HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

ECONOMIC DEVELOPMENT COMMITTEE

Mr. Keith Colwell (Chairman)

Hon. Ronald Chisholm

Mr. Keith Bain

Mr. Chuck Porter

Mr. Clarrie MacKinnon

Ms. Vicki Conrad

Mr. Leonard Preyra

Ms. Diana Whalen

Mr. Harold Theriault

[Ms. Diana Whalen was replaced by Mr. Stephen McNeil.]

In Attendance:

Ms. Jana Hodgson

Legislative Committee Clerk

WITNESS

Nova Scotia Power

Mr. Rob Bennett

President & CEO

HALIFAX, TUESDAY, FEBRUARY 10, 2009

STANDING COMMITTEE ON ECONOMIC DEVELOPMENT

9:00 A.M.

CHAIRMAN

Mr. Keith Colwell

MR. CHAIRMAN: I'm going to call the meeting to order. I'm going to start with the introduction of the members.

[The committee members introduced themselves.]

MR. CHAIRMAN: Good morning, I'd like to welcome our guests from Nova Scotia Power here this morning and I'd like to get you to introduce yourselves and any of your staff who may be speaking, if there's anyone else who is going to be speaking.

MR. ROB BENNETT: Good morning, Mr. Chairman, and members of the committee. My name is Rob Bennett, I'm President of Nova Scotia Power and I will be the only one addressing the committee this morning.

MR. CHAIRMAN: Thank you very much. We can start off then with your presentation - I assume you have a presentation.

MR. BENNETT: Wonderful, thank you and good morning. I've taken my jacket off, I find it a bit warm in here. I hope that everyone finds that appropriate.

This is my first opportunity to appear before a legislative committee as president and CEO of our company. I appreciate the opportunity to speak about Nova Scotia Power and to answer any questions that you may have this morning.

I do appreciate that committee members may have questions concerning our 2008 year-end financial results or our performance in the most recent quarter. Our quarterly financial results will be reported by our parent company, Emera, this Friday afternoon. As Emera is traded on the Toronto Stock Exchange and we are governed by securities regulations, I am not in a position to provide information concerning our financial performance prior to Friday, until the results of our 2008 year are released at the end of the week. I apologize for any inconvenience and I would be very happy to return and appear before the board and answer any questions on our 2008 financial performance after Friday, or to provide any follow-up information on our financial performance that the committee may need.

I've been in my current role for about six months and I've spent much of that time thinking about where we've come from, where we are today and where we need to be, as a company. I speak to you as a native Nova Scotian and as someone who has spent most of his career at Nova Scotia Power. I'm sure that shapes the views that I have of the role of Nova Scotia Power in the province and I would sum it up with three main points:

I want Nova Scotia Power to inject money into the local economy by spending more of its fuel dollars here in Nova Scotia. I want to see improvements in the reliability of our power system and I want our company to make a positive contribution in each and every community where we serve, to enable the work done by more than 1,500 employees who I have the privilege to lead each day.

I was asked here to talk about the integrated resource plan, although I understand that there are other issues that could be on the minds of committee members. Our history is part of the context for any discussion that we might have about the future. Today we primarily use fossil fuels to make electricity. Public policy decisions made more than 30 years ago, in response to another time of uncertainty in world fuel prices, prompted us to use local coal as the main fuel source instead of foreign oil. Those were good decisions, based on those times, and the power plants that were built then have provided good value for our customers over the years, but the times are changing and we need to change as well.

We expect, and our customers expect, that our future includes electrical generation from fuels that are much more sustainable and renewable, with lower emissions and more focus on energy efficiency and conservation.

The integrated resource plan is a very detailed document that looks at various possible scenarios about our energy future. This came out of a collaborative effort involving many of our key stakeholders. It was designed to provide analysis in the short, medium and long term about choices we have regarding electricity generation. Many factors were part of that analysis, including fuel prices, potential environmental regulations, the potential for conservation and energy efficiency, technology choices to reduce emissions, and alternate forms of energy.

The integrated resource plan development process has helped guide the company and our regulator in terms of new and future projects, some of which I would like to highlight for this committee, starting with our waste heat recovery project at Tufts Cove. This project has two key parts. In the first part we are retrofitting our LM 6000s, which are essentially jet engines that are used to generate electricity. We are renovating those units to recover heat from their stacks and turn that energy into electricity, effectively squeezing more energy out of the same amount of fuel.

The second part is duct firing, which takes advantage of the current machines and the fact that they are set up to create quick response generation. They will be especially valuable when we try to coordinate with wind energy, which is intermittent. The project will be completed later this year and it is an $84.3 million project.

The Trenton bag house and generator replacement project is also aligned with the integrated resource plan. We broke ground last year for this $46 million project. The bag house will allow greater fuel flexibility and has the added benefit of reducing ash from the stack; $10 million from this project is being injected directly into the Pictou County economy.

We have recently asked our regulator for approval of a mercury reduction project. The goal is to reduce mercury emissions by 60 per cent between now and 2010. This would be achieved by an innovative process to absorb mercury before it leaves the generating stations at Lingan, Point Tupper and Trenton.

As you know, we have contracts with six independent power producers for seven wind farms, with a total installed capacity of 246 megawatts. The global economic crisis has created challenges for those wind producers, challenges facing wind projects throughout North America and elsewhere in the world.

The message I want to leave with members of this committee is that we should make every effort to help those projects succeed. If we are required to renegotiate contracts or reissue a formal solicitation, I expect prices for Nova Scotian customers to be higher than those in the long-term contracts that we have in place today.

We also have issued two requests for proposal for independent producers to provide electricity from biomass and smaller community-based energy projects, including wind. In total we hope to secure more than 30 megawatts from this process, which started with extensive consultations with biomass suppliers and producers. I am pleased to advise that interest in this process has been very strong.

I believe that biomass holds tremendous potential for Nova Scotia. Today our province actually exports biomass in the form of wood pellets, to generate electricity in Europe. We have conducted tests at one of our generating stations and we believe biomass

can be co-fired in our coal plants. The idea is to replace some of the money that we use to buy foreign coal and inject it into the local economy.

Some of the coal that we import today comes from the southern United States, Columbia and elsewhere in the south. We import coal in order to meet our environmental regulations for sulphur emissions at our coal plants. In my mind this biomass opportunity creates tremendous potential for Nova Scotia's future energy plan.

Improvements in our provincial and regional transmission infrastructure are critical. I oversaw the construction of the Northeast Reliability Interconnect in Maine, which is a transmission line connecting New Brunswick to markets in New England. At the time it was the biggest construction project in the State of Maine and it provided a boon to every small community which it passed through.

Everyone in this region is working on renewable or greener electricity solutions. For all of us to benefit from each other's solutions, we need to strengthen our transmission links internally and with our neighbours, and in this way transmission really is very much an environmentally friendly and green project. For example, the Northeast Reliability Interconnect transmission project in northern New England made the system much more efficient, saving the equivalent of 20 megawatts of power, or a 20-megawatt power plant running around the clock. Investments in the transmission system in Nova Scotia and ties to our neighbours will bring the same scale of efficiency and reliability benefits to Nova Scotia. New transmission is essential to maximize our potential for new wind generation in the province.

As we all know, tidal energy is another opportunity. Nova Scotia Power's in-stream tidal power project is on target. This year we will deploy a 10-metre turbine with our partner, OpenHydro, in the Minas Passage. We will test the turbine for two years, to help us determine the potential for in-stream tidal that exists in our own backyard.

I would also like to point out that OpenHydro currently has a request for proposal to shipyards and fabricators in Nova Scotia to build the 400-ton gravity base for that test turbine. This work will be done in Nova Scotia.

We are working closely with Minas Basin Pulp and Power, which is responsible for building the tidal test facility, as well as the work that we are doing with the province to move this project ahead. We continue to believe that Nova Scotia is in a position to be a leader in tidal technology. This technology is developing quickly, so it is important that we move quickly.

[9:15 a.m.]

I'd also like to take a moment to speak about reliability. Nova Scotia Power employees have impressed upon me how generous our customers were to them as they restored power during the holiday season - I want to acknowledge that, it was deeply appreciated. The Christmas and New Year's storms and related outages caused an inconvenience to our customers, in particular because of the time of year. We know that, I know that and we regret the inconvenience that our customers faced during that time.

Mr. Chairman, we have been looking at this issue. We were on track with improving reliability through the 1990s, until Hurricane Juan earlier this decade. However, we recognize that over the last few years, on average, customers have experienced more frequent outages and lengthier outages, compared to the previous dozen years. This is primarily due to more severe weather, especially storms with sustained winds in excess of 90 kilometres per hour. The most significant outage-related issue in these storms is trees making contact with power lines. Excluding major weather events, such as tropical storm Noel in 2007, or the most recent Christmas storm where winds were gusting to hurricane force, Nova Scotia Power's reliability performance is on par with other Atlantic Canadian utilities. We saw this in 2006 when there were no major weather events in this province that created outages.

That said, we know that our customers want us to improve and our goal is to improve reliability. Tree-trimming and removal of trouble trees has an immediate and obvious payoff. We will spend $10.4 million this year on tree removal. That's more than double what we were spending just six years ago on tree programs.

We're also developing a five-year plan to improve reliability and we intend to improve our customers' experience in system reliability overall. We will make investments in storm hardening - strategic investments in areas of the province that are particularly vulnerable to severe weather, especially high winds - and we will update equipment, as necessary, to enable better performance.

We currently spend about $50 million each year maintaining our network of poles and wires, including expansion of the system into new areas. Another $10 million is spent each year replacing lightning arresters, insulators and other equipment to eliminate problems from wear and tear on the system. I believe an additional $20 million per year in capital expenditures would make a significant difference in our reliability performance. Nova Scotia Power will bring forward a formal proposal to our regulator this year in that regard.

In conclusion, Mr. Chairman, I want our company to contribute to the success of the province by making sure we buy Nova Scotian whenever we can. We are focused on improving our customers' experience during severe weather and we believe that severe weather will continue to cause us problems in the future, so we will be prepared. We want

to make a positive impact in each and every community where our employees work and live. Thank you.

MR. CHAIRMAN: Thank you very much. Mr. McNeil.

MR. STEPHEN MCNEIL: Thanks very much, Mr. Bennett, for being here today to talk about an issue which is near and dear to the hearts of many Nova Scotians. One of the issues that I've been talking about a great deal as I travel around Nova Scotia is an energy corridor that would connect Atlantic Canada and allow us to bring on-line at the same time the renewable energy issues, not only here in the Bay of Fundy but also the Lower Churchill.

It has been reported that Emera is in conversations now with the Province of Newfoundland and Labrador about the Lower Churchill so I'm wondering, is it Emera who is actually in negotiations or is it Nova Scotia Power?

MR. BENNETT: It's actually a combination of companies including Emera, but primarily between Nova Scotia Power and Newfoundland and Labrador Hydro.

MR. MCNEIL: So are you yourself involved in those negotiations?

MR. BENNETT: Yes, I have been.

MR. MCNEIL: Has anyone from the province been involved in that conversation? When I say the province, I mean the Government of Nova Scotia.

MR. BENNETT: I know that the Government of Nova Scotia has met with the Government of Newfoundland and Labrador, talking about this province approximately a year ago.

MR. MCNEIL: Have they been in contact with your company to provide support, any kind of solution, to help make sure that Nova Scotia and Atlantic Canada become connected, making sure that we have access to the Lower Churchill?

MR. BENNETT: They've certainly provided guidance in the form of the energy strategy work that has been going on in government, to make clear that imports of energy from clean, renewable sources will need to be considered as part of our energy future.

MR. MCNEIL: Short of the glossy words and all of that, what concrete steps has the Government of Nova Scotia done to assist Nova Scotia Power to ensure that the Lower Churchill arrives here in Nova Scotia?

MR. BENNETT: Well, at this point, the work that's going on is primarily engineering infrastructure assessment work at quite a technical level. I'm not sure what role the

government has in that part of the process, but we do certainly keep people informed of how things are moving ahead and we update our team regularly on our progress.

MR. MCNEIL: Would it be your view that it's too technical for the Department of Energy?

MR. BENNETT: No.

MR. MCNEIL: So why would the Province of Nova Scotia, the Department of Energy, not want to make sure that the people of Nova Scotia had access to the Lower Churchill and to assist the private entity - Nova Scotia Power - in making sure that we were connected to the Lower Churchill and Nova Scotians had access to stable, secure energy in the long run?

MR. BENNETT: Well, again, I can only speak to the work that we've been doing in Nova Scotia Power and, to some extent, within Emera on these projects. The work has been of an assessment nature, where we've spent time - we've entered into a memorandum of understanding with Newfoundland and Labrador Hydro to perform joint engineering studies and provide a proper assessment, from a business perspective, on whether it made technical economic sense to extend the line from Newfoundland and Labrador to Nova Scotia. That has really been the extent of our company's work on this.

MR. MCNEIL: When the Government of Nova Scotia met with the Government of Newfoundland and Labrador a year ago, did they brief your company on the results of those conversations?

MR. BENNETT: I was at the meeting. I attended a meeting with Minister Dunderdale in Newfoundland and Labrador approximately a year ago.

MR. MCNEIL: And who was there from the Province of Nova Scotia?

MR. BENNETT: The Minister of Energy and folks from the Energy Department.

MR. MCNEIL: So was it a meeting that you led or was it a meeting that the Department of Energy led?

MR. BENNETT: It was a meeting led by the Department of Energy.

MR. MCNEIL: Has there been any indication that the Premier's Office has at all been involved in this?

MR. BENNETT: Well, again, we've been working on this project from a business perspective and spending time with the business leaders in Newfoundland and Labrador, and

my attendance at meetings has been primarily driven by invitation from government to attend and participate in whatever way we could.

MR. MCNEIL: More recently, you heard the government announce its renewable energy strategy, they just talked about it - it's probably been about two weeks ago now. There was the issue of hard caps on greenhouse gas emissions. There was a lot of discussion around that because they were very vague until they had negotiations coming up with Nova Scotia Power. Can you tell me if they've contacted you yet about whether or not you would agree to their caps or not?

MR. BENNETT: We've worked, of course, on the response to the energy strategy, as requested last year; a formal response was provided. We've worked through that process. We've certainly provided information and technical data to the various departments, as requested, to support their decision making and policy development.

MR. MCNEIL: Why do you think the government, who was a year delayed in terms of bringing out their energy strategy, came forward and said, well, more conversations have to take place with Nova Scotia Power before we can determine what those hard caps were? Why would they have not, in that year, been able to negotiate with you or tell you, quite frankly, what those caps would be to protect the environment of Nova Scotia and then you would have operated in that environment? Why would they have come and said to the people of Nova Scotia, well, we get further negotiations?

MR. BENNETT: Again, it is our role to comply with the regulations as they're set by government, and that's exactly how I see us fitting into this equation. We're happy to know what the objectives are so that we can make our appropriate plans through processes like the integrated resource plan. We certainly play a role in providing the technical data and alternatives to achieve those plans, which we've provided all along. But in terms of strategy or decision making on the plans themselves, we don't participate in that.

MR. MCNEIL: In the previous year, before they rolled out their strategy, did the Government of Nova Scotia come to you with hard caps and you say no, we can't comply by those? Or did . . .

MR. BENNETT: No, we work at all levels with regulations, federally and provincially. Our role, again, is to comply with the regulations as they're set forward.

We understand the implications of hard caps. We believe that a hard-cap process makes sense because it creates real reductions in carbon dioxide emissions or sulphur dioxide emissions, and we're certainly prepared to meet that challenge.

MR. MCNEIL: But did the Government of Nova Scotia come to you with a hard cap and Nova Scotia Power said no, we can't meet that target, we need to negotiate further?

MR. BENNETT: Not that I'm aware of, no.

MR. MCNEIL: Why do you believe the province, then, would be wanting to negotiate with you to determine what the hard caps were? In your experience, do they not have a vision of where they want to go? Do they not have an idea of where they want to reduce the greenhouse gases, or are they going to leave that up to Nova Scotia Power to set that agenda for the province?

MR. BENNETT: Again, our role as a business is to provide information to allow appropriate decision making by government and for us to comply with the regulations as they are set. That has been the extent of our involvement in the process - providing information and helping people understand the technical capabilities that exist with modern technology.

MR. MCNEIL: In the information that you provided to the Nova Scotia Government, did you say that this is the cap we could live with?

MR. BENNETT: Not that I'm aware of, no. We understand that the caps were based, or the objectives were based, on reducing carbon dioxide emissions, for example, to 10 per cent below 1990 levels. We understand explicitly what our emissions are and we have a general understanding of what emissions are in other components of the economy of Nova Scotia. In that regard we are able to ascertain what our objectives are likely to be, but we're still not yet completely certain of what the objectives will be that will be set for Nova Scotia Power.

MR. MCNEIL: You had talked about more recently the issue of the Bay of Fundy and the fact that project is moving forward, that you will have a prototype in the water ready to go and we're in the process of that now. Do you believe we have the capability within our transmission system to move that energy if we can harness it?

MR. BENNETT: There will be two challenges. If we are able to harness all of the energy potential from the Bay of Fundy, one challenge will be the intermittent nature of that energy because these machines generate on the coming and going of the tide, but they're not a steady output. For that reason we will have to have other generation sources or energy storage sources on our network to fill in the gaps so to speak. Secondly, moving that energy around the province, as I mentioned earlier in my presentation, will be a challenge for us with today's infrastructure. To efficiently move large blocks of energy around our province or around our region, we do need to make critical investments in transmission infrastructure.

MR. MCNEIL: I read with interest an article that was in The ChronicleHerald this weekend around you wanting to put together a $100 million, five-year plan to improve reliability. Who's going to pay for that?

MR. BENNETT: Obviously, we've been thinking a lot of reliability and looking at what we can do to improve. As we look at opportunities for accelerated equipment replacement programs, or the installation of redundant systems or better technology controls, we realize that those investments will be required to go in the rate base of the company. Therefore, as we've mentioned, we will be looking for the support of our regulator and our customers to support us in making those investments.

MR. MCNEIL: So Nova Scotians will be paying for it?

[9:30 a.m.]

MR. BENNETT: Like all energy infrastructure in a regulated utility, the investment, the assets go into rate base and are recovered through rates.

MR. MCNEIL: One of the interesting issues that you're hearing around and one of the things that has been consistent about Nova Scotia Power over the last number of years is the amount of money it sends to Emera, which is approximately $100 million annually. I think you legislated that you can earn up to and transfer 9.6, I think it is - is that correct? - somewhere in that general vicinity, somewhere around $100 million. Consistently we've met that target, your company has met that target to be able to hand over $100 million to Emera. As you look at some of the reports, there is some suggestion, and I believe it could be rightfully so, that has been at the expense of the transmission system, that has been at the expense of deferred maintenance.

So what we've done, in actual fact, is we've denied Nova Scotians the ability to have a reliable transmission system internally, and at the same time we're consistently handing over $100 million to Emera to invest in Bangor Hydro, in St. Lucia, wherever they determine possible to invest that money, at the expense of Nova Scotians.

Now we're going to go to Nova Scotians, we're going to go to the URB this year and say, we have a $100 million plan to fix the reliability of this system, but sorry, we want you to pay for that as individual ratepayers. How can we justify that to Nova Scotians? How is any reasonable person going to be able to look at that and say, that's fair, that over the last five years the reliability of infrastructure has been going down and at the same time we've consistently handed over $100 million to Emera to invest wherever they choose and now as we go forward over the next five years we're going to ask you, as Nova Scotians, to dig deeper into your pocket to ante up more money so that we can fix the stuff we didn't do for the last five years. How do we sell that to people? How do we convince Nova Scotians that's the right thing to do?

MR. BENNETT: Respectfully, I cannot accept that premise. The fact is that Nova Scotia Power is a regulated utility, which means we are regulated on our rate of return on assets which, in fact, in 2008 is 9.35 per cent on assets in the rate base. What that means is

those decisions are made by our regulator in the interests of our customers to ensure that the company can secure the financing, the capital necessary to maintain and improve the power system. In fact, over a number of the last few years Nova Scotia Power has, in fact, under-earned on its rate of return and that has been reported in our annual reports in several of the past years and we can provide that information directly to the committee. We do not, in fact, have a strong history of earning more than our allowed rate of return at all.

MR. CHAIRMAN: Order. The time has expired. Mr. MacKinnon.

MR. CLARRIE MACKINNON: Thank you very much, Mr. Chairman, it's a pleasure to have Mr. Bennett with us here today. I would like to point out to the committee that every time I go out in the East River Valley in Pictou East, I hear very favourable words about a young man from Sunnybrae who has worked his way up to be the president and CEO of this company. Having said that, I'm not going to follow up on the cap scenario, what I want to talk about is reliability.

As a rural MLA I'm very concerned about reliability and one of the things that you talked about was tree contact. I believe that one of the fundamental failings is the fact that lots of times we have cutting that takes place and it's only the tops of the trees that are removed and growth comes back up very, very quickly and we have contact again. I would hope that there's going to be a considerable expenditure in that area.

MR. BENNETT: Yes, in fact, there are many different methods that are employed in vegetation management to appropriately remove trees. In many cases our chosen course of action is complete removal of the tree and in many cases we would hope to even widen rights-of-way beyond the - effectively, 10 feet on either side of the line is the historical right-of-way distance and our modern standard is 20 feet. We try to secure rights to remove all of the trees within that 20-foot area, but there are places where people are concerned about the full removal of their ornamental trees in particular. In more urban areas there are challenges with removing large trees, so it continues to be a challenge for us. Certainly, the objective is to invest more and remove more trees, which undoubtedly will improve the reliability of the system.

MR. MACKINNON: So we can be assured that there will be more person power directed to that?

MR. BENNETT: In the last number of years we've been spending $6 million or $7 million a year on vegetation removal. Last year we spent about $9 million and this year we will spend $10.4 million, so we're increasing that spending significantly.

MR. MACKINNON: In shore areas - for example, Merigomish, Lismore Shore and so on - lots of times there seem to be more incidents throughout the province in relation to salt spray than ever before. How do we address that?

MR. BENNETT: There are challenges with a coastal utility concerning what we refer to as salt contamination or salt spray on insulators and interestingly, it can even happen quite far inland given certain weather conditions. We deal with the issue by using the best technology that we can find to install in areas that are prone to salt contamination, and we've done that across the province. But no technology is perfect and when the conditions are particularly bad we do experience difficulties. We'll be redoubling our efforts in that area and trying the most recent developments in insulator equipment that might be able to help alleviate that problem.

MR. MACKINNON: One of the concerns, Mr. Chairman, that I have raised in the past has been in relation to Nova Scotia wood pellets firing a generating station, for example, in Sweden and excess heat by-product, hot water, heating some of the homes in the community. In Pictou County, at Trenton, we actually have - and I've said it I think probably in this committee room - some excess heat going into the East River that keeps a flock of ducks around for the winter in this warmer area. Are we going to catch up with some of these other countries some day?

MR. BENNETT: Well, yes, in fact, we do take advantage of opportunities for cogeneration and district heat where we can, where it makes economic sense. In fact, at our facility in Trenton, there is a district heat or waste heat recycling process that exists between our Trenton generating facility and the former TrentonWorks. There is a steam line that provides heat and processed steam to that facility. So, again, it usually comes to the economics of where the plant is located in proximity to homes or businesses that might be able to use waste heat and we explore every opportunity that comes forward that might help us improve the overall efficiency of our network.

MR. MACKINNON: Mr. Chairman, I certainly have been aware of the situation with TrentonWorks and I think some of that actually goes to Nova Forge which is currently operating. I believe it goes that far, doesn't it? However, the fact is that there is still excess there and certainly with TrentonWorks idle, we do have a situation that could be addressed.

One of the things that has concerned a lot of people is the fact you mentioned Colombian coal and some people refer to that as blood coal. I know you can't have a great social impact on foreign countries, but is there anything you can do to have any minor influence on where your coal comes from and how the labour is supplied?

MR. BENNETT: We do take responsibility in terms of ensuring that all of our fuel supplies come from responsible business operators in all of the countries that they operate in. We visit the facilities from time to time, we check on various records of performance of the companies that we deal with and we've also had the opportunity to view reports that have been provided by the president of the University of Cape Breton, who has assessed that particular facility. We have recently become aware that there have been advancements made

in terms of the relationships in the communities at the particular mine that you're speaking of, so things are moving ahead there.

Yes, we are paying attention and obviously we want to make sure that we're making the best impact possible when we buy our products. As I mentioned earlier, what's most important to me is redirecting that fuel spend, as much of it as we can, from foreign fuel purchases to purchases within Nova Scotia - primarily biomass - or additional infrastructure development in renewable projects like wind or tidal.

MR. MACKINNON: Mr. Chairman, I'm a very strong supporter of clean energy and wind power is something that I've been working with Shear Wind on and trying to look after local concerns as well. Besides the 30 turbines that they're currently looking at in my constituency, there's also another area in the East River Valley and it's a distance from the substation. One farmer, for example, has 1,200 acres there and a lot of it is in blueberries and those blueberries will grow very well with wind turbines around them, no houses. How can we ensure that the return is significant enough to the independent suppliers so that some of these projects will, in fact, come to fruition?

MR. BENNETT: I believe I know the farm you speak of in the East River Valley very, very well, as I believe I worked there many years as a teenager, scooping those blueberries at that time.

The process that we've followed for wind development in the province has really been focused on a competitive solicitation process. We think that brings the best value to Nova Scotian customers and so far, the response has been vibrant. There have been adequate projects brought forward in response to all of our RFPs to date and I believe that projects like the one which you are speaking of, that exist in a good wind regime, would have appropriate community support and that are reasonably proximate to transmission infrastructure, have a good chance of being accepted in those competitive processes and winning a bid with us.

MR. MACKINNON: Incidentally, that blueberry farmer is also a dairy farmer but he says that you were an outstanding young worker, so that's a little bouquet at least for you today.

MR. BENNETT: I appreciate that.

MR. MACKINNON: The bag house at Trenton - some people think that's moving too slowly. What's the time frame there? That's a major expenditure, something in the order of $45 million.

MR. BENNETT: It is; it's a significant improvement to the plant. The bag house will allow us to use more flexible fuels, which will help us reduce the cost of the fuels that we use in that facility.

There's additional work going on as well with the replacement of the Unit 5 generator, so it's a significant project with a lot of technical challenges but it is on target. A lot of the work is being done by contractors who are actually local in Trenton.

MR. MACKINNON: My time is probably getting relatively short but I would like to just mention, never before have there been so many social concerns in relationship to disconnections and so on, particularly in areas of the province where the economy is not doing well and increasing numbers of people come forward who, very legitimately, cannot pay their full bills.

I would just like to point out that your person that I deal with very, very frequently - and I will mention the name - Ken Paruch who has been most cooperative and very understanding, from a social perspective. I think he should be commended publicly for the work that he does almost on a weekly basis with us, sometimes on a daily basis because there are a lot of social problems that are occurring.

[9:45 a.m.]

There was some talk at one time in relationship to some kind of a break for those who are - that there's no trickle-down for whatsoever in relationship to power. I mean we certainly lost the 8 per cent that was so important to all Nova Scotians in relationship to the tax end of things, so is there any consideration ever to looking at something at the lower spectrums in relationship to some kind of a break? I don't know how it would be done but there was talk at one time.

MR. BENNETT: Well, first, thank you for the comments on Ken. He is, like many of our employees, doing the best job that he can to serve our customers and we're very proud of the work that he is doing in our community.

We recognize that there are challenges for many people in hard economic times and our staff is there to work with people to help make arrangements so that people can sustain their supply. I'd also like to make sure that the committee understands that we do not disconnect electricity for customers during times of the year like this, that could be damaging for their homes or endanger them in any way.

With that said, considerations have been given by our regulator in regard to a low- income subsidy program or some other support for lower income customers. That's really a regulatory decision, a regulatory policy decision and to date the decision, in accordance with the laws of Nova Scotia, has been that that's not an appropriate course of action for utility rate-making.

MR. CHAIRMAN: Order. Mr. Porter.

MR. CHUCK PORTER: Thank you, Mr. Chairman. Welcome this morning, thank you for being here. I have a number of questions and I probably won't have time to get them all in.

I'll start with - what I want to say, I guess - staff who work in our area, the folks on the lines and so on, we know most of them quite well. We work closely with them and they're doing a great job for what they can get done in the run of any day. We certainly would have nothing but good things to say about the staff on the streets who are doing the work.

At the same time, the perception from where I come from in the Valley - around the Windsor area and so on - is basically, we're paying an awful lot of money for power and the only thing they see is Nova Scotia Power and Emera and the executives and the shareholders being looked after from a financial perspective. They don't see the benefits. What they see is, no maintenance for I don't know how many years.

Trees were mentioned here as one example and we see trees getting cut and a little bit of maintenance being done to them - a branch here and a branch there - and when they leave, it's quite a mess. So, of course, our phone rings and people say, what are these guys doing out here, they lop a tree branch off here and lop a branch off there. They're not, in fact, taking the entire tree down because the customers are asking, why aren't you cutting the tree down? Well, that's not our job. There they are, left with an awful mess and maybe a $500 or $1,000 expenditure to get the rest of the tree trimmed up safely, with an appropriate company.

So people aren't all that excited, I'll be honest - no disrespect to you, Mr. Bennett - people aren't all that excited about what they pay for the rates in this province to Nova Scotia Power. They're not excited.

I know that Minister Scott went before the URB with regard to your increases. We read lots of articles in the paper, we go to the coffee shops and we talk to people and we get what they really think. Now, they may not know all the facts that you brought out this morning - what it costs, what you're doing, the plans you have for the future - there's not a lot of that out there. They probably don't know that all your fuel dollars aren't spent in Nova Scotia, so I'd ask, why is it that all your fuel dollars aren't spent in Nova Scotia? You talked about spending more of those. They probably don't know how much money gets moved to Emera. They probably don't know how much leaves this province.

A lot of questions about tidal - that's in my backyard; Minas Basin, of course, is in my constituency. The thought at home is great, we're going to have this wonderful tidal plant, we should be getting energy for pennies. But that doesn't appear to be a reality. What they see is Nova Scotia Power gathering all the energy, selling it off, making even more profit on the backs of Nova Scotians. So I'd like to have some of your comments on that.

MR. BENNETT: Well, as we were explaining this morning, there are expenses incurred as part of running the power system, and a big part of that expense is the cost of fuel that we use to make electricity. About 90 per cent of the electricity that's produced in Nova Scotia today comes from fossil fuels. Some of that, a small percentage, is natural gas that comes from offshore Nova Scotia, most of it. Some of it is oil that obviously is imported and a great deal of it is coal that's imported, as well - imported, because we need to buy low-sulphur coal in order to comply with the environmental regulations that we face in the province. So domestic coal, for the most part, can't be used in a way that would allow us to comply with those environmental goals. We do use some domestic coal, several hundred thousand tons of domestic coal that's surface-mined in Nova Scotia. But for the most part, because of environmental obligations, regulations, we import lower-sulphur coals.

As I said, I believe there's an opportunity to use fuels that are based in Nova Scotia, whether it's fuel that comes from wind, from tidal, or a fuel that comes from our forests in the form of biomass or underutilized farmland. Those are opportunities for us to redirect the money that's leaving Nova Scotia and re-inject it into the Nova Scotian economy.

MR. PORTER: How much are we talking about? When you talk about money being re-injected, I mean that's great, thank you for your answer, some Nova Scotians may understand that. I'm interested - these are tough economic times, we all realize that - how soon and how much are we looking at here?

MR. BENNETT: Well, speaking to very preliminary numbers, in a broad sense, the company spends several hundred million dollars each year buying fuel from outside of the province. I believe that an objective of redirecting $50 million of that spend into the Nova Scotia biomass industry would help us secure about 1.2 million to 1.5 million green tons of biomass for use in our plants in the future. That's a significant amount of biomass in the Province of Nova Scotia and work would need to be done to ensure the environmental sustainability of that type of harvesting process.

I believe, and our company is committed to working through a process with government and other interested stakeholders, to determine whether or not that opportunity really exists for Nova Scotians.

MR. PORTER: Any idea what that means in job numbers for Nova Scotians?

MR. BENNETT: Not a direct impact, but a $50 million redirection of funds into the economy is a very significant injection on an annual basis for the foreseeable future.

MR. PORTER: I want to talk a little bit about the infrastructure. We realize we have the potential for hurricanes here in the Fall, usually. We always have a 100-kilometre wind in Cape Breton as a regular, daily occurrence. I mean certainly out where we come from we

have wind at uncertain times but, more specifically, people are saying, well, the wind is not blowing but the power is out. There seems to be a line just falling for no reason.

You tell these people about coastal communities and the salt, people think you're crazy. There's not a lot out there about that. You know when you get a little further maybe from the coastline, Nova Scotians really don't have an understanding of what that means. They tell you there's salt on the wires and they look at you like you have four heads - what are they talking about? That doesn't make any sense, is that just an excuse?

The whole perception of what's going on in Nova Scotia with the infrastructure is not a good one, generally where I come from but once upon a time, when I was a kid, there were all kinds of line people around working. There was a perception, at least, that there was a great deal of maintenance going on at the dams and the generating units, as well as on the lines. You saw new poles being installed and line maintenance being done but you don't have the linemen. When the power goes out we're seeing people come up, we're seeing people on regular maintenance things when you disconnect your power and put a new service up on your home, we're not even getting local people to the door anymore, we're getting folks from almost anywhere. They could come from Halifax that day for service.

People look at that and go, are we that hard up, we can't hire the workers? Nova Scotia Power keeps jacking my rate up, and again I'm going to come back to that because this is the perception, we're paying more for less and that's what they keep seeing. One of the main questions out there - and probably the answer would be no here but I'll ask just the same - is there ever a day when we're going to see - tidal, obviously, we're hoping is going to come through - is there ever a day in this province where we're going to see the rates for power come down?

MR. BENNETT: Well, energy rates and costs for everything continue to go up around the world. Energy is a particularly volatile component, as we all know. The fact is that at least 40 per cent of the cost of electricity is the cost of fuel. The rate increases that people have seen most recently, more than 70 per cent of that rate increase was to cover the increased cost of fuel. That's the key driver of increases.

There are other increases as we do add more employees. This year we'll be adding approximately 60 apprentice linemen to our company to begin the process of becoming fully-qualified power-line technicians, as we augment our workforce and plan for succession and retirement into the future. Those are things that are going on.

The system is well maintained. In 2004 or 2005, I believe, the Utility and Review Board had an external consultant review the status of our system and they determined that the system was in good shape, that it did meet industry standards and that it was well operated. But at the same time, we do things to try to control costs in every way that we can, in order to keep rates as low as possible for customers.

In that regard, another Utility and Review Board consultant, Kaiser, just last year reviewed our operating expenditures and determined that we were a low-cost operating utility for our size. All of these things come together to create an environment where we are optimizing every opportunity that we can. So if it's more efficient to move crews around to perform work, then crews do move around to different areas to do that because it's more cost effective.

MR. PORTER: I understand that and I understand the added fuel cost. I understand you buy fuel, what you bought fuel at maybe last year that you're burning now, I'm not sure how far back you are in the purchasing of your fuel but people see today's oil prices, for example, again here we are at an all-time low of $37 or $40 a barrel, compared to what it was maybe six months ago or a year ago, and our rates just went up in January. Great, no problem, I understand what you just told me, you had to pay a certain amount for that fuel. It's not likely that oil costs will stay as low as they are for a long period of time - we're hoping they'll level out again somewhere - but I wouldn't see that you're going to reduce costs once you're buying your fuel at a lower price. Would that be fair to say as well?

MR. BENNETT: Well, we understand why customers feel differently about electricity than they do other fuels. The fact is that the electricity energy commodity is not as volatile, in terms of cost, as other fuels are. From 1996 to 2006, in that 10-year period, fossil fuel prices - oil prices, gasoline prices - increased 150 per cent, where electricity prices increased less than 50 per cent - in fact, I think about 25 per cent. So there have been significantly lower levels of increase in electricity prices and more steady increases over time, rather than the volatility that we see in other energy commodities, like gas or oil.

MR. PORTER: Is there ever a time, though, when it's going to balance out? People can only pay so much. George who works across the street as a mechanic likely isn't getting a 9 per cent increase this year to offset the 9 per cent that he's going to pay on his power bill.

MR. BENNETT: For the most part, our objective has been to keep our operating expenses below the rate of inflation. What that means is that from an operating expense point of view, in real dollars, you pay less for electricity than you have in the past.

The challenge is with fuel and as world fuel prices continue to increase, we're subject to that. That's exactly why I believe that our company needs to move away from the use of foreign fossil fuels and focus more on the use of domestic fuels, where we have stronger price controls, less exposure to foreign exchange volatility and more opportunity for us to develop renewable resources, here in the province or in the region, that can help us stabilize prices.

MR. CHAIRMAN: Order. Mr. McNeil.

MR. MCNEIL: Thank you, Mr. Chairman. I just want to go back to how we finished up. I know that the regulations say you can earn 9.6 and what has been consistent, as I said to you earlier, was the $100 million that has been going to Emera: in 2007 it's $100 million, even in 2006 it's $104 million, in 2005 it dropped to $91 million, in 2004 it's $107 million, and in 2003 it was $112 million. So when you average them out consistently, we've been handing over to Emera roughly $100 million, as ratepayers of this province, to invest in whatever utility they see fit to invest in.

[10:00 a.m.]

Now we're at a point where we're being asked, as ratepayers, to cover a $100 million bill that we're going to need to really restore the reliability of our infrastructure. I don't think it would be too much to ask people on the street when they look at that and suggest that perhaps $80 million annually wouldn't have been a bad amount to give to Emera and the other $20 million had been invested over the last five years.

You had mentioned a Kaiser report that had been done for your company and done by the Utility and Review Board in 2006. It talks about comparative reliability and it goes on about the length of time of outages; we're almost three times as high, the frequency. We're about 20 per cent higher than that comparable utility. It talks about the differences between how many we would have and they would have. We are about 60 per cent higher than they are.

Then the final one is vegetation management. They spend almost twice as much on vegetation management as we do. Then it goes down and compares the causes of those issues. Weather is virtually the same from one utility to the other. The loss of supply, we were a bit higher on that. When it goes to tree contact, we were about 60 to 70 per cent higher, in terms of that's the cause of the outages in this province.

This is something that the company had known for a period of time. Why, all of a sudden today, are we talking about now going to the URB to speed up that vegetation management so that we can deal with what has become a public issue, a public relations nightmare, for the company in terms of reliability?

MR. BENNETT: We have consistently improved reliability in Nova Scotia Power since the early 1990s, up until the early 2000s, in fact, through various programs of vegetation management, accelerated equipment replacement programs and improvements in controls of the system overall. The statistics show quite clearly that there has been a continuous improvement up until the early 2000s. Since then, we have experienced a number of significant outage events related to weather.

What we do know when we compare ourselves to other comparable Canadian utilities in Region 2 CEA statistics is that we are experiencing and recording a higher number of

abnormal weather events than other utilities, in the last number of years. For example, in the last five-year period we've had about four times as many significant recordable weather events as we had in the previous 10-year period.

We are seeing a significant difference in the performance of the system during bad weather. The other utilities that we compare ourselves to are not seeing those same conditions. We are working to understand that, we're looking at the programs that we would need to put in place to improve the performance of the equipment under those circumstances and we're moving ahead. Certainly one of the areas that we're moving ahead aggressively on is more vegetation management because it is exactly right - our performance when compared to other utilities is lesser in terms of the reliability related to tree contacts. It is a clear indicator that we need to spend more and remove more trees. We will be looking to our customers and communities to support us in that regard as we move forward with the program.

MR. MCNEIL: In this independent analysis that was done by Kaiser, weather was basically the same across these two utilities. It very clearly indicates the issue is around vegetation management and it's what is creating some of our challenges with these outages. I guess the real issue was, why are we reacting today as opposed to why weren't we reacting when we had an opportunity in good economic times, quite frankly. When the economy was moving at a much better rate, I would say it was much easier for Nova Scotia Power and Emera to raise capital outside of asking the ratepayer to do it on an annual basis. That would have made more sense in terms of the long-term stability of our infrastructure as a province.

One of the other things - and I'd just like you to give a bit of a description - is what's a leading line worker compared to a line worker? What's the difference?

MR. BENNETT: Sorry, the skills level.

MR. MCNEIL: But what is it? Your line workers are broken down as leading line workers, line workers and apprentices - we all know what the apprentices are.

MR. BENNETT: Right. A leading line worker is someone who has leadership accountability over other members on the crew. They can be assigned those roles on a temporary basis or they can be assigned that responsibility in the permanent trades allocation. So it's a unionized position where they are responsible for leading a crew.

MR. MCNEIL: In 1992, we had 24 leading line workers in the province, we had 149 line workers, we had 56 apprentices for a total of 329 men and women who were line workers. In 1996, we had 107 leading line workers, we had 130 line workers, zero apprentices, for 237.

When the URB did a review of Nova Scotia Power following the storm of 1997, one of the things that they attributed to our inability to respond in a rapid way was the reduction of workforce. They made a recommendation to the company that they believed your company should restore line workers to 1994 levels. In 1994, we had 291 line technicians, 128 were leading line workers, 159 were line workers and in 1994 we had only four apprentices. Where are we at today?

MR. BENNETT: The Utilities and Review Board is interested in the staffing levels of our company, as are we. As I mentioned earlier, one of the responsibilities that I have is making sure that we have the right number of power line technicians and other employees in the company. The regulator today is aware of the number of line people we have and is comfortable that we can provide adequate service to our customers with those employee levels, when considering that we also use contract assistance - particularly during storms - when considering that our planning processes for storms and the work that we do in that regard have dramatically improved since the reviews that were done following Hurricane Juan and when you consider the cost. So balancing all of those parts of the equation I believe that we have the right number of power line technicians on our system to provide adequate service. We review that annually and as I said, we are increasing our numbers this year by at least 60 power line apprentice technicians as we augment our workforce going forward.

MR. MCNEIL: Following the submission that was made by Nova Scotia Power to the URB, even with those 60 additions that you're bringing in, you are going to hold firm at 170, so those 60 are replacing people who are leaving and retiring. As you and I have discussed, my father was a line foreman with the old Light and Power. I know how tough the job is on the body, I know how in the long term for people that are going out, it's a physically demanding position. But your company has made a decision not to go to 1994 levels. You're going to hold firm at 175 today because those 60 coming in, according to your numbers that are at the URB, are not to add to any additional linemen. It's barely to hold that number stable today?

MR. BENNETT: My understanding is that we have plans for about 217 linemen in the company for 2009. I want to make note that we have tremendous respect for the work that our power line technicians do - it's a very demanding job, no question.

Since the early 1990s, like in many areas of business, there have been efficiency and productivity improvements across the board. We have better vehicles with better lift capabilities, so it's unusual to climb poles these days with the modern lift trucks that we use. We have better tools - the days of the hand-powered brace and bit are gone and all of the tools that these workers use are hydraulic power tools. Yes, it is heavy work, but the equipment has moved away from heavier porcelain-related items to polymer-related items, things are lighter. The systems are set up for faster installations, so when you couple staffing levels with technology and equipment improvements over time, you would expect that you

should achieve efficiencies if you're running your business in the most cost-effective way possible.

MR. CHAIRMAN: Order. Mr. Preyra.

MR. LEONARD PREYRA: Thank you very much, Mr. Chairman and thank you, Mr. Bennett, for speaking to us today. I have a number of questions related to my constituency, two in particular. In the last week we've had two power outages in my constituency, one on Friday night. I got lots of complaints about that, primarily from business people who are just frustrated with the fact that they appear to be so frequent. There were a number of them over the Christmas period, it also cancelled the Progressive Conservative convention over the weekend or part of it - I've got no complaints about that.

The fact is that these outages have a significant impact on certain constituencies, the business community in particular. Prior to that, there was a power outage that affected seniors' homes in my constituency and power was out there for about eight hours on the coldest day of the winter. Many of the residents there are confined to their apartments and had a very difficult time getting around and getting to doctor's appointments and they just had a fear. I'm wondering whether or not Nova Scotia Power has any contingency plans for dealing with these kinds of emergency - or almost emergency - situations? Certainly, there didn't appear to be any plans in place for dealing with seniors in nursing homes and those kinds of potential emergencies.

MR. BENNETT: The incidents of which you speak were very unfortunate situations and, of course, we understand that our customers are inconvenienced and frustrated when outages like that happen. In fact, we do have emergency response plans and we are coordinated with the Emergency Measures folks in the province, to ensure that during large-scale interruptions in particular, there is a coordinated effort to make sure that people who are exposed to long-term outages have the support that they need.

MR. PREYRA: This wasn't a wide-scale outage. This was a specific outage in quite a broad area in terms of the numbers of people affected because it was in downtown Halifax. But there didn't appear to be any attempt to contact people in their homes and say, how are you doing, all right, it has been eight hours since you've had any food or heat and there was nothing happening there. In fact, I walked up the stairs and I found this 80-year-old woman trying to get down the fire escape with a walker and I thought, this is crazy. There is no one out here - not Metro Housing, not Nova Scotia Power - and people were just waiting in the dark.

MR. BENNETT: We do what we can do during extended outage circumstances to communicate with customers to help them understand when the power will be back on and try to help people make plans or arrangements. The Friday night event of which you speak was several hours and we realize that was in a commercial district on a Friday night. I was

certainly made aware of that about 10 minutes after it occurred and it's very much on my radar screen. The other event at the senior's complex - I'm not directly familiar, if that was quite some time ago, but . . .

MR. PREYRA: A little over a week ago.

MR. BENNETT: Again, we do what we can do. Our primary focus is getting the power back on as quickly as we can and eight hours at a seniors complex is certainly a long time. I know there are often other complications as well in terms of sometimes we get the power restored but there may be a problem in the building that prevents the power from coming on in that specific building, which obviously is the building owner's responsibility.

MR. PREYRA: Do you have any provisions for emergency shelters for extended outages like that? On a cold day, eight hours is a very long time.

MR. BENNETT: Again, that would come from coordination with the Emergency Measures folks in the province.

MR. PREYRA: But you yourself have no provisions in place for ensuring that your customers are safe and warm, and relocating them if it's going to take a long time. Essentially, this is a problem for Nova Scotia Power. I understand that Emergency Measures will deal with catastrophic types of events and widespread outages, but we're talking here about something that was confined to a limited area and Nova Scotia Power would be in the best position to know who has power and who doesn't and how long that power has been out there.

[10:15 a.m.]

MR. BENNETT: For outages that last several hours, it's probably not necessary to open shelters. For outages that last for a very long time - again, during major events - when that happens, we are coordinating with the Emergency Measures folks and we are doing work to open facilities to help our customers in any way that we can.

MR. PREYRA: I've talked with people during these events and we eventually talked to your staff and many of the staff say that their numbers have gone down over the years. In fact, they have very long lists of work orders and they never get to the middle of that list. There are all these crises coming up and they have to deal with them and they're called off work. They said part of the problem is that there is very little actual maintenance being done short of crises.

MR. BENNETT: Our maintenance programs are industry standard, good utility practice maintenance programs and they have produced good results over the years. As we mentioned earlier, we have improved reliability since the early 1990s, until recently. Now

the experience that we've been having with the bad weather and tree problems require us to rethink the maintenance programs that we have on the system. In fact, if we're going to experience weather events with winds in excess of 90 or 100 kilometres an hour, we'll have to rethink the fundamental design of the power system itself. In that regard, we intend to bring programs forward to improve the performance of that equipment and improve the reliability.

MR. PREYRA: But no, the question is your staff seems to be saying that it's not weather events, it's the problem of not enough investment in staff, not enough investment in training, not enough anticipation of issues down the road. I don't know if you meant it but you were saying that you were trying to reduce your operating costs at well below inflation. Now that seems to me an indication that operational costs are being cut.

MR. BENNETT: Well, it's a balance of having the right operational costs with the right level of reliability that customers want. Obviously achieving that balance is hard work but in order to keep rates low, we've worked hard to make sure that we've reduced waste in the company, that we've improved efficiencies, that we've kept our operating costs as low as we can.

I understand what you're saying but the fact is the statistics show that absent major weather issues, our system performs on par with other Atlantic Canadian utilities. So the problems that we're experiencing are related to weather but they are problems. We understand that our customers are concerned about them. We're not happy with that level of performance. What I'm suggesting is that we're prepared to do the work that we need to do to harden the system, to make sure that it will perform in that bad weather condition.

MR. PREYRA: Now I was talking to one of your staff members last week and said, what could we do to ensure reliability of supply? They said, tie Nova Scotia Power's executive compensation to power outages and reliability. They said those - that executive compensation is so out of touch with what ordinary Nova Scotians are experiencing, in terms of the reliability of supply, that there might have to be some correlation between performance and compensation. Now, he was joking, I think. (Laughter)

MR. MACKINNON: You're not. (Laughter)

MR. PREYRA: There seems to be a general - if you look at the political culture today, there seems to be a sense that executive compensation is out of line with performance. I guess in a general way, how would you respond to that?

MR. BENNETT: Well, I would respond by - and hopefully this gives you comfort - that executive compensation in our company is tied to reliability performance.

MR. PREYRA: Not shareholder performance, I'm talking about customer performance.

MR. BENNETT: No, sorry, you asked executive compensation. My compensation is tied to the reliability performance of the power system. Our board of directors ensures that we perform against a series of balanced work-hard measures that include customer service and reliability performance on the power system. So we're measured against that and compensated accordingly.

MR. CHAIRMAN: Mr. Bain.

MR. KEITH BAIN: Thank you, Mr. Chairman. I have just two or three questions and, if time permits, I'll share my time with my colleagues. You talk about getting away from the use of fossil fuels and especially foreign fossil fuels. In Cape Breton, there's a great deal of interest lately in reopening of the Donkin mine and it's my understanding that the coal in the Donkin mine has a high thermal value. I guess it would be interesting to hear what your company - do you have any plans for the use of coal, if and when the Donkin mine gets going?

MR. BENNETT: As I said, I think that it's extremely important that we focus on the use of domestic fuels as much as we can, including wind, biomass and coal. One of the ways to enable the use of domestic coal, ironically, is through the use of more wind and more biomass in Nova Scotia. That will allow us to lower our overall emissions so that we can use domestic coals, which happen to be higher in several emissions components like sulphur and mercury.

So the challenge with using the Donkin coal that you're speaking of, is with its high mercury content and high sulphur content. To allow us to use that, we either need to make modifications on our power plant, which could be quite expensive, or we need to create some head room in our emissions targets by creating even more renewable energy opportunities, so that we use less foreign coal.

MR. BAIN: So I guess I didn't get an answer on this. Do you have plans to use Donkin coal?

MR. BENNETT: I'm sorry. We would be very happy to use Donkin coal if it was available at a price that represented good value for our customers and if it could be used in a way where we could still meet our emissions targets.

MR. BAIN: We've been talking a great deal this morning as well about tree clearing. I'm just wondering about the possibility of moving lines. I ask that because I'm from a very rural area, it's totally rural. There's one area in particular where the line goes through the middle of the woods and the residents have told me that half the power poles have been up

on the side of the road, or laying in the ditch at the side of the road for two or three years now. There happened to be a power outage a couple of years ago and there was a great deal of difficulty locating the problem - that's because it was in the middle of the woods and the time of the year.

So are there plans to do stuff like that, where that line going for the residents is going through the middle of the woods, to put it where it can be easily accessed?

MR. BENNETT: Absolutely yes, you're absolutely right. In years gone by, to ensure that the cost of the system that was built was - and that line has maybe been in the woods for 30 years, easily 30 years - those lines were built to realize the best, lowest cost possible because a straight line was the best way to get to where the customer was.

Over time, when you consider the impact of clearing trees and continuing to keep that right-of-way clear, it makes complete sense to move those lines out to the side of the road and we do that every opportunity that we get. We often coordinate that movement with the telephone company where we share poles. So those poles that are alongside the road may, in fact, be telephone company poles - I don't know - but we would be working on a coordinated project to share the use of that facility to realize the best economies possible.

MR. BAIN: I guess the other one is the frequent power outages and one area in particular in my constituency is the North of Smokey area. Because of geography, the businesses and the facilities and the residents depend on computers to conduct their everyday business. As a matter of fact, just yesterday I got a call from a constituent in the North of Smokey area - a totally unrelated topic - and, as we were talking, he said, oh my God, the power just came back on. He said it's become a joke down here as to what day the power is going to be off this week.

What plans are being made? I know that the North of Smokey area has been troublesome because of power outages - interesting to hear what the plans are for that.

MR. BENNETT: Well, certainly there are situations in Nova Scotia that are more challenging than others but, as I've said, our objective is to invest and to improve the reliability for all of our customers in Nova Scotia. We'll begin where the system has been performing poorly and we'll work our way across the province and make the improvements that we can make.

MR. BAIN: The other thing, and again I'm going by comments from residents, is the fact that when there is a power outage, the truck will arrive with one worker. They are used to seeing two people on a truck working and they wondering about the safety of that worker, that one lone worker on the truck that is making repairs. Could you comment on that.

MR. BENNETT: Yes, we do have multiple programs in the company that are designed to lower costs, so that we can keep rates for customers as low as possible. Those programs include shift programs, where we have employees working on evenings and weekends to respond to trouble calls. They also include single-man response programs because we know that about 80 per cent of the time, outages can be responded to and be restored appropriately and safely with one person, rather than sending two people out on overtime to do that work.

In the one-man response program, all of the work that they do is governed by a very strict set of safety protocols. In the event that they investigate the problem and find that they need additional help, they will call for that other man who will be dispatched to come along and effect the repair.

MR. BAIN: So it's not considered a safety issue, as far as the employees and the company are concerned.

MR. BENNETT: No, we've had the program in place for many years and we've worked collaboratively with our union and established the appropriate safety protocols to make sure that that work can be done safely. In fact, one of the things that we're very proud of in our company is our safety record. We operate one of the safest utilities in the country and it's a source of pride for all of our employees, particularly those working for the International Brotherhood of Electrical Workers.

MR. BAIN: Thank you. I'm going to share my time.

MR. CHAIRMAN: Mr. Porter, you have three minutes left.

MR. PORTER: Thank you, I'll go quickly. Mr. Bennett, we talked a lot today about replacing infrastructure, hiring people and putting them to work, spending millions of dollars. We know we have severe weather in this province and we know most of our outages, I guess, are probably related to the weather - wind, snow, rain, whatever it might be. Why are we not looking at a long-term plan? You're talking five years - why are we not looking at a plan to put these wires underground?

MR. BENNETT: The issue of underground wires has come up several times in discussions and the technology that exists today certainly does allow for the effective installation of underground cabling. I believe that that is a particularly reasonable approach when you're building a new subdivision, for example. When you're going in for the first time and installing infrastructure, we should be considering underground installation. Now it is more expensive, but I think the esthetics, the reliability and overall the performance of the system in new installations could be effective if it was installed underground.

Retrofitting existing lines and moving them underground is another question altogether. When streets are developed and the work is done it is quite difficult to install the cables underground. It becomes a particular issue in long runs of lines, it's not effective at all in the country where you have a low customer density, it's far too expensive.

MR. PORTER: Just on that, I just want to comment because I'm running short on time. We put $100 million a year into a parent company, Emera, for the last five or six years, whatever it has been - that is an awful lot of money. The money is there, and Nova Scotians will tell you - it's time to start investing in Nova Scotia, not our parent companies and spending in the U.S. and places like that. That money, it's there, it's time to start spending it here at home if that's what it takes to secure our lines.

We are looking at the long term, not tomorrow, not next week, we're looking at a long-term view here and we need to look at costs. Costs are always going to be an issue, but the money is there, obviously; no problem, I don't think anybody is against Nova Scotia Power making money. You're a business, it's expected, you supply jobs, et cetera - that's all good, but the customer service aspect has got to be there. Examples like were given here - eight hours at a time, maybe unnecessarily; examples North of Smokey; examples in my area. Invest the money in Nova Scotia where it belongs and secure the infrastructure for the long term. Thanks very much.

MR. CHAIRMAN: Time has expired, good timing. Mr. McNeil.

[10:30 a.m.]

MR. MCNEIL: I just want to continue on where we were speaking earlier around the line technicians and the fact that the URB has recommended that your company bring its line crew up to around 300 people - 291 - which was the complement in 1994. Your long-term plan that's in human resource replacement that is in front of the URB says you're going to be at 175, is where it looks the company is now going to be pushing toward. What do you say to Nova Scotians who are finding the fact that the length of time their power is out is in direct relation to the number of people who are on the ground actually putting it back on?

MR. BENNETT: If I could just take a moment to talk about employees and level of investment. In fact, this year in Nova Scotia Power, we will spend in excess of $200 million in the province investing in facilities in Nova Scotia, in capital investments and improvements. I'm proposing that we undertake programs to improve reliability that would increase that investment level again and in addition to that, we spend more than $200 million on operating expenses, salaries and other purchasing programs within the province.

We are making substantial investments. Of course, to get this work done it requires employees and that's one of the things that we know is on the mind of our customers, on the mind of our regulators and it's on our minds, too, as we perform succession planning work

in the company looking to the future. The fact is, we have work to do and we will have the people around to do the work.

MR. MCNEIL: A couple of things. Number one, that investment you're talking about - who's paying? Are you going to be going to the ratepayer one more time this year to allow those investments to take place or are we going to say to Emera, sorry, for the last five years we've been giving you $100 million annually, roughly. We need some of that money to invest in our infrastructure to make sure that those customers in Nova Scotia, who are relying on it so desperately, are going to have some level of comfort that our infrastructure is reliable and that their power will be on.

We know there will be outages - we live in a climate where there will be outages - but there has been an unacceptable number of outages. If you look at the storm that happened on December 22^nd, when the power was out in some cases for four or five days. If you're looking here, the URB has said very clearly to your company, you need to have a complement of about 291 line workers. You put in front of them today saying, we need 175.

For the people in southwestern Nova Scotia whose power was out on December 22^nd, it's little comfort that there were line crews coming across on the ferry on December 24^th, to help put their power back on. What they want to know is when they pay their power bill, there is a relationship here. We're buying our power with the idea that you're going to supply it to us in a regular, consistent way and they just don't feel that. As you go around Nova Scotia and talk to people, they don't feel that. This is a one-way relationship where we're going to pay, but the level of reliability is not a commitment made by the company.

When you clearly look at the human resources, you heard what the URB has said, you needed to get to the complement of 291, we can debate that side of the number a little bit, but you're talking less than 100 people who actually go out and fix the lines, who make sure the power arrives at the house. For most Nova Scotians that doesn't make sense that we could somehow believe we could create a level of service to the 1994 level with 100 fewer people and wait a few days for someone to come in from wherever - Maine, New Brunswick, some other private contractor. We need to restore confidence in Nova Scotians that this company - a Nova Scotian company - is going to invest in Nova Scotia and it's going to make sure that the service that we're buying on a daily basis is reliable. How do we do that?

MR. BENNETT: When you remove the impact of storms in the most recent few years, our reliability performance is comparable with other Atlantic Canadian utilities and it's better than our history of performance in the early 1990s. The item of staffing has been reviewed by the Utility and Review Board and external consultants and they're comfortable that our staffing levels are appropriate, particularly considering advancements in the technologies that we use and the planning processes that we use to do our work.

The issue that we face here is response during major weather events and in those situations we've developed very, very good response programs. After Hurricane Juan, with the help of key stakeholders, the Utility and Review Board and external consultants, we put together a very robust response plan that, in fact, does include the use of external resources from other contractors and utilities across the region. That's consistent with the practices of all utilities in our jurisdiction.

MR. CHAIRMAN: Thank you. The time is expired. Ms. Conrad.

MS. VICKI CONRAD: Thank you for being here and offering us your presentation and answering all of these hard-nosed questions. My first question is around biomass. Do you feel that the future of renewable energy really revolves around biomass? I guess what I'm getting at is the feedstock for biomass, I believe, would be wood waste, wood chips and any other leftover product from wood . . .

MR. HAROLD THERIAULT: Alders. (Laughter)

MS. CONRAD: Alders, as my colleague to the right of me is saying. This year was a really difficult year for people looking for wood pellets - there seemed to have been a scarcity of supply. We know a lot of wood waste is used in a lot of our sawmills, paper mills in terms of chips and that sort of thing.

A few years ago, I was having a conversation with the owner/operators with Brooklyn Energy and a couple of years ago they were quite concerned about the availability of wood waste for their production. I'm wondering if it makes sense to really put all of the eggs in the renewable energy basket for the future around biomass? Do you foresee perhaps, you know, in years to come, a scouring of the forest floors looking for wood waste or wood product to chip for the manufacturing of energy?

MR. BENNETT: Well, of course, you're exactly right that we should never put all of our eggs in one basket. In fact, our plans for our future energy needs include a portfolio of solutions: new wind generation; our legacy coal generation, although used to a much lower extent; potentially tidal generation; and, of course, imports from outside the province facilitated by stronger regional interconnections; and, of course, biomass, as we're speaking of.

I believe that biomass represents a reasonable opportunity that should be explored. I believe that with the right sustainability practices, with the right regulations, the right business practices we can create an opportunity for Nova Scotia to take advantage of not only waste wood resource that might exist today from our forestry practices, but also take advantage of underutilized farmland and potentially create a biomass industry around Nova Scotia that could supply some of our energy needs in the future, but certainly not all of them.

MS. CONRAD: Are you suggesting that we take underused farmlands and convert them into lands that would support biomass stock?

MR. BENNETT: We think that's part of the solution that's available to us in Nova Scotia. There is a tremendous amount of underutilized farmland or land that is vegetated with underutilized species and those could be harvested and used in a co-fired operation and when I say co-fired, I mean in our existing plants that exist today that burn coal. Rather than burning as much coal as we burn today, we would burn a mixture of coal and biomass that is bought and produced here in Nova Scotia.

MS. CONRAD: I'm a little bit concerned with the comment about using underutilized farmlands because we are looking at farmers who are looking for a hand up and hoping to develop some of those underutilized farmlands, so I guess to me I'm just a little bit concerned with that comment. I certainly appreciate the need to look at all components of biomass and looking at that as a potential renewable resource.

Over the years there has been a lot of talk about small energy producers that would include wind, solar, hydro, smaller tidal projects. Nova Scotia Power was a partner around the committee table with the Electricity Marketplace Governance Committee many years back. A lot of the recommendations that came out of that committee have yet to be implemented, which would see, if all of those recommendations were implemented, smaller producers being allowed to sell directly to customers.

For example, a small producer of wind - and I'm not making a comparison to the six contracts that Nova Scotia Power currently has negotiated, they're bigger producers in a sense - who may want to put up a wind turbine and some solar panels and be producing enough energy to power maybe 10 or 15 homes. We don't have any regulations in place that allow for the feed-in laws that would make that possible. Is Nova Scotia Power opposed to seeing smaller, independent producers come onto the grid and sell directly to customers or sell the energy back to Nova Scotia Power?

MR. BENNETT: We believe that the most economic, cost-effective generation should be brought on line in connection to serve all of our customers. There are steps being taken now to expand elements such as the net metering program that is discussed in the new energy strategy. There will be an expansion of that program that makes it more flexible and creates opportunities for people to construct and use their own generation facilities on their own land.

MS. CONRAD: But this is different than net metering. This is actually allowing a small producer to sell directly to a customer, so in other words, being in direct competition, if you will, with Nova Scotia Power.

MR. BENNETT: There is a competitive environment today for those customers who exist, the municipal utilities, for example. Those customers are in place and can buy energy from whoever they want to in the market. The transmission tariffs exist today that are in place to allow people to do transactions across the transmission system, both within Nova Scotia and outside of Nova Scotia. To move to the next step that you're discussing would require the development of a distribution tariff system and that's not in place today. I don't believe that produces the best result, in terms of cost-effective solutions for our customers but we're certainly not opposed to that.

MS. CONRAD: Because we've also heard over the years that small producers of energy could actually create some job stability in rural Nova Scotia, in terms of technicians or manufacturers of small parts and components, too, whether it be wind or solar and also the potential to share in some of the line maintenance that is required, but I am hearing that you're not completely opposed to the idea sometime in the future, as part of that renewable energy basket.

MR. BENNETT: No, I think with the support, with people appreciating the cost of the energy that comes from these projects and with the support of customers and our regulator, we should explore every opportunity that we can to provide renewable energy to Nova Scotia.

MS. CONRAD: I have a sister and brother-in-law who have been living off the grid for almost six years now and I know many younger people are building and looking to live off the grid as an option, so it is workable for small producers of energy, although they are quite small.

My other question is around tidal power and the exciting developments that are happening in the Fundy Basin. We all recognize that it is still several years out, in terms of actually producing energy because the prototypes are still being developed and they'll be tested soon, or one of the turbines. Has there been any conversation with the province, because they are a partnership, they have invested in the exploration of tidal power, has there really been any conversation with the province about potential royalties to the province once the generation of that renewable energy source is moving forward and the potential sale of that energy production and the potential sale not only within the province but in partnering with New Brunswick and in partnering with our partners on the Eastern Seaboard, of Maine and beyond? Has there been that discussion taking place of whether or not royalties would be coming our way?

MR. BENNETT: Well, it's important again to recognize that this project and the technology is really in its infancy but it is moving ahead around the world and moving ahead quickly.

[10:45 a.m.]

From Nova Scotia Power's perspective, we're really only one of a number of participants in the development in the tidal energy project. Our role is to deploy a test tidal turbine with our partner, OpenHydro. All of the development of the infrastructure of the test facility and the permitting and all of the work that has been done in that regard with the province is really the business of Minas Basin Pulp and Power. So we're partners in respect of getting a turbine in the water but we're quite separate from the development work that is going on around the ultimate use of that resource.

MS. CONRAD: But has there been any discussion . . .

MR. CHAIRMAN: Order, order. Thank you. Mr. Chisholm.

HON. RONALD CHISHOLM: Thank you very much, Mr. Chairman. Mr. Bennett, thank you for coming in, a real interesting topic. I guess a lot that I've heard around the table this morning, I've lived a bit. In my earlier years I worked with Nova Scotia Power for about 12 years and I can tell you there were outages at that time that sometimes were longer than they are today. I recall one storm, working down in Arichat, Petit-de-Grat and that area for a week, taking off insulators and connectors and everything and cleaning them up and putting them back on, as a result of salt spray, and then going down to between Sydney and South Bar and working for another five days with power lines and poles and wire, everything all down in the woods. So there have been lots of outages in the past and there will be in the future.

At that time Nova Scotia Power was a great company to work for, I would imagine it still is. There are some days that I wonder why I ever decided to get into this business and not stay with Nova Scotia Power. Anyway, I guess you talked about the . . .

MR. PREYRA: We can arrange for you to go back.

MR. CHISHOLM: Oh no, you're going to have to work for that one. But anyway, there has been a lot of talk about the clearing of rights-of-way and the amount of money that Nova Scotia Power will be putting in this year, $10.4 million I think you mentioned.

MR. BENNETT: Yes.

MR. CHISHOLM: That work was contracted out to, I believe Asplundh for the last number of years. Is that contract still in place?

MR. BENNETT: It is.

MR. CHISHOLM: Is there any ability - I think it was being worked on, maybe it has happened - any ability for some of the smaller contractors around Nova Scotia to get some of that work?

MR. BENNETT: That has, in fact, happened. Not all of the contracts go to Asplundh, they are spread amongst a number of other, local contractors. It's also important to recognize that Asplundh is a franchise opportunity from a company outside of Nova Scotia but the operations are based here in Nova Scotia. The equipment is here and all the people who work for that company are here in Nova Scotia.

MR. CHISHOLM: I know there are a number of people from my riding, my constituency, who work for Asplundh as well.

Back in the 1970s and early 1980s when I worked for Nova Scotia Power, our accident rate, you know we had a very high accident rate and there was a lot of work that went into trying to educate, I guess, to make sure that we reduced the incidence of accidents and a lot of major accidents. There were people who lost their lives, being electrocuted on a line or issues with bucket trucks that malfunctioned, or whatever, and people were killed.

I used to, in my days when I was with IBEW, if somebody got hurt - I know one incident over in Dartmouth where a young guy lost both arms and I went to the hospital to visit him. I used to tell the guys it's not very good when you go into a hospital room and you see a guy there who can't pick his nose anymore because he doesn't have arms and it kind of brings them up to a little reality.

What is the accident rate or the incidence that Nova Scotia has now? I know when I was there we were part of the joint Occupational Health and Safety Committee and the Accident Investigation Committee. They were all set up at that time, so with reduced work forces and not as many people as you used to have at that time, are your accident rates as good, or better? Have they improved?

MR. BENNETT: They are, in fact, much, much better. Obviously, and you recognize that the work we do is very specialized work, it is very hard work, it is often done in very bad weather conditions and it comes along with a certain element of risk. So it's extremely important in our organization that we manage that risk.

The key to our success in improving our safety performance has been our relation with our employees. Many years ago we instituted a program that promoted the concept like a joint occupational health and safety process tenfold, in terms of employees being engaged in making the decisions and determining the investments that needed to be made to improve the safety performance of the company. In fact, we are one of the safest, if not the safest utility in Canada. We don't know what the statistics are for last year yet, but we have an all-injury frequency rate which is just slightly above one, which is approaching world-class

safety performance, which has always been our objective. It is something that our employees are extremely proud of, it is something that I am proud of and it is something that we will continue to work very hard on.

MR. CHISHOLM: You mentioned before, technology, or the way you operate now compared to a number of years ago has changed, like you have bucket trucks, linemen don't climb poles as much as they used to and that sort of thing. I think Keith mentioned getting power lines out close to the road. I remember, when I worked there that maybe you'd have to carry a transformer two miles in the woods, two guys with a shovel handle through a transformer to get it in. That has changed quite a bit. So like I said, our accident rate wasn't very good a few years ago, so I'm glad to hear that. It was one of the things that really bothered me in my role as a business manager for IBEW for four years, having to investigate these accidents and go to funerals for employees who had died as a result of an accident, so I'm very glad to hear that it has improved.

MR. BENNETT: Well, thank you and you know again, recognizing that our people work very hard, often in very bad conditions and we recognize that our customers appreciate the field work that we do and they are often there to support us when we're responding to storms and we acknowledge that and appreciate it, but even in inconvenient times, when they're without power, they're still very gracious to the people who are out there doing the work to restore.

MR. CHISHOLM: Thank you.

MR. CHAIRMAN: Thank you. Just before I give you a chance for any closing comments you might have, I just remind the committee that we have some other business we have to attend to after Mr. Bennett is finished. So if you'd just stick around for a few minutes we'll get that done and then we'll adjourn the meeting after that.

Mr. Bennett, I just ask you to wrap up any comments you have that you'd like to leave with us.

MR. BENNETT: Only to say thank you, Mr. Chairman, to the committee for the opportunity to address you today and to reiterate the areas of focus for me, which are looking for opportunities to invest in Nova Scotia to improve our renewable energy profile and to invest and work hard to improve the reliability in the province and to be part of the communities and the economy that I and our coworkers are part of. So we are very happy to be here and thank you for your time.

MR. CHAIRMAN: Thank you very much, thank you for coming, we appreciate your time.

We have three things on our list here. The first thing is a letter from Mr. McNeil. (Interruption) Mr. McNeil's request that Nova Scotia Power and Emera come for two days and everyone has had a copy of this letter, I believe, and I'd like the committee's comments on it and suggestions. Ms. Conrad.

MS. CONRAD: I'm feeling at this point in time we have heard a number of questions around the table and that certainly is fine with me, I don't see moving forward, and we haven't fully discussed it here on this side of the table, but my quick thought is certainly a lot of questions that have been outlined in this letter have been addressed today. That's my quick thought.

MR. CHAIRMAN: Mr. Theriault.

MR. THERIAULT: Thank you, Mr. Chairman. I would like to recommend that we go forward with this and have Nova Scotia Power in here for at least one day. I've got a book full of questions that I can ask Nova Scotia Power. I can come alone, I could sit here all day and ask questions about Digby County alone.

Digby County alone can produce its own energy down there and that question wasn't asked today. It wasn't asked why there are windmills sitting down there that haven't been run for a year. There are other questions down there, people are asking me every day whether they should buy a generator or not. I was going to ask Mr. Bennett if he owned a generator because people ask me every day, should I buy a generator?

I have a lot of questions, Mr. Chairman, that's just a taste of them. So I recommend highly that we have him at least back here for another committee meeting. Thank you.

MR. CHAIRMAN: Mr. MacKinnon.

MR. MACKINNON: Mr. Chairman, the member for Digby-Annapolis could have had an opportunity today, had he not given up all his time, to ask some of those questions. However, I say that half facetiously.

The situation is that we have a serious situation in the world and in Canada and in Nova Scotia and I think that we should be looking at some of the areas around infrastructure dollars and economic stimulus programs and so on. I would very much like to have something involved with the Department of Transportation and Infrastructure Renewal. The fact that we have no indication, really, about where we're heading in this province, from an economic perspective, I think since we're not in the Legislature dealing with the severe problems that we have, that this committee should be looking at some of these situations.

We had our opportunity today for half a day, we could say, and I believe that perhaps down the road we would have another go with Nova Scotia Power. Certainly I have further

questions, too, but I have - I shouldn't use the word I was going to use - a heck of a lot of concerns regarding the economy of this province and we had better address those.

MR. CHAIRMAN: Mr. Porter.

MR. PORTER: Thank you, Mr. Chairman. I would say this, the honourable member brought up Transportation and Infrastructure Renewal. This is a private company that we, as taxpayers, sink an awful lot of money into and I agree with Mr. Theriault on this, we have a lot of questions yet. We've had some opportunity today. He did not speak to finance issues, I think he quoted that wouldn't be available until after Friday of this week, or something like that, in the near future anyway.

We would say at least coming back one more time for a committee meeting and perhaps three hours, from 9:00 a.m. to 12:00 noon, would suffice to run through some of those kinds of questions. It would give others who haven't had a chance.

I know that Mr. Theriault gave up his time today and I think there are a lot more questions. I know I have a considerable amount more questions with regard to it, as well, and we haven't even touched on the financial piece yet and there's a lot more of that to come and there's a lot more to the discussion that happened here today as well. So we would support at least three hours back here.

MR. CHAIRMAN: Mr. McNeil.

MR. MCNEIL: The letter also speaks not just to Nova Scotia Power. Unfortunately I don't come from the public sector, my background is private business, two hours does not constitute half a day, so we need a full committee as far as I'm concerned.

We, as elected members, may think that half a day is two hours, it is simply not. There are a lot of questions that need to be asked. There is $100 million leaving Nova Scotia Power going to Emera, to be invested in Maine, in St. Lucia and other entities, and we're going to go to Nova Scotians and ask them to ante up. You don't think they're interested?

I think they're interested and I think it's our responsibility to ask and it's a major part of our economy. Contrary to what may be the belief, Nova Scotia Power is not the enemy, they are part of the solution. They are not the only solution, they are part of it and how we build an Atlantic Canada energy grid, how we invest and allow private sector investment. We have a bill in front of the Legislature that would open up the grid today and allow private and renewable energies to go directly to customers.

There are large producers, some in your riding who are looking for it today. These questions need to be asked, need to be explored deeper with Mr. Bennett, as well as with the

heads of Emera. I will stick by the letter that I put in front, that I believe we should have two days.

[11:00 a.m.]

If there's a compromise to be made, then I'd like to have someone put one on the table.

MR. CHAIRMAN: Mr. Preyra.

MR. PREYRA: Mr. Chairman, this letter is dated January 27^th but we're seeing it for the first time today. We haven't had a chance to look at the merits of the argument. We essentially heard - certainly I think Mr. Bennett heard the big issues that we have about Nova Scotia Power and I think we would have to take this under advisement and go back and maybe come back to this agenda item at a future meeting.

Certainly that being said, we're in the middle of a major - or heading into a major - economic crisis. There are lots of the issues on the agenda, certainly as it relates to infrastructure and what the province's plan is for dealing with the economic crisis.

As the Economic Development Committee, it is incumbent on us to deal with those pressing issues as well. So I think our inclination is to look at the big issues that are on the province's agenda, perhaps advice that we can give the government on its budgetary items, on its infrastructure spending and all that. We would like to look at those in the context of this suggestion, so I would like to come back to that.

MR. CHAIRMAN: Mr. Bain.

MR. BAIN: Thanks, Mr. Chairman. I think as Chuck has mentioned, Mr. Bennett told us that the financial report for Nova Scotia Power wouldn't be available until at least Friday, so I think it's important that we have the opportunity to discuss that.

But having said all that, I'm wondering, we're not talking a special meeting here, we're just talking a regularly scheduled meeting?

MR. CHAIRMAN: Well, that's not my impression. The idea with this, I thought, was a special meeting. We normally don't have two-day meetings or one-day meetings, unless we make it a special meeting, but it's up to the committee.

MR. BAIN: I was just wondering, because we have a meeting scheduled for March with InNOVAcorp and if we follow our routine, the New Democrats would have the next month for April and the Liberals, in turn, would have the May meeting. Is it the impression that the May meeting is going to be too late for that?

MR. CHAIRMAN: That's my impression from the letter. Mr. Porter.

MR. PORTER: Thank you. I don't know when the meeting would be, perhaps it could be the April meeting, I know that we're going to discuss it shortly.

I'm prepared, given the importance of this, I'm anxious if they're going to invest a bunch of money, millions and millions of dollars in this province, I'd like to see it underway right away so I think it's important that this discussion get underway.

I would so move that we do allot for at least a three-hour meeting, which would be half a day, nearly half a day, with Nova Scotia Power some time in the near future. That can be our April meeting or whatever but I want to throw it out there, just for the discussion anyway.

MR. CHAIRMAN: Okay, we have a motion on the floor. A seconder for that?

MR. BAIN: I'll second that.

MR. MACKINNON: May I move an amendment to the motion?

MR. CHAIRMAN: Yes, you can.

MR. MACKINNON: Since we were talking a day-long scenario, I would move that we do the three hours, as suggested, but we also have an afternoon session involving the economy of Nova Scotia.

MR. CHAIRMAN: Okay, discussion on the amendment.

MR. MCNEIL: On the whole issue . . .

MR. CHAIRMAN: No, the amendment first. Mr. Theriault.

MR. THERIAULT: I would agree with the amendment somewhat, that we have two hours in the morning and two hours in the afternoon with Nova Scotia Power. I also agree with Mr. Preyra . . .

MR. CHAIRMAN: Just one second, we already have a motion on the floor to make it a three-hour meeting in the morning, so that would be another amendment to the amendment. So the afternoon would be a full morning, whichever, that would be three hours in the morning and three hours in the afternoon, I assume. So let's not get on a third amendment here until time goes forward.

MR. BAIN: Mr. Chairman, on a point of order, as far as I'm concerned, the amendment wouldn't be in order because all it is doing is adding to the existing. We're talking about Nova Scotia Power. If a separate motion wanted to be made for that afternoon, that would be fine but we're dealing with the Nova Scotia Power issue at this time.

MR. CHAIRMAN: Okay. Yes, it is a Nova Scotia Power issue. I'm not averse to the amendment that the member put forward but I believe the member is in order so I rule it out of order but I would ask you to bring it back after this discussion is finished. Ms. Conrad.

MS. CONRAD: I'm not sure if this should be a point of order but I'm looking for clarification. In the motion, was it requested that we have a special meeting or are we looking at holding this meeting on our regular committee meeting date in March or April? I'm not clear on that.

MR. CHAIRMAN: Mr. Porter, on your motion, what was the intention?

MR. PORTER: As of right now we can either do it, and we're looking for an April date to be filled for a witness. That would be what I would have had in mind there. The only other option we would have would be to move InNOVAcorp out and bring them back for next month but I'm open to discussion on that date in and of itself.

Our biggest problem is we have so many committees and less time than we have available, which makes it more difficult to schedule.

MR. CHAIRMAN: I can simplify it a little bit. The clerk just told me that Nova Scotia Power is not available in March, so it would be April before they are available. Mr. McNeil.

MR. MCNEIL: Just on the motion, the content of the letter was around Nova Scotia Power and Emera. I would think if the committee sees fit to bring them in, if we can create a timeline of what that is, then I think we now allow the chairman and the Committees Office to deal with those two companies to find out what is an appropriate time and then they can coordinate that because it will take - you know we're asking two very busy people to coordinate with this committee, so I think that would be part of that. We need to get them, so I think what we need to do is allow you, as chairman, and the Committees Office, the ability to move as quickly as possible to bring them in but that will also depend on their schedule as well. They are in the middle of end of year at this point, as you know.

MR. CHAIRMAN: Mr. Porter, are you willing to amend your motion?

MR. PORTER: I was just going to say, we can amend the motion to actually add and that's what I meant anyway, was Nova Scotia Power, Emera, whatever, but certainly both because there will be questions for both in that time frame. So yes, I have no issue with that.

MR. CHAIRMAN: Okay, Mr. MacKinnon.

MR. MACKINNON: Mr. Chairman, I'm going to vote in favour of this motion. I've worked for many years in the private sector and the public sector and I was used to putting in more than a full day in relationship to both and certainly used to 14-hour days lots of times in the private sector, the fishing industry and other things as well.

MR. MCNEIL: Just like you do now.

MR. MACKINNON: Exactly. However, I do believe that we should be looking at the economic situation in this province and the fact that we have no clear picture on where we're going. I believe we should be looking at a special half day to deal with the economy of Nova Scotia, and sooner rather than later.

MR. CHAIRMAN: Okay, we have a motion on the floor. The only concern I have is if we're going to bring Emera and Nova Scotia Power in, based on all the questions people had today I don't think three hours is long enough. Perhaps four hours to give us a real half day would be a suggestion, sort of a compromise. Would that be a friendly amendment? Mr. Porter.

MR. PORTER: I'm okay with that provided that we do it straight. The biggest issue is we all are busy in our constituencies and I don't know about you guys, I'm sure you are as well. As long as it was four hours straight, maybe with a 15 minute recess or something in there, Mr. Chairman, fine, if that's a half day, four hours, we're good with that. I will just make that amendment from three to four hours.

MR. CHAIRMAN: Okay, let me just get the motion down here so we know exactly what we're talking about. We're talking about April 7^th, correct? A four-hour meeting to invite both Nova Scotia Power and Emera here for a morning meeting which we will arrange - I should say a meeting on that date - with the clerk and Nova Scotia Power. Any comments?

MR. PORTER: Just one point there, Mr. Chairman, is it the 7^th or the 14^th?

MR. CHAIRMAN: The 7^th. There's a long weekend on the 14^th.

MR. PORTER: Oh yes it is, thank you.

MR. CHAIRMAN: Would all those in favour of the motion please say Aye. Contrary minded, Nay.

The motion is carried.

Mr. MacKinnon, if you would like to make another motion?

MR. MACKINNON: Mr. Chairman, I would like to go on record as being supportive of having a special meeting. We, in fact, missed a couple of meetings in relation to the House being in session - at least one, for the limited time the House has been in session. The situation is we should have a special meeting in relation to economic stimulus for this province, as I said earlier, the sooner the better. I would like some discussion on that before a motion is made.

MR. CHAIRMAN: Mr. Preyra.

MR. PREYRA: I would just like to move a motion that we invite at a special meeting the Department of Finance, to give us an update on the state of the province's finances and the government strategy for dealing with the economic issues at hand.

MR. CHAIRMAN: Any other comments? Mr. Porter.

MR. PORTER: I guess only that we would agree with that, we don't have any real problem with that. I think it will be time, by the time we're able to get them in here. We've gone through a number of months now and there are a lot of questions around the economy. It would be interesting to see where the finances are, where we're heading in the year ahead of us and so on. I'm not sure when we'd be able to get them in, but maybe the clerk could work on some dates and get back to us.

MR. CHAIRMAN: I need a motion. Your motion will say what?

MR. PREYRA: That this committee will arrange for a meeting with the Department of Finance officials to give us an update on the economic conditions in the province and the department's strategy for responding to the crisis at hand.

MR. CHAIRMAN: Are you talking a regular two-hour meeting or a longer meeting?

MR. PREYRA: No, I think we should have a special meeting on it. It has been a while since we've had a financial update and it appears it will be even longer to the next one and I think we should have a special meeting on that.

MR. CHAIRMAN: Okay, I need a definite proposal.

MR. PREYRA: At the next available opportunity and as soon as possible.

MR. MACKINNON: The first week in March.

MR. PREYRA: The first week in March that this committee require the Department of Finance officials to appear and to testify as to the state of the province's finances.

MR. CHAIRMAN: There is a motion on the floor as laid out by Mr. Preyra. Any comments? Mr. Porter.

MR. PORTER: I assume we're leaving it in the clerk's hands to seek that out to see what dates are available and she'll report back?

MR. CHAIRMAN: Yes. A two-hour meeting?

MR. THERIAULT: On March 3^rd?

MR. CHAIRMAN: We don't know yet until we check. A two-hour meeting?

MR. MACKINNON: I would suggest three.

MR. CHAIRMAN: A three-hour meeting? A three-hour meeting it will be then, as long as it is passed. Would all those in favour of the motion please Aye. Contrary minded, Nay.

The motion is carried.

Our next meeting will be March 10^th unless we can get the other one arranged.

[The committee adjourned at 11:11 a.m.]