely on the finances. Solar companies will face the same challenge convincing their customers.

So why would the government want to limit how much renewable energy building owners can generate?

“I’m not sure what’s going on here,” Yancey says. “It came out of the blue. We did not hear about it and our MLA is aware of us; we’ve met many times before. I would like to hear an argument for the restriction besides the fact it saves Nova Scotia Power money.”

The Department of Energy, in a statement issued to the Halifax Examiner by communications person Bruce Nunn, stops short of explaining the need for a cap, but says that 100 kw “is more than enough to meet the needs of individual homes and most businesses…The department’s review of the program demonstrated the average net-metering installation to date has been about 5 kw with only one solar PV project above 30 kw.”

Opposition on Both Sides Critical of Bill 141

Several opposition MLAs agree with Yancey’s assessment that Bill 141 is written to please Nova Scotia Power. Many of the speakers opposing the bill accused the Liberal government of breaking its election promise to end Nova Scotia Power’s monopoly.

A few MLAs, mostly from the NDP, have criticized Stephen McNeil’s party for cancelling the COMFIT program in August, and likened changes in Bill 141 to those changes. COMFIT guaranteed a sustainable fee to renewable energy companies capable of 125 megawatts of production. The Liberals cut it to prevent increase in Nova Scotia Power’s rates.

Bill 141 is again all about maintaining electric rates, and even here the NDP and PC parties both accused the Liberals of only pretending to freeze rates, leaving Nova Scotia Power far too much wiggle room. “In three years there is a very high probability that those electricity rates will double, quadruple, and people are going to be devastated,” NDP MLA Denise Peterson-Rafuse said to the legislature.

All three political parties strongly espouse the importance of keeping prices low. The Department of Energy stresses that Bill 141 is about enabling “some homes and small businesses to increase their use of renewable sources for electricity with minimal impact on other rate payers while also helping the department to understand how solar PV impacts the rest of the electricity system.” In other words, ensuring prices aren’t driven upward.

“It’s cleaner, it’s greener, but it costs more,” Peterson-Rafuse said. “We’re on track for the renewable target that was set by the NDP, but [the Liberals] don’t want to push it any harder because if they do that, it will have an effect on costs in terms of electricity.”

PC MLA Karla MacFarlane [http://nslegislature.ca/index.php/people/members/karla_macfarlane] also criticized the government for its failure to consult, contrary to Samson’s claim to have received advice from thousands of Nova Scotians. “There was no notification given to those affected organizations, groups, businesses about these colossal changes that will have a negative impact on projects, as well as community energy planning processes.”

In its statement, the Department of Energy refers to its Electricity System Review going back to 2013.

COMFIT-Lite

The Ecology Action Centre’s Wayne Groszko was one of those raising concerns to the Law Amendments Committee (along with Babak Farsi from Doctor Solar and Barry Zwicker from Scotian Renewables). They scored a significant victory for solar energy, at the very least, in changing the new limit from 20 kilowatts to 100 kilowatts, restoring some of what was lost.

“This severe decrease would exclude significant net metered renewable electricity projects by a wide range of communities and organizations, including Mi’kmaq communities, municipalities, universities, volunteer fire departments, non-profit organizations, churches, and small-to-medium enterprises,” Groszko wrote in a December 7 letter.

He also noted that “the intention to make these specific changes to the rules regarding net metering was not mentioned in the publicly-available reports on the new electricity plan.”

Groszko says that most of the solar projects should still work with a 100-kilowatt limit, but wind power projects may suffer more. “A hundred kilowatts is common with wind power,” he says. “If an industrial operation, like a factory, wanted to put up a wind turbine it would be a no-go.”

Still, the situation would have been much worse with a 20 kilowatt limit, which would have eliminated even small-scale projects. “The Wolfville Farmer’s Market would have capacity for a 30-40 kilowatt solar installation, for example,” Groszko says. “The number seemed arbitrary.”

But in talking with MLAs since the third reading, Groszko has ascertained a clearer picture. “They are planning to put out a call for proposals from community groups and solar companies,” he says.

Community facilities would work with solar companies to put in proposals for generating and selling electricity. Successful applicants chosen by a third party would receive a 20-year contract with Nova Scotia Power at a set price for the electricity they generate. COMFIT-Lite, you might call it. The province would then monitor production.

“I’m not viewing this as a disaster,” Groszko says. “They want to control the increase in solar for now.”

As per the government’s Nova Scotia’s Electricity Future documents, the goal is to prevent anything beyond a marginal increase in the cost of electricity. But Groszko expects solar energy to continue growing, possible quadrupling within three years.

“We’re willing to try this approach,” he says. “But then there needs to be a proper debate. It will be a huge undertaking in 2018 to set our solar future.”

Paying for Efficiency

According to Groszko and many other energy experts, one of the most significant reductions we can make in our energy footprint comes from being more efficient in how we use it. That means shoring up the building envelopes in our homes, schools, workplaces, churches etc. so we don’t heat [or light up] the great outdoors, as dear old dad liked to say. It also means using more energy-efficient appliances and machinery and being generally more conscious of waste. Those changes happen en masse with proper education, energy audits and support for those wanting to make them.

It so happens that improved efficiency is also the easiest and best way to save money. “It has a bigger financial impact than lowering the rate,” says Groszko. “Rates in Germany are considerably higher than here but the average household bill is lower.”

Yet, under Bill 141, efficiency too is seen more as a cost burden than a way to help Nova Scotia Power’s beleaguered customers stay warm and fed at the same damn time, long term. Nova Scotia Power will spend a maximum of $34 million on energy efficiency programs in 2019.

Earlier this year, Efficiency NS conducted a comprehensive efficiency study with the help of a US consulting firm called Synapse Energy Economics, and found that the most cost-effective investment in energy efficiency programs was between $57 million and $113 million, with $76 million being a reasonable mid-level target.

Nova Scotia Power had originally submitted an electricity plan that would spend much less. The Utility & Review Board (UARB) instructed Nova Scotia Power to rewrite the plan using the Synapse numbers, which made their way into Nova Scotia Power’s 2014 Integrated Resource Plan. In its unusually scathing letter to Nova Scotia Power, the UARB states that, in its focus on short-term pricing, NSPI “adopted a course of action which could be significantly more expensive for ratepayers over the long term.”

What is disturbing, besides the low-ball figure of just $34 million (or less), is that it comes directly from the Province in Bill 141, rather than via a proper hearing at the UARB. All this runs counter to the Liberal’s own 2014 energy efficiency plan, which states:

A franchise will be created that sells long-term energy savings in direct competition with energy supply options and will operate under the brand ‘Efficiency Nova Scotia.

Rather than compete with Nova Scotia Power, free-market style, Efficiency Nova Scotia is forced to operate on minimal budgets in a government effort to freeze energy rates for the short-term. The long-term thinking being used at the United Nations Conference of the Parties in Paris doesn’t come into play here.

The current Liberal government seems content that it is on pace to meet previous NDP targets. “With other projects coming on line, including the Maritime Link, we expect to meet the 2020 legislated target of 40 percent renewables,” the Department of Energy’s statement says.

“The targets are out of date,” says Wayne Groszko. “They need to be improved. We need to see coal-fired power phased out.”

This is how short-term energy-price politics prevent us from making real progress in the fight against climate change.

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