HALIFAX, TUESDAY, JUNE 29, 2004
STANDING COMMITTEE ON RESOURCES
1:00 P.M.
CHAIRMAN
Mr. John MacDonell
MR. RUSSELL MACKINNON (Chairman): Good afternoon, ladies and gentlemen. Welcome to today's meeting of the Resources Committee. Today we have with us Nova Scotia Power Inc. concerning Rural Economic Development Programs, wind-powered electricity, generator capacity, current environmental impacts on Nova Scotia Power Inc.'s operations and Hurricane Juan. My name is Russell MacKinnon. I am your chairman for today, pro tem, and perhaps what we will do at the outset is start with introducing the members of the committee on my immediate left.
[The committee members introduced themselves.]
MR. CHAIRMAN: Our witnesses today include, well, rather than read them, I'll ask you to introduce yourselves. The format is generally we will start off with a 15 to 20 minute presentation, max, and then open up the floor for a question and answer period, if that's okay.
MS. NANCY TOWER: I'm Nancy Tower. I'm the General Manager of Customer Operations at Nova Scotia Power Inc. That includes the transmission and distribution business as well as all customer service.
MR. RALPH TEDESCO: I'm Ralph Tedesco, Chief Operating Officer, Nova Scotia Power Inc.
MR. JAMES TAYLOR: My name is James Taylor. I am the General Manager of Power Production which is the generation facilities, the fuel side, environmental issues.
MR. IAN THOMPSON: I'm Ian Thompson and I'm Vice-President, External Relations.
1
MR. PETER DOIG: I'm Peter Doig, Director of Government Relations, Nova Scotia Power Inc.
MR. CHAIRMAN: Okay. Mr. Tedesco or whoever, you may start.
MR. TEDESCO: Good afternoon, everybody. For those of you not entirely familiar, I'm relatively new to the province. I started here in January and was formerly a President and Chief Operating Officer of an electric and gas company known as NYSEG, which stood for New York State Electric and Gas, which was an investor-owned company. It is just a delight to be back in the province. I grew up on Long Island in New York and having lived in Upstate New York for the past 25 years or so, it is nice to be back by the ocean again.
With that, I do have a presentation. Is your preference that I go through it or ask questions along the way?
MR. CHAIRMAN: Well, the presentation perhaps would be best and then we will open it up because we will still have about an hour and a half for questions.
MR. TEDESCO: Very good. Then I will move relatively quickly through this. What we intend to cover is some aspects of future energy needs, a brief discussion regarding Hurricane Juan, some information about our recent rate application and then, as has been indicated, we will be happy to take any questions that you may have.
The third slide in your packet is a graph that indicates our change in peak demand. You will see three pieces of information there. The dark line is essentially our forecast of peak demand. The little sunspot on that page indicates where demand actually was this past winter so you will see demand was actually somewhat equivalent to what we were expecting in about a 2007 or 2008 time frame and the line below that is a reflection of something I will describe in a little bit that we call interruptible load, the amount of load that we can actually control and reduce on any given day.
In terms of meeting that demand, from that page, you probably have noted it has increased dramatically. We are installing a 47 megawatt gas turbine at our Tufts Cove facility, that is the second such machine we're adding there. For those of you not familiar with this machine, which is known as an ML6000, it's almost exactly analogous to the machine that hangs onto the wing of a 747, the only difference being the output shaft is attached to a generator and it has silencers so you don't hear all the racket.
In addition, we've been making incremental enhancements to some of our existing fleet to extract some additional capacity, both on the hydro and thermal side. As I indicated just a moment ago, we do control about 300 megawatts of our load, which is to say we are
able to interrupt it on a given period of time, for economic or other reasons. That ability was instrumental to our meeting this summer's dramatically higher surge in peak demand.
In addition, that form of interruption is something that is known in the business as demand-side management. We have other approaches that we take to demand-side management, such as real-time pricing, and you might have seen that reflected in what residential consumers use as electric thermal storage. This is using off-peak energy. It helps keep our demand down and avoids the necessity of building additional capacity. Finally, a competitive process has been developed for soliciting new capacity, and this is consistent with the EMGC recommendations.
Another thing that is very important to us is increasing renewable energy, and to add some substance to these words we have established a target of increasing our renewables portfolio by 25 per cent through 2005. An important component of that is the 30 megawatt wind farm that is being installed at Pubnico Point, two of 17 machines have been installed thus far and the rest should be installed later this year. Nova Scotia Power has a $7 million-a-year purchase agreement for the output from that facility, which is privately developed by Nova Scotians.
We are also in the process of offering, or will soon be offering, an additional solicitation for renewable energy. This will be done in three groups under this solicitation. Our goal is to encourage everything from small developers to mid-scale developers to large developers, and it will be done in three groups.
As far as the future is concerned, on the next slide you will see an indication of what our emission targets look like. We have sulfur dioxide emission reductions that we are required to achieve in 2005, oxides of nitrogen reductions, mercury reductions - mercury is a trace element in coal - as well as the challenge of trying to deal with Kyoto. At the bottom of this slide, you will see that "Clear and well thought out targets are important", and I would draw your attention to this. One of the very important things that I think government can do, and with specific regard to Kyoto, is establishing thoughtful rules and a schedule and a process for how the emission reductions will work and how the program will work. The three things I urge you to think about in that context would be obviously the environment, but as well, energy prices and then the third leg of that might be thought of as our economy.
In terms of current actions to address emissions, we are investing about $20 million to control particulate emissions at our Tufts Cove facility. We've also made investment in an international coal pier that is currently under construction - that is a $30 million investment that will provide us access to more distant coal basins, as far away as Indonesia, Russia and elsewhere in order to get fuels for better emission characteristics. At our Trenton plant where we know we also have a local dusting problem, we're also very actively in the process of addressing that.
We do expect to achieve and have substantially moved down the line to ensure that we are achieving the 25 per cent reduction in sulphur dioxide emissions. What that will mean for Nova Scotia is roughly 40,000 less tonnes of sulphur dioxide will be emitted into the atmosphere.
Next page, a moment ago I spoke about Kyoto and what I'd like to draw your attention to here is the gap that exists between the 2010 - shown here as BAU, meaning business as usual case - you'll see 809 megatons of carbon dioxide, less the Canadian target of 571 megatons, which leaves a national gap of about 240 megatons. The electricity and industrial share of that is about 55 megatons and, the next page, gives an indication of what the requirements are for Nova Scotia.
Essentially, we have a gap of 4.2 megatons of carbon dioxide - this is a huge, huge challenge. It's a huge challenge for a couple of reasons. First, 80 per cent of our capacity is solid fuel. Secondly, the business as usual case, when these targets were established, it assumed a massive conversion to natural gas at a price of something on the order of $3 per million BTUs, or $3 per unit energy. Today, natural gas prices are hovering between $6 and $7. To put that in perspective, the price of coal is roughly one-third of the price of natural gas. In addition, if we sought to fire every one of our coal plants on natural gas, we would literally suck the pipelines that serve the province dry, setting aside the pricing and the price volatility considerations.
Another challenge in meeting this very, very significant reduction in CO2 emissions or avoiding rate shock, is how we might deal with CO2 credits - these would be credits that could be purchased. The Russians have recently expressed great interest in selling credits and I would suggest that is what is largely behind their renewed interest in Kyoto in the last month or so.
As a near term solution, we would urge that folks give very, very serious consideration to best available control technology. What I mean by that is simply this - in order to meet the continuing growth in demand, if the company were to commit to using the very best available control technology that existed today, we would suggest that might be considered as compliant with the intent of Kyoto in the absence of other alternatives.
[1:15 p.m.]
With regard to compliance on certainties around Kyoto, the protocol is not yet approved. There is no sanctioned credit trading system. The importance of this would be, how much are these credits? Will Canada allow their use? What will be the market conditions under which these credits might be available? If we were to import power, does that imported power come with or without environmental attributes associated with how that power was produced, and a variety of other questions that create tremendous uncertainty.
The greenhouse gas emissions targets have not been specifically determined. There are no discussions with respect to what happens in the second phase of the Kyoto Protocol. Most importantly, the current business-as-usual assumptions as I suggested a moment ago built around gas prices as well as what the base case emissions target was assumed to be, are unrealistic and can harm Nova Scotia.
So what are our choices? The next page attempts to very succinctly outline a variety of options that we can consider. The first one on this page is cogeneration. The good news is it's clean and it's very efficient. The bad new is, it's typically tied to gas and gas price availability, and has limited applicability, as you need to have a steam host to match up very good with the waste heat that you would otherwise have to make it make sense.
Renewable energy, is greenhouse gas free. On the hand, as I think we all recognize, the wind does not always blow for example, if we're talking about wind turbines, and there's another aspect of wind that needs to also be considered, which is this. Just on the back of an envelope, if we were to consider replacing our Lingan Power stations with the kinds of machines that are at Pubnico Point, we would need roughly 300 of those machines just on a capacity basis, because of the fact the wind does not blow all the time to produce an equivalent amount of energy in a year. We would actually in reality, require 900 to 1,200 of those machines. The 17 machines at Pubnico Point take up over 200 acres. We are, frankly, bullish on wind but it is important that we all have realistic expectations as to what it can deliver.
Coal. On the positive side it's inexpensive and can be burned cleanly, however, CO2 mitigation is a challenge. Combustion turbines are very flexible, easily installed, but generally produce power at higher costs than other alternatives. Importing power is an option. As I had mentioned a moment ago, but there's a question as to under what conditions we could that? Do we have adequate transmission capacity, and if we were to import power, would it come with or without the environmental attributes?
Then certainly, research and development, and in particular, CO2 sequestration, is a very important thing, but we are beginning just now to develop more and more knowledge and in fact the company has entered into an alliance with Dalhousie University for this purpose. On the other hand, its timetable for success is unknown.
As I mentioned a moment ago from a supply perspective, we would urge that the Kyoto plan allow electricity supply decisions to be made with today's best available controlled technology. Secondly, we would urge that we continue research and development into best available control technology and new means of controlling emissions.
Research and development has a very good track record in the industry. If we look at technology such as flue gas to desulphurization, going back to the early 1980s, when it was a relatively new and poorly performing technology, today it is a far less expensive and far more reliable technology.
Fluidized bed technology is a means of burning coal, in particular, quite cleanly. The company, to my knowledge, had the first commercial-scale installation at Point Aconi in North America when that plant was built and, like any new technology, you had some headaches, but just the same we're reaping the benefits of that today in terms of low emission characteristics and low production costs. The other piece of good news is that with research and development, the economics of wind energy are continuing to improve, so it's no accident that you're seeing more and more interest in wind. It's largely a result of improvement in materials and technology.
Another very important point is, what happens if we wait? What this attempts to show is that as we go out in time from today without definitive plans, the options available to us begin to fall very rapidly off the table. So if we don't know what the rules are, options fall off the table. This is simply a result of the time frame it takes to install new capacity to basically keep the lights on.
Hurricane Juan, as I think folks are familiar, Nova Scotia Power and an independent consultant that was brought on by the URB each reviewed the response to the hurricane as well as existing processes. The consultant's primary focus - and our own focus for that matter - was storm restoration preparation, customer communications, how our internal processes work, and what our actual restoration processes are. The majority of recommendations were actually provided by Nova Scotia Power and we firmly believe the majority of recommendations, not only that we provided but that the consultant provided, make good sense and we are actively undertaking to put those things in place. I think you saw some of the results of that during White Juan where I think there was quite a different communications program and a more favourable outcome.
Overall, I just want to emphasize I'm extremely proud of the job that our employees did but, like in any disaster situation, I think there are things that we can learn. I also need to tell you that there are some recommendations that were made in the consultant's report that simply do not work for Nova Scotia, and again let me be specific in that regard. There is a recommendation that we should have had far, far more people lined up in anticipation of the hurricane and then available to help us with restoration. It is our judgment that had we undertaken the recommendation as written, Hurricane Juan - which cost $13 million - would have cost somewhere between $40 million and $50 million with those recommendations, and the net benefit of that threefold to fourfold increase in investment would have been to shorten the restoration time by two to three days for the final 5 per cent of our customers.
With regard to our rate application, Nova Scotia Power has filed an application to increase rates with the Utility and Review Board on May 28th of this year. The rate application is about one thing - dramatically higher taxes. The company has experienced a $79 million increase in its tax liabilities since rates were last set in 2002. One-half of the $79 million increase goes to the province. I've mentioned a $79 million increase - the actual magnitude of the rate increase that we are looking for is $71 million. The application has recently been amended to reflect the decision by the Supreme Court of Canada in a recent tax case. The rate hearing is scheduled for this Fall and new rates are expected to be in place January 1, 2005.
The next slide underscores this tripling in tax rates. Up until this - really through 2003 to 2004, Nova Scotia Power has been able to shelter customers from these increasing taxes and you can see the change on this graph. The way we have done that is through the use of certain tax carryforwards which are phasing out as well as using the profits from the sale of natural gas to pay down these taxes. The two components that have increased the most are our income taxes and grants in lieu of property taxes. Grants in lieu of property taxes have doubled from $16 million to $32 million.
In terms of fuel costs in this rate application, we are projecting that despite the recent runup in market prices of fuel our fuel prices will increase just 3 per cent over what they were when our 2002 rates were established. In addition we are proposing a fuel clause. Essentially what this clause seeks to do is in the last rate proceeding we recognized that fuel was a large part of the discussion, and recognizing that fuel has increased just 3 per cent we don't think it needs to be a large part of this discussion, however, in order to mitigate that concern, if people think the price for fuel that we have is too high, a fuel clause will allow any savings in fuel to immediately be passed on to customers - as well, if costs go the other way, those increases would be immediately passed on to customers. It's no different than how you might look at the price of a whole variety of commodities.
In terms of electric price comparisons, this next page shows a comparison between Nova Scotia, New Brunswick and prices in New England. One of the things that might be interesting to note is, given the background I come from, if you take a look at our commercial rates, Nova Scotia Power's commercial rate is actually lower than the wholesale price of power - that is without delivery, without transmission, without distribution, just the wholesale price of power bought on the commodity market in the northeast. So our delivered price for commercial power is less than the wholesale price of power in the Northeast United States, and with that I will stop, and I'll be happy to answer any questions.
MR. CHAIRMAN: The format I would like to use, with the will of the committee, is I will open it up for questions, I will recognize one member from each caucus, with a maximum of 10 minutes for each person to ask questions - they don't have to ask - and then, after that, whoever puts their hand up, it's in sequence. Is that fair enough?
The first member to have his hand up was Gerald Sampson, then Michele Raymond and Bill Langille.
MR. GERALD SAMPSON: I have several questions here, and I will try to go through them as quickly as possible. Why, for example, your miscalculation as a result of the Revenue Canada and the decision of the Supreme Court, is that miscalculation being put on us as customers, to pay for the miscalculation? If that rate increase is approved, it puts you in a win-win situation, because the customer is paying the penalty, so to speak.
MR. TEDESCO: First I need to clarify it. It's certainly not a miscalculation. The company, through the actions it undertook, actually protected our customers from those taxes from 1998 through to today. In addition, because of the fact that monies were set aside through a deferral mechanism to pay those taxes, customers will see the benefit of actually paying those taxes at a lower tax rate. Again, the taxes, as I like to say, don't go away, they just change form. In this instance, I would suggest to you that customers have indeed benefited by the actions we've taken.
MR. GERALD SAMPSON: But now you're going to pay the taxes with money you've put in reserve and then charge that to the consumer.
MR. TEDESCO: That's correct.
MR. GERALD SAMPSON: The second one is on emission reductions, and petcoke being burnt at Point Aconi. I understand that petcoke is not even allowed to be used in the United States. Is that true?
MR. TEDESCO: In some parts of the United States that is true, and the reason that we are able to use it effectively at Point Aconi is because of the nature of the type of boiler. It's a very sophisticated design . . .
MR. GERALD SAMPSON: Fluidized bed.
MR. TEDESCO: . . . circulating fluidized bed that is able to capture something on the order of 90 per cent of the sulphur dioxide emissions, and that makes it acceptable. The other benefit that customers see, beyond a substantial emissions control, is very, very low costs. To put that in perspective, today we're paying something on the order of - James can correct me - I believe $1.50 to $1.75 per million BTU for petcoke, and you compare that to natural gas at say $6 or $7 on an equivalent energy basis.
MR. GERALD SAMPSON: Something that I think I already know the answer to, I've asked the other gentlemen in the room here on a prior occasion, but just to reaffirm - is there any possible consideration to burn tar pond waste at Point Aconi?
MR. TEDESCO: Not at this time, no.
[1:30 p.m.]
MR. GERALD SAMPSON: The Wreck Cove capacity - a generating station that I always refer to as the fuel being free because it's supplied by rain and snow. Is there any consideration of getting increased technology, since that was built in the early 1970s, to put a second turbine there? Would there be enough water capacity or a way of having a second turbine to maybe double the output of that generating station with, basically, the fuel being free?
MR. TEDESCO: You've hit the nail on the head. The amount of power that we can produce at Tufts Cove is a function of how much water there is behind the dam, less so than having another generator there. What we try and do on a, literally, hour to hour basis is maximize the use of that facility to the economic benefit of our customers.
MR. GERALD SAMPSON: So you think there's a possibility there to do that? To put a second turbine there?
MR. TEDESCO: Again, I don't think so, given the magnitude of the water resource that exists behind the dam.
MR. GERALD SAMPSON: Finally, I always bring up the taxes that NSPI pay to the province. As you know, the assessment issue has always been front and centre with myself with the low assessed value of Wreck Cove being at $645,000, whereas everybody figures it should be $100-some million rather than $645,000. Is there a move afoot to bring the assessment to the proper market value of Wreck Cove therefore, increasing the taxes that would go to the Municipality of Victoria?
MR. TEDESCO: At this point, we think we're fairly assessed on our facilities. Obviously, increased taxes would not be helpful right now in terms of electric price.
MR. GERALD SAMPSON: No, I understand that, but taxes being what they are and assessment being what it is, if it's assessed at a true value then the taxes are a legitimate cost of doing business. That would increase the share to the municipality, I would assume. Thank you, Mr. Chairman. I have other questions but I'll hold them for later at this time.
MR. CHAIRMAN: Ms. Massey.
MS. JOAN MASSEY: Thank you for coming in today. I have a ton of questions, so I'll just try and stick to a couple of them.
Number one, in your graph on peak demand, why are you out of whack on that by three years?
MR. TEDESCO: Are you referring to why this past Winter it was so high?
MS. MASSEY: Right.
MR. TEDESCO: It was probably a function of at least two things. One, we do have a pretty healthy economy and secondly, we had a very, very unusual cold spell. The combination of those two things really pushed up demand to record levels so we actually had a record one hour peak demand one week and one day.
MS. MASSEY: So this is not something that you see as continuing? It's just a blip?
MR. TEDESCO: We simply can't consider it a blip because, of course, customers expect us to keep the lights on and it was based on that that we went ahead and asked permission and received approval to install the gas turbine at Tufts Cove.
MS. MASSEY: Thanks. I think I may have just heard you mention that you were going to a 25 per cent renewable energy by 2005? And, are you right now at about 2 per cent generation of renewable?
MR. TEDESCO: I need to clarify. Our renewable portfolio in terms of the amount of energy or capacity is roughly 10 per cent of our output. We're looking to increase that by 25 per cent.
MS. MASSEY: So, what actual plans do you have to do that?
MR. TEDESCO: An important component of that is the wind form at Pubnico Point. Another important component of that will be a solicitation for renewable energy that we will do later this year. We expect an additional 60 megawatts. As I mentioned a moment ago, that will be done in three components - there'll be a small component to encourage development at, literally, a residential level through net metering. That is, we will pay the retail price for that power to a residential consumer. There will be a mid-scale, roughly 20 megawatts in that category to encourage local developers to participate in renewable energy. In fact, the company will provide a small incentive that is designed to mimic what is sometimes referred to as the wind power, or WPPI incentive, but save the developer the administrative expense of applying for that. Recognizing a small developer sometimes can't take on those expenses, we'll provide that or substantially equal to the WPPI incentive.
The third part will be greater than 2 megawatts and for that we would expect those are large-scale developments. For each of the categories we would provide pricing that is somewhat analogous to our avoided costs plus the wind incentive.
MS. MASSEY: I guess I would just like to get a little bit more information on the wind. When I listened to you speak I sort of hear a lot of negativity. I don't really hear you being really positive. You're saying they take up so many acres of land, the wind doesn't always blow. We know that P.E.I. is planning to increase their wind power generation from 5 per cent to 15 per cent by 2010, 100 per cent by 2015. Right now, how many actual wind turbines do we have in Nova Scotia?
MR. TEDESCO: I'd have to think about how many we have. Certainly, there are two installed at Pubnico Point, there are two that will be, literally, turned on, I believe, tomorrow that Eskasoni has put in place, in part with our co-operation. There are two that we operate and I think at this point, there should be before the year is out, an additional 15 machines at Pubnico Point.
MS. MASSEY: So if we compare that to Alberta or somewhere that has 261 wind turbines and you were talking about Lingan and if we had to replace Lingan's generation with strictly wind turbines, we would have to put up 300 of these turbines?
MR. TEDESCO: You would probably need 900 to 1,200 to actually replace it.
MS. MASSEY: How much time do I have, Mr. Chairman, a lot of time?
MR. CHAIRMAN: You have not quite five minutes. You're halfway through.
MS. MASSEY: Am I, okay. Instead of decreasing our emissions here in Nova Scotia, in fact, Nova Scotia Power has been increasing its emissions, what specific actions are you going to take to reverse that?
MR. TEDESCO: Next year our emissions of sulphur dioxide will be 40,000 tonnes lower, so a little over a 25 per cent reduction. In addition, I just would also mention that again, personally, I'm very bullish on wind energy. My real message is to be realistic in terms of its expectations of what it can deliver and how much power is actually available, but I think it's an outstanding thing for the province to take advantage of.
MS. MASSEY: I guess when I look at the whole issue of the electricity generation, I get the feeling that you're producing a product and we're hearing a lot of negativity that the onus is on us, we're the ones that everything is falling back on. I think you're the one providing a service, so you're the ones that we should be looking to bring us out of this type of pollution that we're seeing and what have you. So what specifically, I would like to hear sort of your vision or goal, what are you going to do for us? What is Nova Scotia Power going to do for us, the people of Nova Scotia, what are you going to do as far as reducing pollution and moving towards green power? I just feel that you're not really, it doesn't sound to me, going to move forward. I mean it doesn't, that's how I feel in listening to you.
MR. TEDESCO: Okay, fair enough, we can agree to disagree on that point, but very definitely the company will move forward. As I mentioned, we are reducing emissions 25 per cent. We will reduce them an additional total of 50 per cent by 2010 for sulphur dioxide and similar amounts for nitrogen oxides and mercury. In addition to that, one of the things that we are undertaking later this year is something called deliberative polling where we will gather something on the order of between 100 and 200 of our customers and folks in the province and through a rather defined process that is run by a gentleman from Stanford University, seek to hear what Nova Scotians think about emissions and what they think is the best way to handle those emissions and we want to make certain we're building that into our overall thinking and planning processes. So that process right now we would be expecting to end late this year and the output of that will be very, very important to us because the simple reality is that cleaner air costs money.
MS. MASSEY: Well, I guess, you know, I'm trying to see the positive side of this, but when we look at Nova Scotia and we know that our greenhouse gas emissions are now 15 per cent higher than they were in 1995, we seem to be hearing a lot of talk, but I'm seeing a lot of action. Are you working with the government? Does the government sit down with you? Are they looking at drafting legislation to really define targets and goals on the production of energy?
MR. TEDESCO: We have met with the Energy Ministers just recently, in P.E.I., on that very subject. It would be extremely helpful if there was more certainty around those targets because, again, uncertainty limit options and in addition to that, can make achieving those targets much more expensive. The longer we wait is not helpful. So anything that government can do; our pleas is really quite straightforward. Anything that government can do to provide certainty around those targets is essential and we strongly urge a federal approach to this, so that we do not find ourselves disadvantages in comparison to other provinces.
MS. MASSEY: Okay, thank you, very much.
MR. CHAIRMAN: Your time has now expired. Mr. Langille.
MR. WILLIAM LANGILLE: Thank you. Just as a rural customer, personally I'm satisfied with the services I'm getting from Nova Scotia Power. In fact, I'm the only house on a road, which is three-quarters of a mile from the main highway and I have new poles in and as I say, I've never had a problem. However, having said that, was there a move by Nova Scotia Power to increase the rate for rural Nova Scotians over urban users of power?
MR. TEDESCO: Not to my knowledge. Rates are established based on customer class and less on where folks live, so if you're a residential customer in Halifax you pay the same as a residential customer in your area.
MR. LANGILLE: Okay, I just wanted to clarify that point. Also, just for clarification, you mentioned that 17 wind turbines will take 200 acres, that seems like an extremely large amount of acres for 17 wind turbines. Could you just clarify why that is?
MR. TEDESCO: Sure. These are very large machines. Typically the blades might be something on the order of 60 or 70 metres in length. As a result of the turbulence that comes off the back of these blades, it actually causes interference with other machines, so folks try and set these machines in place such that the spacing does not create these, I'll call it turbulent wind which, therefore, costs a loss of energy at downwind machines.
MR. LANGILLE: When you're talking about 200 acres, are you talking a straight line or you talking depth, which way?
MR. TEDESCO: Think of that as a rectangle of about 200 acres in size.
MR. LANGILLE: Also, Nova Scotia Power whose parent company is Emera, what holdings do you have in the United States?
MR. TEDESCO: Our parent, which is Emera, also owns Bangor Hydro, in fact, Emera is the only Canadian utility to have acquired U.S. assets.
MR. LANGILLE: You obviously have a contract to purchase natural gas. How long is that contract in place?
MR. TEDESCO: We have a contract with Shell, and that contract, by its terms, has to be renegotiated this November. I believe it's an eight-year contract, after the first four years we have to renegotiate, which is what we're doing, and as a result of that renegotiation, we're expecting to pay Shell a higher price for the gas we get. Nova Scotians have reaped an enormous benefit from this very favorable contract, and we've used the margin on those sales, or the profit on the sales of gas, to offset the taxes over the last couple of years.
MR. LANGILLE: I realize you'd be purchasing it four years ago at a lower rate and, obviously, in the last couple of years we know that natural gas has spiked. With that in mind, we also know that over here in Dartmouth, that you fire up your generators once in while with natural gas. Why do you only fire it up once in a while? Why don't you consistently use it?
MR. TEDESCO: The way we bring on generations capacity is based on its dispatch cost, so in order to do everything we can to keep rates low, we bring on the least expensive units first and sort of work our way up. The gas-fired units generally are more expensive primarily as a result of the cost of gas today.
MR. LANGILLE: And now with the Bangor Hydro, is it?
MR. TEDESCO: Yes.
MR. LANGILLE: Do you sell your natural gas to your other company, Bangor Hydro?
MR. TEDESCO: No, we primarily sell into the northeastern U.S. to other pipeline or utility companies, or to other marketers of gas.
MR. LANGILLE: So, obviously, this is one of your areas where you have in the past made a huge profit?
MR. TEDESCO: That's right and it's that profit that helped us pay those taxes in 2003 and 2004.
MR. LANGILLE: And now with the spike in natural gas and you're renewing your agreement with Shell in November, obviously, it's going to cost you considerably more. Have you put a figure on that at the current price of natural gas?
MR. TEDESCO: We have and it's part of our rate filing. However, we have redacted that information because we are currently in negotiations with Shell and, therefore, we don't want to tell them where we think it will end up.
MR. LANGILLE: Yes, and I understand where you're going with that at this particular time. The coal in Cape Breton, obviously you're trying to buy coal from other parts of the world to lower sulphur content. There's a bit of a resurgent with strip mining in Cape Breton. Are you going to use Cape Breton coal even if it has a higher sulphur content?
MR. TEDESCO: We would be pleased to consider any local coal and ultimately, I think just as you suggest, it's a question of its environmental attributes and price. Now, one of the things that, in answer to a question earlier, I mentioned there are certain technologies where you can burn these higher sulphur coals cleanly and then the question simply becomes what is the cost of say putting on a flue gas desulphurization system, which you can think of as a large box on the back of the power plant that takes out sulphur dioxide, what is the cost of that combined with say a lower cost fuel versus simply buying a lower sulphur fuel in the first place and if it can be done economically, then we would certainly support that.
MR. LANGILLE: I'm not going to go into Kyoto, I will leave that for somebody else, although I wouldn't mind, but the municipalities, as you know, in Trenton and in the Cape Breton Regional Municipality, they're saying that you people should pay higher taxes although I've looked at your scale on the increase in taxation, what you're paying now. Have you considered the effect on any higher taxes when you applied through the Utility and Review Board for your rate increase?
MR. TEDESCO: The only taxes we are seeking to recover are those taxes that we pay. We're not able to predict what taxes might be and I think that generally, as an artifact of rate making, you cannot recover costs you have not incurred.
MR. LANGILLE: And that's understandable.
MR. CHAIRMAN: The next one on our list is Mr. Parker.
MR. CHARLES PARKER: Mr. Chairman, I appreciate this opportunity to have a few questions answered, hopefully, and I've got a few different things on my mind. I guess I will follow up on Mr. Langille's last question there. I guess coming from Pictou County, the Trenton generation plant there is one I hear quite a bit about, positively and not so positively I guess but, first of all, around the dusting problem or the fly ash that's coming out of the stacks, what are your plans or what are you doing at the moment with that?
MR. TEDESCO: We're currently in the midst of looking at alternatives to reduce the ash emissions from the plant and we're beginning to zero in on a technology that's called a baghouse. This is a little different from another particulate control technology that's called an electro static precipitator. An electro static precipitator charges particles and they get attracted to a plate and collected that way. A baghouse is somewhat analogous to a vacuum cleaner bag only a little more sophisticated, but not a whole lot than that, a very effective technology and we're exploring whether or not that would be the very best solution and we would expect to have that nailed down within the next few months.
MR. PARKER: It certainly has been a problem over the decades really and maybe not as bad as it is in the past. Every once in awhile there's something goes wrong and the town and the county area are polluted with this fly ash, it's on their vehicles, on the siding of homes and, you know, causes real problems, but it just seems especially when something goes wrong, I guess there's a difficulty, but you're working towards solutions?
MR. TEDESCO: Yes, and I think your comments are on target. I mean we know there's a problem there under certain conditions and it's certainly our responsibility to address that. We know there's a problem there under certain conditions, and it's certainly our responsibility to address that, and we will.
MR. PARKER: In relation to that, then, certainly, as has been mentioned, the Town of Trenton in particular has been one of the municipalities that is pushing hard, has been, they're really maybe pushing the envelope on this, but they feel their fair share of taxes is not being received by the town, and if it's not by your corporation, then there are other businesses or other residents in the town picking up the lost revenue.
I believe the taxes you're paying is somewhere around $131 million or something, property tax, is it, or in lieu of taxes in the province? I guess it's the province that decides how they spend that money. I know some of it's going back to municipalities for grants and so on. Any thoughts on changing that system or coming to a fair tax system where your plants are located?
MR. TEDESCO: We're aware of the issue, for sure. The company is currently paying about $32 million a year in terms of grants in lieu of property taxes. From our perspective, the issue that you describe is really an issue between the town and the province to decide how best to allocate those funds. We will pay our fair share; others need to decide how best to distribute them.
MR. PARKER: Based on your assets, do you feel you're paying your fair share now, in the province?
MR. TEDESCO: We do, from a provincial perspective.
MR. PARKER: I will ask another question here around wind power. You've talked quite a bit about it already, but I have some people in my riding, in Pictou West, who are very interested in wind power, and there seems to be more and more interest in it on a smaller scale. Is there a process in place so that individuals can apply to maybe be on-line with you, so they can actually sell their product to you or their generation?
MR. TEDESCO: This solicitation that I described that we'll be doing later this year will provide exactly that mechanism, where folks can, if they wish to put up a wind turbine on their property for their use, then what we will pay them is whatever the retail price of power is at that location. Again, this is for small scale machines under 100 kilowatts. To put that in perspective, a typical household has demand something in the order of 5 to 10 kilowatts, so 100 kilowatts is a pretty good sized machine.
What we're trying to do is encourage that small development for folks who are interested. I would urge anyone who is interested, they can contact the company for information. There are a variety of developers in the province who can be contacted. As well, I would urge them to do some, even modest, monitoring of the wind resource. The reason I suggest that is not knowing what the actual wind resource is at a particular location is a little bit like building a hydro plant without knowing how much flow there is in the river.
MR. PARKER: So, did you say you're going to pay the retail price of the . . .
MR. TEDESCO: For those small scale machines, under 100 kilowatts, we would pay the retail price of power. So basically your metre runs backwards when the machine runs.
MR. PARKER: So then you're reselling that back out to other consumers, again at the retail price?
MR. TEDESCO: Well, we would just add it to our overall supply portfolios, and it would just be mixed in there with all the other electrons that would ultimately be sold.
MR. PARKER: So you're not making any money on that product, you're buying at retail and selling it at retail?
MR. TEDESCO: On that particular one, no. We're just trying to encourage the development of smaller scale wind and I don't know that we would do this on a sustained basis but just to get things jump started, and for the people who supply that scale of power, it's something we're doing.
MR. PARKER: Normally in business, you buy it wholesale and sell it retail, but in this case you're retail to retail.
MR. TEDESCO: Yes, this is just a way of jump starting the business a little bit.
MR. PARKER: As an MLA, from time to time, I've had individuals who call me up and they're in dire circumstances, their power's about to be shut off. Then if they get some money, and if it does get shut off, then they come back and now say they can't afford the cost to reconnect. Can you just give us a little bit of enlightenment on that process? How much notice do you give to a customer, and what is the cost to reconnect?
MR. TEDESCO: Generally I would say that we are certainly not in business to turn people off, and we recognize that there is a segment of our customer base that finds paying their bill challenging. For that reason, we do have programs in place to help them. As well, there are very specific rules and requirements before a customer can be turned off, that we have to comply with. These are established not only in the rate but through the URB. As far as what the cost is to turn on or off a customer, $18.
MR. PARKER: So the reconnect charge is only $18? I thought I had heard it was higher than that. It's certainly stressful and traumatic for a family with three or four children and all of a sudden their financial circumstances are difficult and they just can't pay their bills, including their power bill. To lose their power is a hard thing, certainly for a family. How long a period will you let it slide before you actually send the service man out to cut their power off?
MS. TOWER: Well, I would say we go to great pains not to have to disconnect people and certainly during certain months of the year, we will not disconnect folks. We go to great lengths to get people on payment plans as well that would suit their needs on amounts that are in arrears. I would say it would be different for different circumstances,
depending on when we would disconnect, but we would give several notices before we would actually disconnect. Again, work with them to get a payment plan that would allow them to get their arrears paid off over some period of time.
MR. PARKER: Okay. And, in the Wintertime, what is your policy on disconnect?
MS. TOWER: We will not disconnect in the Winter.
MR. PARKER: Not at all? Just in better weather. Okay. Related to that, is stress that some families are facing. There are many costs out there to bear today with heating fuel and gasoline prices, insurance - you know, just all the costs that families face. Your rate increase that you have applied for to the Utility Review Board is 14 per cent is it? Is it 10 per cent plus 4 per cent?
MR. TEDESCO: It's roughly, it's 8.6 per cent, plus 3.8 per cent is the second component, all again associated with taxes. The other thing I would remind folks, as I say, roughly 60 per cent of our taxes are going to the province and I think it would be realistic to acknowledge that had we not paid those taxes, those taxes would have to have been paid by Nova Scotians elsewhere.
MR. PARKER: So, again, the total of the two is how much residential?
MR. TEDESCO: Residential? Oh, I'm sorry, I was giving you average increase. The residential increases under our original filing, 10 per cent with this other filing it would turn out to be about 14 per cent total.
MR. PARKER: That's what I thought. Is there any other formula you can use in the mix between residential, commercial and industrial to make it easier for residential customers?
MR. TEDESCO: The short answer is yes. That will be part of the discussion that we will have during the technical conference. There are some parties that have suggested that perhaps residential rates should be even higher to discourage increasing demand. I'm not sure I support that position. However, there are a variety of interests in these proceedings, everything from large customers to commercial customers to residential customers to low-income customers and the goal really is to strike the best balance amongst those classes.
MR. PARKER: Yes, 14 per cent is going to be difficult for some, especially low-income families. I guess my time's up, I may have a chance to ask some more after.
MR. CHAIRMAN: Okay, now Mr. Glavine.
MR. LEO GLAVINE: Thank you for being here today to answer some of the MLAs questions. First, in terms of power rates, yes, an increase is currently before the URB. When I look at the mix of how our generation is produced here and I look at gas going to increase even further from where it is now. Coal is, again, costly because we're requiring that it's burned cleaner to produce electricity. Aren't we looking ahead to very ominous times in terms of the fact that we are now one-third highest in the country, but aren't the prospects pretty dismal for Nova Scotians if we look down the road 10 years?
MR. TEDESCO: No, I don't think so at all. I mean, if you look back to the Arab oil embargo in 1974, we were challenged with high energy prices and Nova Scotia made a decision to get off oil and to burn coal because it was viewed at that point in time as a lower cost and a much more reliable supply. I think we find ourselves confronted with a very similar decision today, but for different reasons. The reasons today, people want reliable and inexpensive, but now we want to add clean to that equation. There's little doubt in my mind that result can be accomplished. As I said earlier, one of the things we're very, very interested in is the actual and meaningful opinions of Nova Scotians as to how that result should be accomplished.
MR. GLAVINE: I mean, you are in the business of producing electricity, making a profit for your company which is good business. However, do you see, especially here in Nova Scotia where we don't have that much currently in terms of renewable energy, do you see conservation as something that your company has an interest in?
MR. TEDESCO: Absolutely. In fact, part of the reason on the very first graph I showed you where there's that dash line below the solid line, is the amount of demand side management that we do and directly control. So this through our interruptible customers. In addition, we have from time to time - and we will be again, very shortly, reminding people about the benefits of using energy wisely. I often like to say to folks that when you see demand increasing that way and people are asking what's causing that, part of it is a function of our own society and our own perspective of convenience, cost and this sort of thing - and what I'm specifically referring to is, if you look at your own homes, I call them hidden night lights, like your instant-on television, your cordless telephone, the pager you plug in every night, the cell phone you plug in every night, the VCR that's blinking at you. All of those things are consuming power while they're plugged in. These are choices that folks have made, in many instances, as a matter of convenience. There are alternatives to those technologies as well as there are alternatives to reducing energy demand.
MR. GLAVINE: Looking at that whole area of renewables and so on, is tidal power in any way on the radar at this time? I'm familiar with the one plant in the Valley, in Annapolis Royal, but is there anything in that area, or is it simply now so costly for Nova Scotia and Emera that it's not an option?
MR. TEDESCO: Well, our experience with the Bay of Fundy would suggest that there are probably better economic alternatives than the further development of tidal power, and I would certainly put wind well ahead of that, at least for Nova Scotia. Wind continues to be very promising and, whether or not we can get our arms around other forms of renewable, I would suggest that for the most part, hydroelectric resources are fully on tap.
MR. GLAVINE: One other question, if I may, Mr. Chairman. One of the recent developments of your company was to one source the clearing of the transmission lines by, I guess, one company only, for the province? You've given one contract out, in other words, to make sure that the transmission lines are clear of trees and brush and so forth and I was just wondering, will that actually end up meaning that there will be less preventive maintenance and even put the province in greater danger for the aftermaths of something like a hurricane, an ice storm, or something of that natural disaster nature? I'm just wondering where that is going to take us as we look ahead.
MR. TEDESCO: Okay, the contract that we've let will save us, this year, about $.5 million and a little over $1 million next year. As a result of those savings we actually expect to trim at least as much, if not more, than we are currently trimming. The effect of trimming trees is important in terms of ensuring reliable power that has to be balanced against the aesthetics that trees provide. Often that's a challenging situation to deal with, but under any circumstances the folks who will actually be doing the physical work are Nova Scotians, and we're strongly encouraging that the company subcontract to other Nova Scotian companies; in fact, I've met with those companies personally for that purpose.
MR. GLAVINE: Along that line, in terms of trimming it is obviously good preventive work. How does the company currently regard the state of the infrastructure, the delivery system that we have here in Nova Scotia, and at what rate are you renewing and so forth? I guess, first of all, just a comment on the general state of our infrastructure.
MR. TEDESCO: As I look at reliability over the last several years, it was one of the first things I looked at when I came here, and I'm happy to report it's substantially improved since privatization. I would tell you the same thing about our customer service rating.
In terms of investment in the infrastructure, the point you raise is a very critical one because, again, we're in a business where when people flip the switch, they expect the lights to come on. So making sure that the infrastructure is in the right condition is of paramount importance to us. What we try to do is optimize the result that we get for every dollar we invest. On the one end, you don't want to goldplate the system because it produces no value; on the other end, if you under-invest in the system then you would expect to see deterioration in things like reliability.
MR. CHAIRMAN: We will now go to Gary Hines.
MR. GARY HINES: I just have a couple of questions. Hurricane Juan - I think I want to go to Hurricane Juan. First I want to make a comment. As an MLA in my area, I have a suburban/rural area, and I was totally satisfied with the service that we got from all those involved in EMO. One of the reasons I think I was satisfied is because I come from a background where I understand the situation, I understand that it's not practical or sane to keep resources, both staffing and equipment, that you would need to respond to an emergency. I think that was one of the problems that we had in response from those who were not familiar with the type of work that you do.
I was perfectly satisfied, and I would like to comment on Mr. Thompson and Mr. Hogg. When I had extreme emergencies and I had the occasion to make several calls, and the response I got from them was absolutely phenomenal, and I just want to pass the comments on that I had from residents in respect to those issues that they helped me deal with. That being said, you have a majority of recommendations provided by NSPI being implemented. Some simply don't work in Nova Scotia. What are those?
MR. TEDESCO: First, I appreciate the comment and would be delighted to pass it on to our employees, the compliment. In terms of the specific recommendation I was referring to, this notion of amassing a large crew in advance. When I say large, we're talking about quadrupling the resources that we had available. What this does, while it sounds very attractive in terms of, well, wouldn't you have more people, the issue is (a) can you manage it, and (b) does it produce a better result?
When we do restoration, it's not unlike triage in an emergency room. The first thing you want to do is deal with the transmission system, then the substations, and then you get to the distribution system. The slow going or, as we sometimes say in the trade, the hand-to-hand combat is dealing with those individual services at individual houses. That's why I say if we had this huge staff of people, we would have probably tripled the cost of storm restoration but we could have probably lopped off two or three days on the back end of the storm for about 5 per cent of our customers. So that's why we don't think it makes sense.
MR. HINES: I thought that was what you were alluding to. One of the things that happened during Hurricane Juan that would be a compliment to your staff, when you would call in and ask when we could expect hookup and so on, I know staff tried to be as honest as they could. Sometimes I think you would have been better off if you had exaggerated and said what might be five days is going to be 10. You were criticized constantly for the other scenario whereby you believed that you could do it in five days, but then you would come with a shortage of equipment or that kind of thing and it would cause the opposite effect. If you had, right upfront, said it's going to take 10 days and then power was restored in five, you would have eliminated that part of the public comment that was negative.
Underground systems - the Halifax Regional Municipality is presently doing long-term infrastructure planning. Are they negotiating with you on a regular basis regarding making underground services in new development something that they would like to have implemented?
MR. TEDESCO: If I could just back up to the first part, because I want to acknowledge, and I agree with you that with regard to Juan one of the take-aways and lessons learned is to do a better job with communications and establishing customers' expectations. The reality was it was a storm of historic devastation and proportion. So perhaps in the desire to get power on quickly, folks were perhaps more optimistic than they should have been. Having said that, we've learned that lesson, too, with regard to undergrounding. We have had conversations with a variety of developers to underground services and at this point we continue to be happy to underground so long as the developer pays the cost of undergrounding. Typically you would expect to pay somewhere between five and 10 times the cost for overhead service to put wires underground.
MR. HINES: One of the other things that I noticed that we constantly do, I know in the Halifax Regional Municipality in particular, when we re-tree a lot or a new development, we tend to put the trees directly under your power lines and I have no idea why you can't do a setback, or the developers can't be required to do a setback when they're doing tree line re-establishment. They will constantly put them, little six footers, underneath your power lines to become a problem 10 to 15 years down the road.
MR. TEDESCO: Also a good point and one of the things we try to do is encourage folks, particularly if it's a new development, to put certain types of species under those lines which tend to be lower growing, as one way to deal with that. A second way to deal with it is to work very closely with the developer in terms of where those lines are physically sited.
MR. HINES: And the third scenario that happens constantly, you're dealing with in the municipalities, and those elected to municipalities don't always understand construction scenarios. They don't realize that if you're in the construction business, you're swinging excavators and equipment and so on, they think you go in and drop that line in in a four foot right-of-way. So I think there has to be more of an education process on the part of your line crews in establishing the lines to indicate that when you're trenching, you have to have your proper slopes in your trenchings for cave-in and so on and you have to have room to work that equipment because most of the council table I sat at didn't understand that. So it posed a problem as to, you know, it gets reflected out to the taxpayers that you're the bad guy. So that's just a suggestion of something you can do.
Let's go to Kyoto. Kyoto is something that is totally misunderstood and interpreted by everybody individually the way they would like to see it interpreted and the key words that come are ratification and compliance. You touched on something that I don't know a whole lot about other than I know it exists and that's the protocol not yet approved in Russia
whereby you can trade credits and so on. I think that makes it very difficult for any country to stand up and say, look, I can meet Kyoto compliance when really you don't know what you're complying to. Can you give us some background in layman's terms that's going to explain compliance in relation to ratification?
MR. TEDESCO: Yes. What I was referring to with regard to Russia were two points, first, that they had not yet ratified the Kyoto Treaty and as a result the Kyoto Treaty has not taken effect, but the second part is Russia's interest in ratifying the treaty which appears to be changing based on recent pronouncements from Mr. Putin and what that appears to us to be about is that Russia has discovered it has an awful lot of so-called CO2 credits from industries that have shut down and this sort of thing. What that may well result in is billions of dollars leaving the province and Canada in general to go to Russia to pay for these credits. So I'm urging people to think carefully about that whole dynamic with the amount of money that would move out of the province and out of Canada.
MR. HINES: Thank you, that's all.
MR. CHAIRMAN: Ms. Raymond. (Interruptions)
MS. MICHELE RAYMOND: My questions fall in several areas and thank you very much for coming to speak to us. One of my first questions actually is about distribution and storage capacity. One of the things I know you're very, very well aware of, of course, is an ongoing sore spot with the municipalities, is the grants in lieu process. I don't know whether your distribution system is isolated in such a way that you're able to have a relationship with the municipalities that does at least guarantee them sealed or preferential distribution of any kind. Has there been any consideration of a mechanism like that?
MR. TEDESCO: I think under our tariffs, we are by Statute prevented from discriminating amongst classes of customers. So I would say we probably would be unable to do that unless I misunderstand your question.
MS. RAYMOND: Yes, okay, and not so much at the statutory level, but at the physical level, I mean, you could, in fact, be using a sealed distribution system or at least I'm
thinking in terms of the emergency situations and so on. Could you at least guarantee a municipality of preferential availability, if not a preferential rate?
[2:15 p.m.]
MR. TEDESCO: It is possible to provide what I'll call higher reliability. Typically, the way that is done, it's very important that the electric system be inter-connected because if this end fails and there's a loop, you can serve it from the other side. Typically it's designed that way.
There are circumstances, whether it be on a municipality or a customer basis, because there's a very strong need for highly, highly unusually highly, reliable power wherein you can undertake installation of certain technologies that will provide backup power virtually instantly. In some instances, at relatively modest cost, in other instances, significant costs. So it can be done. It's just a question of money.
MS. RAYMOND: Okay, I'm just wondering whether there has been any element or might be any element of negotiation with the municipalities without a change in structure.
MR. TEDESCO: I'm not aware of anyone that has approached us for such a thing.
MS. RAYMOND: That pretty well deals with the distribution question. Renewables, of course, are the other thing that interests everybody. You've talked about increasing your portfolio as I understand it so that by 2005, it'll reach 12.5 per cent of your current portfolio.
MR. TEDESCO: Yes.
MS. RAYMOND: I've just gotten this so I don't know what the projections are after 2005.
MR. TEDESCO: We're hoping, I think, to move up to something on the order of 20 per cent, I believe, by 2010.
MR. JAMES TAYLOR: The next stage would be to take it to 2010, an additional 2.5 per cent. That was discussed during the Electricity Markets Governance Committee work. Beyond that, we see from a non-dispatchable point of view, so wind generation, which you actually can't control - it is only controlled by the wind. In a system such as Nova Scotia Power, that is connected simply through New Brunswick and not well inter-connected otherwise. That may be a maximum of 20 per cent is what we could see in the province. That would be accomplished over the following decade if this program stays in place. So, there would be up to 15 per cent and then another 5 per cent up to a maximum of 20 per cent, that's what we see right now.
MS. RAYMOND: Okay. Prince Edward Island is - I realize it's a far smaller province and so on, but I assume it's not much better connected physically than Nova Scotia.
MR. TEDESCO: The advantage that P.E.I. has is, first, outstanding wind resource where they're looking at capacity factors for their wind turbines. In English, what this means is the capacity factor is how much energy can the machine produce in comparison to its rated output which is a function of how often the wind blows. In P.E.I. they're looking at capacity factors in excess of 40 per cent, which for wind energy is extraordinarily impressive. Here in the province we're typically more in the 30, 35 per cent range. As well, P.E.I. has a much
smaller base that they're working over so when they make an addition on a percentage basis, it has much greater impact.
MS. RAYMOND: One of the other things I was wondering about just at the very small level is the domestic customers. Now, I've heard that turbines are individually very, very expensive - are you looking at all at providing design services or making turbines available for these smaller projects? I realize that you're just trying to give some impetus to the entire technology here, but have there been any kind of, sort of make it simple kits?
MR. TEDESCO: What we're trying to do through the solicitation is make it as simple as possible for one very important piece of the equation and that is, what is the energy worth to the customer and make it as simple as possible for those folks to attach to our system. Again, there are just details, but important details. For example, if the power is out, but the windmill is turning, we need to isolate that electricity from our system because we don't want to have a line worker electrocuted because they think the system is dead and yet this machine is putting power in. That would happen with any local generation, it doesn't matter that it's necessarily wind. Any local, small scale . . .
MS. RAYMOND: I'm guessing the insurance, the domestic insurance would be wild.
MR. TEDESCO: No, not necessarily. It's a simple thing to do and we're trying to make it as simple as possible for people to have that information and the developers and the people who sell these machines understand that. It's just a very important detail.
For folks who are interested, I would urge them to just contact people who are in the business. Nova Scotia Power will not be in the business of actually selling these machines. We are in the business of buying the output as a way of encouraging renewable development.
MS. RAYMOND: Two other quick questions, do I have time?
MR. CHAIRMAN: Five minutes.
MS. RAYMOND: Great, okay. One of them actually is on the topic of, just very quickly, the underground wiring thing. I understood that during Hurricane Juan, the underground wiring in downtown Halifax was actually subject to flooding. Is that true?
MR. TEDESCO: Underground wiring can, in this case, yes, I believe that's true in parts. Sometimes even with flooding it can be okay, but, like anything, there is no totally foolproof system. What you do is you basically reduce the odds from different events.
MS. RAYMOND: I keep hearing about the electrocuted dogs in New York or something, by underground wiring, I guess. Is there any kind of concern around that?
MR. TEDESCO: Interestingly enough, we actually looked at that, given the nature of the industry, there was a situation in New York City several months ago where a women walking her dogs was electrocuted because somehow a manhole cover became energized. That caused us to take a pretty careful look at our system, and given the way our system is designed and other safeguards, we think it's not a concern. In the case of Consolidated Edison where the accident occurred, the bottom line was, procedures appear to have not been followed for a particular type of insulation.
MS. RAYMOND: I guess it was not unique. I guess that's something that has happened in the past with the Con/Edison.
MR. TEDESCO: It's pretty rare, but it can happen.
MS. RAYMOND: The other question that I had and this is very quickly, you talked about deliberative polling and you also talked about not having, this may not be fair to ask you because it's applicable to all sorts of other industries, but since you brought it up, you talked about gold-plated construction and it sounds a little bit like gold-plated consultation. What exactly do you expect this to cost and what are the real benefits of that, given that you're dealing in effect with legislative constraints?
MR. TEDESCO: In comparison to the investment that may be required to reduce emissions, I would characterize the costs of deliberative polling as relatively de minimis. Most important, and this, by the way, is meant to be a very open process where, hopefully, we'll have participation from the media and others. What we're really seeking to do is to provide Nova Scotians information about the alternatives they have, not just from Nova Scotia Power, we'll be part of it, but as well as other stakeholders, folks from the renewable sector, folks from the low income sector, folks from the industrial sector, just a whole variety, call them subject experts, to try and raise the level of knowledge about this issue in the room, and then have these folks, given the knowledge they have from these experts, attempt to suggest what they believe to be the very best solution for Nova Scotia. Again, I would draw a little bit of a parallel, perhaps not as sophisticated, to what the province went through during the oil embargo.
MS. RAYMOND: I realize it's hardly fair to pick on you with this one because it's a typical thing to say that polling is perhaps as much about input of information as it is output.
MR. TEDESCO: I think it's both ways and again recognizing an investment and recognizing that investment will show up in customers' bills, we feel it's paramount that they not only have some say but recognize what the trade-offs are in arriving at ultimately a decision.
MS. RAYMOND: Okay, thanks a lot.
MR. CHAIRMAN: Mr. MacKinnon.
MR. RUSSELL MACKINNON: Thank you, Mr. Chairman. A few little questions. First with regard to the topic that we have here today, it's focusing on rural economic development programs. One thing I've been particularly interested in is the elimination of the Rural Electrification Act, when Nova Scotia Power was privatized back in 1992. Could our witnesses today give us some indication, they can take it on notice, the total number of kilometres of electrical service transmission lines that have been installed either for businesses or residential in rural Nova Scotia for the 10-year period prior to the privatization and post-privatization?
MR. TEDESCO: Okay, why don't we get back to you on that, I wouldn't even attempt to hazard a guess off the top of my head. I will say this though, that for anyone say seeking new service, again, there is no discrimination between a rural area or here. The company provides a certain amount of line for no charge, and beyond that the customer would pay - it's the same literally anywhere.
MR. MACKINNON: But when Nova Scotia Power was a Crown Corporation, the service for the first mile beyond an existing service would be installed - I don't know if you would say free of charge, but in kind of an investment-type perspective from Nova Scotia Power's point of view, if there were to be three residential dwellings constructed within that first mile.
That does not exist anymore, they now have to pay for that up front, and that has put quite a kink in rural economic development - residential development as well. I'm looking for some indication, because I heard my colleague for Colchester North indicate how satisfied he was with the service - but he's the only one on a long, lonely road receiving service, and I'm sure there are many other locations in rural Nova Scotia if the Rural Electrification Act, or the parameters of that, were still in place, we would see greater development in rural Nova Scotia.
I believe it's one of the major factors that has contributed to the urbanization of Nova Scotia, to the extent that there is a deficit outside of metro and it is having an impact. I believe that since that was part of the topic here today it would be, I believe, important to get some measure as to what the impact of that change in legislation has meant to rural Nova Scotia.
MR. TEDESCO: We will try to take a look at development pre and post as best we can - of course, some of that will be influenced by socio-economic and other demographic patterns but just the same, we can provide you the information.
MR. MACKINNON: If you could provide that detail, I think it would be very important. Also, I noticed the rate of return for the common shares seem to be running at about $1.12, $1.20. Correct me if I'm wrong, is that running at around a 10 per cent rate of return?
MR. TEDESCO: Our rate of return this past year was roughly a little over 10 per cent, about 10.4 per cent, I think. The year before that I believe it was a good deal less.
MR. MACKINNON: What is the rate of return on Bangor Power?
MR. TEDESCO: Inasmuch as I don't run Bangor, I don't think I could tell you off the cuff, but I think its allowed return, is probably quite similar to ours. Again, I would just emphasize that the words . . .
MR. MACKINNON: Is that a guaranteed rate of return?
MR. TEDESCO: No. That's where I was going - allowed return means opportunity to earn up to that amount, not guaranteed profits.
MR. MACKINNON: I notice Nova Scotia Power or Emera has interests in Maritimes & Northeast Pipeline, correct?
MR. TEDESCO: Yes.
MR. MACKINNON: It has interests in Maine Yankee Atomic Power Company, correct?
MR. TEDESCO: Only indirectly through Bangor Hydro.
MR. MACKINNON: Maine Electric Power Company, Inc.?
MR. TEDESCO: Yes.
MR. MACKINNON: Greyhawk Gas Storage?
MR. TEDESCO: Yes. I think that one we are unwinding, but yes.
MR. MACKINNON: Intragas Energy?
MR. TEDESCO: Can't help you there.
MR. MACKINNON: I'm raising this because . . .
MR. CHAIRMAN: Do you have shares in all those, Russell?
MR. MACKINNON: No, I don't have shares in any, I passed up the opportunity . . .
MR. TEDESCO: No, these are unregulated subsidiaries. I run the regulated business, so I'm not familiar with all the details of the unregulated.
MR. MACKINNON: No, the point I'm leading to is I have a concern about this proposed rate increase for consumers and businesses in Nova Scotia. I read some of the recent newspaper articles with opinions from the Canadian Manufacturers Alliance, Mr. Smythe, and so on. They feel that some of these corporations are at a breaking point, that it would be cheaper for them to go to other provinces than to stay here, or to other jurisdictions. What feedback have you received from such large stakeholders as Bowater Mersey and the Canadian Manufacturers Alliance and so on?
MR. TEDESCO: Certainly the larger customers compete generally in an international arena, and so they are very sensitive to everything from tax increases to labour costs to energy prices to world material prices, and to the extent that there's an increase in any of those it's of concern to them, again because they're competing in an international arena. The power that we currently sell to Bowater and to Stora, under the agreement we have you simply could not purchase wholesale power for less than that in the United States. So it's an extremely attractive rate designed to keep them here. So while we would prefer not to be increasing bills, the pressure that taxes are creating on our rate structure is necessitating that.
[2:30 p.m.]
MR. MACKINNON: Maybe if I could focus on that as well, but just before I get into that, with regard to the Kyoto issue that was raised, the Premier of the province, our present Premier, approximately two years ago mused about the fact that if we were to sign onto the Kyoto Accord, as presented by the federal government it would mean power rate increases of upwards of 29 per cent in Nova Scotia just on that one issue and now we're looking at an application for approximately 14 per cent plus or minus. Where does this whole equation end up at the end of the day? There's only so much Nova Scotia consumers can pay.
My sense is that Nova Scotia Power or Emera, its parent company, is spreading its wings which is great from a corporate point of view and expanding and increasing our presence on the international stage, but at what price? The people of Nova Scotia I believe are starting to suffer because Nova Scotia Power, i.e. Emera, is just getting a little too gregarious on the international stage with all these investment portfolios.
MR. TEDESCO: I would respectfully and strongly disagree.
MR. MACKINNON: I suspected so.
MR. TEDESCO: I think certainly the new home grown opportunities that have come about as a result of privatization have benefited Nova Scotia. I would certainly point to the contract that we have with Shell as a primary example of that as well as improvements in safety, reliability and customer service. The performance of those companies is unrelated to what Nova Scotia Power will or will not seek in terms of its rates. Nova Scotia Power's rates are driven solely by its costs that it incurs and one of the things I would be very pleased to inform you of is that the costs that Nova Scotia Power controls, since our last rate agreement in 2002, have actually declined by about $0.5 million in 2005 in that application. So that's inclusive of salary increases, material increases, and other costs. So the costs that we've controlled, we've done an extremely effective job of in terms of managing our costs. Taxes, on the other hand, increasing our costs to $79 million is simply something we need to deal with.
MR. MACKINNON: Has the provincial government given any indication that it's prepared to forgo the additional revenues for the sake of the consumers in Nova Scotia because it would be an unexpected windfall for the provincial government obviously?
MR. TEDESCO: Sorry, I'm missing the question.
MR. MACKINNON: Well, this additional tax bill, you know, as a result of the Supreme Court decision where it dismissed Nova Scotia Power's request to allow $150 million in income tax deductions between 1998 and 2002, obviously, that will have a positive impact for the Nova Scotia Government on the revenue side. Has the Nova Scotia Government given any indication to Nova Scotia Power that it is prepared to forgo this unexpected windfall for the benefit of consumers?
MR. TEDESCO: Not that I'm aware of.
MR. CHAIRMAN: I guess we'll go to the second round now and Mr. Gerald Sampson is on the list.
MR. GERALD SAMPSON: Mr. Tedesco, I'm sure you're here for a specific purpose and to do a good job and I feel your impact already since you've been here, the short while you've been here. You've got a product that you want to sell, we all have to have it, but the amount that we need depends upon what we can afford and I'm going to go to a specific issue in my rural area that I represent. Three-phase power is on one side of the Barra Strait Bridge. On the other side of the bridge is a new school, Primary to Grade 12, which is going to be built this year. On the other side of the bridge is going to be a proposed aquarium which has had numerous studies done, money spent and professional involved in the development of this aquarium which would be an international drawing card - we also have the Highland Village on the other side of that bridge. Because of the $350,000 cost to run the three-phase
power across that bridge, it's not going to be done. Therefore that stifles any economic development, that school will not have three-phase power, therefore there will be severe limitations put on the development there and any future rural economic development in and around that area.
As somebody involved in sales for years that, to me, is a choice opportunity to put the power in there, make an arrangement that the school board and the area can maybe pay out over a long period of time. You are going to lose an opportunity to sell a lot of power just by running it across the bridge and the cost it detrimental to the future development there. I'm just wondering, are you aware of that or is there any possibility that that three-phase power could go ahead? As my colleague mentioned about rural economic development, it seems if that were, of course, we have a bottom line and we understand all that but somewhere along the line somebody has to play the sales game and say, I think that's a pretty good investment and yes, it's going to be over a long period of time, but we will get our money back, let's do it. Is there any kind of an incentive like that that you would consider doing? You have present construction and you have future plan construction, so I'm sure between that there would be a positive return on the investment.
MR. TEDESCO: I would very definitely consider that and as well, I thought I heard you mention, would we be able to spread out payments. My answer to that would be yes, to make that able to jump over the hurdle, absolutely, that's something we would consider.
MR. GERALD SAMPSON: So I can inform the people in charge of that project to contact yourself or your officials. Thank you very much.
Now hopefully, I will get the same positive answer here. When I asked you about the burning of the tar ponds sludge you said, not at present. I previously heard, absolutely not, and today I heard from you, not at present. Can you expand on that?
MR. TEDESCO: I can say that it is not on my radar screen period.
MR. GERALD SAMPSON: Okay because you made several references to Hurricane Juan . . .
MR. TEDESCO: No, I don't want to mislead you. No, I don't see it on in the future.
MR. GERALD SAMPSON: Because the meetings I attended, Hurricane Juan would be a breeze compared to the firestorm some of these people - they were definitely prepared to break the law and I don't want to see them go there.
MR. CHAIRMAN: Mr. Sampson, one more question.
MR. GERALD SAMPSON: Yes, Mr. Chairman, a short snapper. Wind farms. Kelly's Mountain, Cape Smokey, Cape North, North Mountain, French Mountain, MacKenzie Mountain - all those mountains on the Cabot Trail. Any tests, any data on that, of the possibility of putting windmills down there?
MR. TEDESCO: Most of the wind monitoring that I'm aware of has generally been coastal.
MR. GERALD SAMPSON: That is an extremely coastal and high-mountainous area.
MR. JAMES TAYLOR: On the north shore, along Grand Etang, Cheticamp, we have quite a bit of wind-test data. We have none in the Highlands, we have wind-test data at Eskasoni, up on the side of a hill, I wouldn't call it a mountain, so those are areas for future possibilities, we don't have data there right now.
MR. CHAIRMAN: Mr. Chisholm.
MR. RONALD CHISHOLM: I guess I just want to go a little further with what my colleague across the way has talked about with three-phase power, rural areas, economic development and how tough it is in some areas.
I represent Guysborough County and the Eastern Shore. We don't have any major big business, we don't have all the things Mr. Sampson was talking about he was going to get, if he could get three-phase power. We do have a lot of small business, aquaculture sites and that sort of thing. I'm dealing with one right now that he wants to do an expansion and the cost of getting three-phase power into his plant is approximately $50,000. I'm in the process now of meeting with the aquaculture people at the Department of Fisheries and as well, people in the Energy Department.
Do you people have anyone on staff who could work with us to try to - I wouldn't say form a committee - but attend a meeting to explain the process that we have to go through? If there is any benefits, like Mr. Sampson said, a long-term payment plan and that sort of thing?
MR. TEDESCO: I would say, yes, we absolutely have people who can help. I would add, in my experience, where previously we were running, for example, gas mains and there were certain customers that wanted gas and thought it would create competitive advantage for them. Yet, given the amount of pipe that had to be put in the ground versus the return that we were looking at, we could not make a go of the project. What we found over time is that these were terrific opportunities for the company to partner with government to defray or offset some of those costs for the overall economic well-being of the town. It's obviously a business that is more viable, that is healthier, may have more employees, may pay more taxes and it sort of takes care of itself.
I would be delighted to work with the town to see if such an arrangement could be made to . . .
MR. CHISHOLM: This is just a small company that's in Country Harbour in Guysborough County, Country Harbour Mussel Farms. They're employing 25 people right now in that area and they're kind of quietly going about their business. They have to do an expansion, they're having a problem getting ice to operate the facility - they have to travel down to Arichat, Cheticamp, wherever they can get ice, they're getting it. Now, at this time of year with the crab season on, most of the ice is pretty well taken up with the crab fishery so they're having some difficulties.
In a more larger expansion as well, the ice plant is just one part of it. They now employ 25, there could be upwards of 50 people working at that facility if we can get three-phase power in there. The three-phase power now is approximately two kilometres from the main line. The estimated cost is about $50,000. I'm not sure that's an accurate estimate - I think one of your employees just went down and had a look and said what it's going to cost.
But, if there is somebody in your company that we can get to work with us, we'd certainly appreciate that. If I had the name, I'd pass it on. I think I have the meeting on July 7th and I think some of the other caucuses have been invited to that meeting with aquaculture and that was on my agenda to bring up at that meeting - the three-phase power.
MR. TEDESCO: Have you got a card or you could leave me a phone number? I'll make sure someone catches up with you tomorrow.
MR. CHISHOLM: Sure. Very good. The other issue is the coal handling facility in Point Tupper. When will that be up and running? Is that close?
MR. TEDESCO: It's under construction right now and it should be available to begin taking some ships late this year. In terms of unloading - I'll call them non-automated ships that are not self-unloaders which would require a crane - that would be in place, we expect the crane will be in place probably late first quarter, early second quarter of next year.
MR. CHISHOLM: Okay, thank you Mr. Chairman, that's all I have.
MR. CHAIRMAN: Ms. Massey.
MS. MASSEY: I have two little things I want to bring up. First of all, a couple of quotes that I just found. They're very interesting and I thought I would highlight them this morning. There are simply no other fuels as cheap and as available as coal and petroleum coke. Also, coal is the fuel of our future, not just our past. Do you know who said that?
MR. TEDESCO: It sounds like my boss. I would agree with that. I think the reality is that, again, for realistic energy pricing for some of the reasons that were mentioned earlier, I do see coal as part of our future. I also see us having to burn coal more cleanly and I also see renewables coming into the mix.
MS. MASSEY: One of my colleagues was talking about Kyoto and that it hadn't been ratified, but I think we all here know that in 2001 our Premier did sign the New England Governors and Eastern Canadian Premiers Climate Change Action Plan. Under that action plan there were some goals that were set out - one was to reduce regional greenhouse gas emissions to 1990 levels by 2010 and in the end to reduce regional greenhouse gas emissions by 75 to 85 per cent in the long term.
I'm wondering - when I listen to all the conversations gone on here today - how our
Premier could say those things when Emera has those other kinds of thoughts, you're going down the road of producing more emissions instead of less, and I'm just wondering, I'm assuming that there was a lot of consultation that went on before the Premier went and signed that kind of agreement, that he knew that was a doable thing with our power companies here in Nova Scotia. Am I right?
[2:45 p.m.]
MR. TEDESCO: I think at the time that he entered into it, as well as here in the province, assumptions were made with regard, for example, to the price and available of natural gas. As I indicated earlier, those assumptions have been proven to be wrong on two counts, first, its availability and, second, its pricing, which is at least double what was assumed at the time. The combination of those factors has led to some of the things I've mentioned today, and why it is so important, at a federal level, to address this issue, to establish rules and to review these targets to ensure that the country generally and the province specifically can implement and achieve those goals without putting ourselves at economic disadvantage to the rest of the world.
MS. MASSEY: You said earlier that Nova Scotia has reaped enormous benefits from selling our natural gas, but we've also reaped a lot of negative benefits by selling that natural gas instead of burning it here, specifically at Tufts Cove, when we have children and adults being diagnosed with asthma, and that our rate of asthma diagnosis in Nova Scotia is over 10.2 per cent, I believe, now, which is a lot higher than the Canadian average. I will end with that comment.
MR. CHAIRMAN: Mr. Parker.
MR. PARKER: A couple of other short snappers. Radio license fees have been in the news lately, and I think it's Nova Scotia Power that it was determined that there's 10 years of service provided but you weren't billed for it. What amount of dollars are we talking there, and what are your plans in that regard?
MS. TOWER: We had an agreement with the province prior to, and that survived, privatization, as all of our agreements did, that called for the payment for these radio towers to be the forgiveness of electricity. In certain instances, and we did pay as was called for, as we requested to be on new towers, meters did not get changed over, as an oversight. So we are going back and looking at those, and doing an estimate of what we owe the government. We've been talking to the Department of Transportation on that.
MR. PARKER: Any rough idea of what kind of dollars the bill would be?
MS. TOWER: It's certainly below $100,000.
MR. PARKER: For the 10 years?
MS. TOWER: For the 10 years, because we did pay for most of the towers or at least half of the towers, and then some of them for different periods of time. So it's a matter of going back and finding out when we went on certain ones and when meters should have been changed over. There certainly were payments made on at least half of the towers.
MR. PARKER: So the balance outstanding, is that an obligation you feel you have, or is it something that the onus is on the province to come to you to negotiate on?
MS. TOWER: As I said, we've been working with the Department of Transportation and Public Works to determine what that amount is. Certainly, we've been in contact with them, and we are going back. Our records don't go back as far as 1992 easily, so we have to do a little bit of work to actually get at those records, but we are doing that and we are working with them to determine the amount.
MR. PARKER: Again, is it an obligation you have or is it something that you want to negotiate with the province?
MS. TOWER: I think we would feel that we, erroneously, did not change those meters over and it would be amounts that would be owing.
MR. PARKER: You feel obligated to pay. Okay. Do I have time for one more?
MR. CHAIRMAN: I think we will move along, we're trying to get to everybody. Mr. Glavine.
MR. GLAVINE: There are many sources of electrical generation here in Nova Scotia. Obviously hydro is one of them, but we don't have a great percentage. Has there been full exploration of the potential of hydro, or are there any small systems that could still be tapped into here?
MR. TEDESCO: We believe that the largest scale development is, as I said earlier, fully on tap. There may be instances where there may be a couple of megawatts here and there. In fact, we, ourselves, are looking at that in terms of operating some of facilities, if that opportunity exists, as well there may be other developers that would see some opportunities. Again, they would be smaller. I don't want to create the impression there's a huge amount of hydro development left in the province.
MR. GLAVINE: I remember when I built my first home, the radio jingle was, live better electrically. Would you still promote that to Nova Scotians in light of everything that is going on, and with the view and the vision you have for your company?
MR. TEDESCO: Without hesitation. I think if you look at electrical power, it is a fact of modern life. The convenience that it provides, if you think in terms of say a residential bill of $80 or $100 a bill or $3 a day, plus or minus, and compare that to the price of a cup of coffee or a litre of gasoline, and what it delivers in the way of lighting, convenience, heating, refrigeration, running your computer, et cetera, yes, I would say the same.
MR. CHAIRMAN: Anybody else? Charlie, a short snapper.
MR. PARKER: You buy power and you sell power on the grid, across the Maritimes and into New England and perhaps it goes far beyond that, I'm not sure. And also you're planning to build a new - is it a 45-megawatt plant, or you're getting permission to build it here in metro?
MR. TEDESCO: Yes, it's under construction at Tufts Cove.
MR. PARKER: Under construction, okay. Is that for export or is that for domestic use or both?
MR. TEDESCO: No, that is exclusively for domestic use, largely driven by, as I said, the event we experienced this Winter with a sharply higher demand than otherwise would have been forecast.
MR. PARKER: And it's natural gas?
MR. TEDESCO: It's natural gas-fired, that's right, and it sits next to a second natural gas-fired turbine as well on the very same Tufts Cove site.
MR. PARKER: But in the off-season or the Summertime, you'll be exporting power as well, you don't have as high a demand, I suppose.
MR. TEDESCO: Yes, what we would look to do, in order to maximize the value of our assets to our customers and our shareholders, recognizing that Nova Scotia Power is a Winter-peaking company and much of the northeastern United States, by way of example, is Summer-peaking, we will sell power into that market and use those profits to hold down prices.
MR. CHAIRMAN: Mr. Sampson, a short snapper.
MR. GERALD SAMPSON: In the vein of live better electrically, any possibility of discounts for those people who are all electrically serviced, totally relying on electricity? (Interruptions) I just thought I would throw it out. I know the answer before I asked it, so let's ask something serious. Why is it that Nova Scotia Power pays their taxes to the province instead of to the municipalities where their facilities are located?
MR. TEDESCO: As I understand it, as part of privatization that was the agreement that we entered into.
MR. CHAIRMAN: Maybe if I could, with the approval of the committee, I have a short snapper on that $150 million in income tax deductions. The rate increase that Nova Scotia Power is seeking, because we're talking about tax issues, there's also going to be the HST on top of that as well, correct?
MR. TEDESCO: Let me think about that - yes. In other words, if there are additional taxes on top of . . .
MR. CHAIRMAN: So the consumer will be paying a tax on a tax, three times.
MR. TEDESCO: Yes, and presumably the government would be receiving that income.
MR. CHAIRMAN: The provincial government.
First of all, I would like to thank our representatives. This was very information and helpful, and, if you wish, some closing remarks.
MR. TEDESCO: First, this has been very helpful and interesting to me, not only to hear very specifically about some of the issues that our rural customers face but, also, I sincerely appreciate the opportunity to be able to share some of our perspective on these issues, as well as the challenges that we, as a province, collectively face. I think the more that each of us knows about the energy industry and the province itself, the better informed we
are and the better decisions we make and the better we make life here in Nova Scotia. So, our sincere thanks for the opportunity.
MR. GERALD SAMPSON: Mr. Chairman, could I just throw out a thank you before we come to an end? I had the personal opportunity to require another meter, to have my government office changed over completely to Nova Scotia Power, and I was treated exceptionally well just this past week, from the gentleman who came to hook up the power to the customer service people down there. I've mentioned that gentleman's name before, you said I said it twice before, anyway it's Mr. Paruch and I was treated exceptionally well, and the service was second to none. I just wanted to throw that out, because we're always ready to point the finger, but I just wanted to take a minute to pass the compliment along. That was a personal example. Thank you very much.
MR. TEDESCO: Thank you, that was very kind of you to say.
MR. CHAIRMAN: Is that a plea for patronage? (Laughter) On behalf of all committee members, I would like to thank each and every representative from Nova Scotia Power for coming and being forthright in your answers. Perhaps on a future day we will have you back for future deliberations.
The next meeting is going to be Tuesday, September 28th and our witnesses will be the Forest Products Association of Nova Scotia. The time is 1:00 p.m. until 3:00 p.m. With that, I'll certainly entertain a motion to adjourn.
HON. MEMBERS: So moved.
MR. CHAIRMAN: Okay.
[The committee adjourned at 2:56 p.m.]