HANSARD

Printed and Published by Nova Scotia Hansard Reporting Services

Mr. John MacDonell (Chairman)

Hon. Barry Barnet

Hon. Karen Casey

Mr. Patrick Dunn

Mr. Sterling Belliveau

Mr. Clarrie MacKinnon

Mr. Wayne Gaudet

Mr. Leo Glavine

Mr. Harold Theriault

In Attendance:

Ms. Charlene Rice

Legislative Committee Clerk

Scotian WindFields Inc.

Mr. Barry Zwicker, President

Nova Scotia Power Inc.

Mr. Rob Bennett, Executive Vice-President

Revenue and Sustainability

Mr. James Taylor, General Manager

Environment Planning and Monitoring

Mr. Gerald Weseen, General Manager

Communications and Public Affairs

HALIFAX, TUESDAY, OCTOBER 23, 2007

STANDING COMMITTEE ON RESOURCES

9:00 A.M.

CHAIRMAN

Mr. John MacDonell

MR. CHAIRMAN: It is pretty near 10 minutes after 9:00 o'clock. Mr. Zwicker from Scotian WindFields is here and I'm just wondering if we should start with the first presentation. Then when Nova Scotia Power comes, maybe by the time Mr. Zwicker gets underway - I'm just thinking, we have a quorum and what do you think?

Generally, Mr. Zwicker, what we do is introduce ourselves and then you do the same for recording purposes and then the floor is yours. I think probably what we'll do is, assuming that Nova Scotia Power will be here, we'll let them present and then we'll ask both parties questions.

[The committee members introduced themselves.]

MR. BARRY ZWICKER: I'm Barry Zwicker, the President and CEO of a company called Scotia WindFields and thank you for the opportunity. I've got a tendency when I do presentations to kind of wander a bit and rarely do I actually put things down in writing. So this morning what I thought I would do is at least have some speaking notes that I could refer to and if I start to wander a little bit, please feel free to rein me in.

MR. CHAIRMAN: We may not know that.

MR. ZWICKER: Well, true, true. Knowing that the timeline was roughly 10 minutes I tried to condense a fair bit of material in that 10 minute time slot to give you an overview of who we are and what we're all about and what we see for the future.

Let me start by telling you that Scotian WindFields is actually a fairly newly-activated company. It has been on the books for a few years, but it got activated in January of this year. It got activated as a result of community companies called CEDIFs. There are eight windfields within Nova Scotia that cover the geographical area, the entire geography of Nova Scotia. Six of the eight are actually set up as CEDIFs under the government's Community Economic Development Investment Fund Program, the other two are currently in the process of that. The two that are in the process are the one that covers the Guysborough area and the one that covers Cape Breton. The other areas are covered by very active CEDIFs and some of them have been around since the year 2000 and some of them are brand new.

Now within that group, currently the last count that I had, which was about two weeks ago, there are in excess of 500 Nova Scotia families that are shareholders in these CEDIFs. There is a new round of meetings that are going to be held, one of which had actually started last week in Halifax and they'll be working themselves around the province.

It is an amazing turnout that we're having with these groups and what this is showing is the great concern that Nova Scotians in general have toward our environment, have toward the way we generate electricity, and are totally and honestly concerned about our future, to the point that these people are actually putting up their personal funds to see change. By personal funds, I mean that all of the shareholders in Scotian WindFields Inc. are either shareholders through these CEDIFs - and the only way they become members of that is to invest their own money, which makes them eligible for equity tax credits and they can use some RRSP money. There are a fair number of people who actually use their RRSP money to invest in CEDIFs. There is another group of individuals who are shareholders within the CEDIF group, such as myself, who believe in the venture and we needed to bring in some individuals beyond the CEDIFs to capitalize this company to do what we wanted to do.

If you appreciate that the Scotian WindFields Inc. side of this has only been around since technically the end of January 2007, I want to run through for you some of the things that we've been doing since that time period. I hope you will get the same sense of the advancement that we've made in the relatively short period of time that we've been active. I think probably the first thing to do is to hit a half dozen points that have come up every time that we've had a meeting either as shareholders of Scotian WindFields Inc. or community groups along the way. These are kind of the six main ones.

The first one is that Nova Scotia needs to not only reduce its reliance on fossil fuels for the generation of electricity, but we have to do it sooner versus later. There are things that we should be doing now and not waiting.

We need to make the transition in a fiscally responsible manner while assisting the environment.

We need to be respectful of our neighbours when we're considering projects.

We need to work with folks in our traditional resource industries to help make them more viable, that really being farming, forestry, and to a lesser extent but still applicable is fishing.

[9:15 a.m.]

We need to develop educational programs to assist the general public - and in the general public, I have in brackets here Anne Murray and her crowd would fit into the general public - to better understand the positive impacts of renewable energy and in particular wind energy.

Finally, that wind energy is considered to be the current technology that can allow Nova Scotia to efficiently move from fossil fuels to renewable resources; tidal, wave and water current technologies. We have tremendous potential in this province for that. The technology needs to go through some serious advancement - it is probably 10-plus years away before we're going to actually see a serious amount of electricity generated from that source, but it is clearly a huge opportunity for us.

The focus of Scotian WindFields Inc. - maybe by its name alone - has definitely been on the wind side. Our incorporation is set up so that we can deal with any form of renewable energy introducing that into Nova Scotia and while the CEDIF part of our family is focused on Nova Scotia, Scotian WindFields Inc. in its incorporation is not focused solely on Nova Scotia. We have been dealing with opportunities in Prince Edward Island, in New Brunswick and as recently as yesterday, Newfoundland and Labrador. There are lots of opportunities for community-based organizations and that's how we explain to everybody why we are different from a lot of others - the fact that our shareholders are truly the community of Nova Scotia. In order to be a shareholder of this company, you must be a resident of Nova Scotia to be eligible for any of the CEDIF opportunities that come along and when you look at the broad base of where our shareholders are coming from, we have a tremendous geographical coverage across the entire province.

Since January, we have assembled through lease option agreements, more than 5,000 acres of land to be utilized for wind projects. These lands are currently being used by farmers in the cattle farm business, for cash crops, blueberry harvesting, forestry is a big one and we have a number of individuals who have just been holding land for years that now want to see it used in some positive way. I can tell you through our Web site and through our 1-800 number there is not a week that goes by that we do not have three or four additional people calling or writing us, wanting us to assess their land for consideration for some kind of wind project.

The general fear that you might hear about people in wind projects really isn't there. The majority of the people see the benefit, understand that there are concerns in terms of how you locate and position these things, but see the long-term and short-term benefits.

Since January, we have actually responded to the Nova Scotia Power RFP, we have proposed two sites within the province, we have partnered with a company, outside of Nova Scotia but within Canada, that is a large wind farm developer. Being a relatively new company we needed some expertise, we needed some very deep pockets and the most important thing these days is that we needed access to turbines. Anybody who is in this business knows that the waiting time for turbines can be as long as two years now. We have managed to partner up with a company that has a guarantee of turbines that we can meet the requirements of Nova Scotia Power if we're selected through this RFP process. So not only have we organized, we have people onside, we've been able to do that in a fashion that allows us to properly respond to the RFP.

The interesting thing, I think, that we've done is we have been involved with so many - I'm going to call them - kitchen parties, living-room discussions, back-deck discussions, little town hall meetings all across the province, talking to people about renewable energy and talking about how they can get involved. We are spending a significant portion of our annual budget to deal with educating average guys within Nova Scotia. I think that is shown in the response that we get on a weekly basis from people calling us to come and see them, come and see their land, come and talk to them about the opportunities.

In addition to the initial prospecting that we have done through our partnership company for the RFP, we've put up 10 met towers around the province measuring wind in the significant areas that we think are good. We have just recently - and this is not through our partnership, this is just through Scotian WindFields - acquired five additional met towers, and these are relatively small dollars. They're $20,000 apiece to acquire them, they're $10,000 apiece to put them up, and we have a waiting list that if I had 30 of them I could have them up today to go in and properly farm and explore where the wind regime is and where it is good and in places where we aren't going to necessarily be in people's backyards.

As part of our public relations side, I guess, we have recently hosted a special private showing of Leonardo DiCaprio's The 11^th Hour movie. I can tell you that none of the people around this table were actually invited but there were some politicians who were invited and showed up. There were a number of interested people around different corners of Nova Scotia who showed up, we had a full house. We had a great discussion afterwards, a little wine and cheese, to talk about what this movie was all about, what Nova Scotia can do.

The only disappointing thing about the whole showing is that we had issued 26 tickets to various people within the media, no one decided to show. I suspect that's because there was probably no bad news to report. The reality is there was good news happening that night and there was no shock treatment coming out of this. There was good, solid discussion about what Nova Scotia can do to remove its tie to fossil fuels and move into the 21^st Century and become a leader not only in our country, but in the world.

Nova Scotia has a huge resource in Nova Scotia. What we thought our fish was for many years, well, our wind is there and there are a number of people around this province

who are looking at how we properly harness the wind without negatively impacting our people and make it not only a positive environmental impact for us, but a hugely positive economic benefit. I don't think you can underscore what that economic benefit is going to be in the coming years.

I also want to talk to you about a couple of myths with respect to wind energy, and it disappoints me every now and then when I see our Minister of Energy talking about how we can't depend on wind because the wind doesn't blow all the time. Well, it's true, the wind doesn't blow all of the time, but the reality is that in Nova Scotia we have the second or third best wind regime in the country and we have opportunities in terms of our geographic distribution around this province where I doubt that a day goes by that the wind isn't blowing somewhere in Nova Scotia.

Secondly, the technology is there today in a number of different forms to actually use wind energy to store power so that when the wind doesn't blow to the level that we need, we draw on the storage.

We're currently working with a company out of Vancouver, a great Canadian company that has the technology that we believe we're going to use on two of our projects to basically store energy at the times when the wind is blowing and we're not using the peak power off the turbines, so we can continue to provide power to our clients when the wind doesn't blow.

We're dealing with another company, again out of Canada, this one comes out of Alberta, that is dealing with some underground storage of energy that it is probably three or four years away in terms of being a real viable solution. But that, coupled with the battery, coupled with the news article that I think you may have seen last night about using wind energy to pump water for hydro, the technology is there to firm up wind when the wind isn't there at its peak. We should not be afraid of it from that perspective.

There will never be a time that because of the wind not blowing Nova Scotians will be without energy. It's a false fear that's out there that should be removed.

The second thing, I think, is the NIMBY syndrome, that basically says, you know, turbines make noise and they can be a blight on the landscape. Well, I would question anybody who knows anything about how we generate electricity or power, to look around and see how we do that today and tell me if those things don't generate some noise, if they don't generate some emissions and if they don't create some kind of a blight on the landscape. I don't know of any form of energy that you can produce, in the volume that we need to power a province, that isn't going to have some kind of an impact. It's a fact.

The reality is that you have to understand how to position these things, you don't put them in people's backyards, you don't cluster them so that they're in a straight line so that the noise amplifies and maybe aims at one or two people, and get used to the fact that we're

going to start seeing them on the landscape. It's a far, far better improvement, as far as I'm concerned, to be able to see wind turbines on the landscape than to continue to see stacks that are 300 feet high with emissions coming out of the top of them. I don't care how you compare it, that's the reality.

When it comes to looking at impacts, impacts for the most part are all relative and you have to look at one in relationship to the other. We all have to make decisions and the toughest thing that you folks have to do, as politicians, is to make those tough decisions. Every now and then you're going to make those kinds of decisions and some people are going to be upset. The vast majority are going to be positive with respect to the advancement of Nova Scotia moving further and faster on the renewable energy track, there's no question, from the perspective that we have in terms of dealing with people across the province.

I put down four or five things that, if I understand the makeup of your committee, that I think you could have some influence on to make this transition quicker and more positive. The first thing, I think, is that you need to get to your Crown lands folks and you need to get them out of their dark clouds about the utilization of Nova Scotia's Crown lands. We have a huge holding of Crown lands in this province, some of them I understand exactly why we have them in terms of their preserves and they are to be protected and to be kept away from. There are huge areas of Crown lands that we have used for forestry and if we've been able to use them for forestry, surely to goodness we're able to use them for wind turbines.

If you walk in the door of the Crown lands office today and tell them that you'd like to talk to them about utilizing some of their lands for wind turbines, they will turn you around and face you out the door and say, oh, come and talk to us in five or six years. That's exactly what they talked to me about five years ago, so now it's a 10-year time horizon and not a five-year time horizon. I think the government needs to take some position on the Crown lands and properly assess which lands are suitable and acceptable and make them available. Not only is it the right thing to do from the environmental point of view, there's a huge revenue capability there for the province to start receiving revenue as a result of wind farms being placed on Crown land, just as the people that we currently have leased will see revenue to support their farming and their forestry business. There's no problem with the province getting some revenue out of this. I think this can be a win-win situation.

We're currently involved with two environmental assessments on our two projects that we've put forward to Nova Scotia Power and if there's an area there where I think the province and the federal government can have a positive impact, it is allowing environmental assessments. We all know how important those are, stop taking them back to ground zero every time we go to a site. There have been enough wind farm developments in the country and in the world to understand generally how they should be done and understand generally what the impacts are - positive and negative - but every time we go to a project and every time we start, we now start at ground zero.

There needs to be some statements from the government that basically say, from a big picture environmental-wise, we support renewable energy, we support wind energy over going ahead and building more thermal plants and more dependence on fossil fuels.

With just those basic, positive statements to come out, it sets the tone for what environmental assessments are supposed to be all about. Anybody who is in the wind farm business knows that we've got to set back from brooks, we've got to set back from sensitive vegetation areas, we want to keep off real steep slopes, we want to keep off areas that are highly susceptible to erosion - everybody knows that. We know that we should stay out of wildlife habitat that is sensitive and the wildlife that are being protected.

If you totalled that all up in Nova Scotia, I don't think you'd hit 10 per cent of the province what would fall into that sensitive category - not 10. If it was more than that, we would be protecting a whole lot more land than we currently are, from any form of development. So that leaves us 90 per cent of the land - if you take out the developed portion of the province, you're down to 70 per cent of undeveloped land within the province that is capable of handling wind farms. We need to make some positive steps in assisting wind farm developers to go through this, and maybe I should say in particular community-based ones. In general, all of them.

I think, in reviewing your minutes before coming here today, for the last couple of meetings that you've had and seeing some of the discussions that you've had with respect to the pork industry, generally farming and in particular forestry, with some recent announcements about how you deal with things like the effect of the perfect storm and how that's negatively impacted, and I think it's good to see those kinds of actions taken. One of the solutions to help these folks out is to guide them along the line and give them the opportunity to look at renewable energy for using part of their lands.

I know from the farmers we're talking to - and particularly one group that is down in the Antigonish County area where their farming is marginal at best, they are barely making ends meet from year to year - these fellows are looking at, in a very conservative manner, the number of turbines that we could put on their site that will be able to keep them in farming. They'll be able to do what they want to do and be productive and not have to worry every single year that they can't make payments.

[9:30 a.m.]

This kind of wind energy opportunity, while it has minimal impact on the land after it's constructed, allows farmers, blueberry farmers, forestry guys, to continue their business and simply receive additional revenue while we're supplying our energy grid with renewable energy. It is a positive, positive impact all the way around.

My next item here has to deal with Nova Scotia Power. I don't have the schedule here but I think this one is a positive one, actually, I think that the province really needs to work

much closer with Nova Scotia Power. I think the province has to stop these threats of fining them $0.5 million a day if they don't meet their targets. For one second I do not believe that there would be one fine ever paid. I would just love to be able to sit at a URB hearing - and I've been to hundreds of them over the years - and listen to the discussion in front of the URB about why our rates have to increase because the province is fining them $0.5 million a day because they haven't met their targets.

The reality here is that the province and Nova Scotia Power and companies like ours need to work together. We don't need to be controversial, we don't need to be adversarial in a lot of this stuff. We need to find co-operative ways to work together. If I was running Nova Scotia Power, I'm not sure that I would be doing it any different than they are doing it today because they have different business objectives than I may have.

The reality is that I think the opportunity is there for them to work with community-based organizations like us, let us achieve the lion's share of this renewable percentage that we know that we can provide, and we can provide far in excess of the requirement that the government is currently putting on power generators in this province to get away from fossil fuels, so we know we can do it. We've tested the resource enough to know, we've tested the market enough to know that we can do this in a very viable and economical way today, and that it isn't five years away, it is today, so we know we can do it.

My last comment has to do with deregulation and I think anybody who is in the energy generation business would agree - wouldn't it be nice if we had further deregulation? I don't really see that happening - to the level that would suggest that anybody who produces power has the right to sell it to somebody - in the near future. If that was to happen, that would be a pretty positive, aggressive step on behalf of the province.

In lieu of that happening, I think one of the very positive steps that will be looked upon as a positive step is to raise the net metering cap that's presently in place. There's a 100-kilowatt cap so that if you put up your own power generation, you can get this net metering effect, but it's only done for one year. Each year your meter is reset and there are lots of businesses out there that I know would do that tomorrow, but they all utilize a little bit more than the 100 kilowatts that has the current cap on it. So if there's an opportunity to look at raising that cap to some level, whether it's one megawatt or two megawatts - I don't know what the magic number is, but I know 100 isn't enough, because 100 is just barely there for very small businesses to be able to put in a system and potentially recover their investment, but over a fairly long period of time.

If the cap was raised to allow for further investment in that area, I think you'd see a lot more businesses taking advantage of it, which means it is their capital dollars, it's not ours or yours or Nova Scotia Power's, for that matter, in terms of installing these systems.

So in conclusion - I think my 10 minutes are probably there, maybe a little bit more - again I appreciate the opportunity to come and speak to you. I hope you know a little bit more

about us than you did before I got here and if there are any questions that I can answer now or a little later on, I'd be more than pleased to do so. Thank you.

MR. CHAIRMAN: Well, thank you very much, Mr. Zwicker. Yes, I think there probably will be some questions. We're going to let the three gentlemen from Nova Scotia Power - Mr. Bennett, Mr. Taylor and Mr. Weseen - make their presentation and then there'll be some questions after that. So thank you.

Good morning, gentlemen. I think for your benefit I'll have the members of the committee introduce themselves again. Then I would ask you to please do the same and then you can start your presentation. I'll certainly give you as much time as Mr. Zwicker.

[The committee members reintroduced themselves.]

MR. CHAIRMAN: I want to say that Minister Barnet was here and left between introductions, so I don't know if that means he's just a shadow or if it's a shadow Cabinet, but he'll be back.

MR. ROB BENNETT: Good morning, Mr. Chairman, and members of the committee. Thank you for the invitation to meet with you this morning. My name is Rob Bennett. I am the Vice-President of Revenue and Sustainability with Nova Scotia Power. With me this morning is James Taylor. James is our General Manager, Environment Planning and Monitoring, and also Gerald Weseen, who is the General Manager of Communications and Public Affairs. His responsibilities include government relations.

For the information of the committee members, I have just returned to Nova Scotia from a number of years with Bangor Hydro in Maine, where I was most recently the President and Chief Operating Officer. Just to say as an aside, it's nice to be home.

In my new role at Nova Scotia Power I'm responsible for driving continued progress on renewable energy and conservation, as well as customer service and commercial relationships. The invitation to speak with the committee today referred specifically to renewable energy so I thought it was important for me to be here and introduce myself.

I don't have extensive opening remarks, but I thought it might be helpful to offer a perspective on where we are today, which could aid in the discussion of where we need to be in the future. Part of our legacy in relation to electricity production in the province is coal. Decisions were made a generation ago for reasons of energy security, as well as economic development, to generate electricity using a plentiful, indigenous fuel.

In our province, our customers, our businesses have all realized a tremendous value from those decisions made years ago, but clearly there is a need to bring a new and cleaner generation aspect to our generation portfolio while ensuring that we maintain reliability, while we're also mindful of the costs to our customer.

Today, Mr. Chairman, about 11 per cent of the energy generated in Nova Scotia in Nova Scotia Power comes from renewable resources. Over the past 15 years, all new generation added to the Nova Scotia Power system has been either through cleaner burning natural gas or renewable energy. At the same time, we've moved to reduce emissions from our legacy fossil fuel plants. Since 2005, for example, Nova Scotia Power has reduced sulphur dioxide emissions by 25 per cent. That total is fully half of the sulphur dioxide emissions realized by the entire energy sector in Canada.

We have also significantly reduced nitrogen oxide emissions with the installation of new technology. In terms of renewable energy, we have more than 40 wind turbines now operating in the province and they generate 60 megawatts for the system. That is more installed wind capacity than any other Atlantic Province, so we would agree that there is a tremendous opportunity for wind capacity development within this region.

As members of this committee are aware, we're about to award contracts for more renewable energy based on a call for proposals issued earlier last year. That request was for 130 megawatts of additional renewable capacity and, in fact, I believe that we will be issuing letters of intent for significantly more than 130 megawatts.

As required by provincial legislation, all of this generation will be developed by independent power producers and the projects will be in service in time to meet the renewable energy standard target for 2010. The contracts that Nova Scotia Power will let as a result of this process will generate hundreds of millions of dollars of investment in the province, in addition to providing us with a new, cleaner source of generation for our customers.

We are also very excited about the potential for tidal power energy in Nova Scotia. Nova Scotia Power has secured $4 million in funding from Sustainable Development Technology Canada for a demonstration project with a partner, Open Hydro, of Ireland. They develop and manufacture in-stream tidal power generation systems. We are in a position to access those funds as soon as final decisions are made by the province in relation to tidal development in the Bay of Fundy.

Mr. Chairman, there is clearly a need to look at every option that we have, in terms of renewable energy development in the province, in ways that improve our reliability and provide the maximum amount of value for our customers.

Some of these options we clearly understand, such as energy efficiency and conservation. Perhaps new options, like bringing energy in from lower carbon footprint generators in neighbouring provinces like New Brunswick or Newfoundland. Perhaps there is true, realizable potential in the Bay of Fundy but those opportunities need to be quantified both in terms of capacity and environmental impact.

Mr. Chairman, Nova Scotia Power is looking at all of its options. We know that these are questions that the legislators are examining as well. Sustainable prosperity means our province needs to be environmentally healthy; it means we need to work on all levels to improve health and well-being of the residents of the province; it means a strong economy. All of these issues are linked and the utility has a role to play in helping to achieve the goals that our province has set for itself.

In terms of our power system, Nova Scotia Power has been investing in improvements, both in terms of what we call storm hardening, which is particularly important, as we know, at this time of year. In terms of storm hardening the investments in the transmission and distribution system are improving the performance overall and we are also making environmental improvements in our generation facilities.

Nova Scotia's annual capital spending program to upgrade and improve our system is well over $100 million a year. This year, and for the next two years, additional money is being invested and allocated specifically to make reliability improvements to our power system, both in terms of vegetation management and the priority replacement of certain equipment.

In terms of performance, Nova Scotia Power is proud to be the safest utility of its kind in Canada, which is attributed to the more than 1,700 employees who work in our company. Last night in Newfoundland and Labrador, the Canadian Manufacturers and Exporters Association announced that our company was chosen as a recipient of the 2007 Innovation For Safety Promotion and Safety in the Workplace Award.

We are a very efficient operating company - four of our individual generating units and three of our generating stations have recently been recognized among the most efficient in Canada in a review conducted by the Canadian Electricity Association. Again, this is a tribute to the great people that we have working at our company and what they do to provide our customers with the best value possible.

In closing, regarding the topic that led to our invitation here, there is clearly more to do in terms of renewable energy and environmental sustainability. We know that the government expects it and know that our customers want this and expect us to take a leadership position in that regard - in fact, we expect it of ourselves as a responsible commercial entity in Nova Scotia. We're listening and I hope today in our further discussions we will be able to show you that we're taking action on these renewable issues that are before us.

Thank you very much for the opportunity to be here today and I will be happy to answer any questions that the committee members may have.

MR. CHAIRMAN: Thank you, very much. I just wanted to introduce Minister Barnet, who has rejoined us. Mr. MacKinnon, you are number one on the list.

MR. CLARRIE MACKINNON: Mr. Chairman, first a question to Barry Zwicker. I know that some municipal units are looking at bylaws and certainly in Pictou County, the municipality has come in with a bylaw which I think they've done some good work on in finding middle ground in relation to opposition and advancement at the same time.

[9:45 a.m.]

I'm very, very excited about what you were saying today because I think we're looking at something in the order of 50 possible sites in Pictou East in my riding, so this is good news to me, although there is opposition in some areas. Do you envisage more bylaws coming in that may, in fact, be restrictive by some municipal units?

MR. ZWICKER: The short answer is yes. We have spent some time working with Pictou County on their proposed regulations and I think, like you, the regulations that they've put in place are fair and reasonable. Obviously, there needs to be some form of regulation, I think. If there is anything negative that came out of the Pictou County process it's that they happen to be a county that doesn't have a planning strategy, doesn't have a land use bylaw, but for whatever reason they chose to start that process around wind energy regulation. It started off by suggesting that maybe there is a big problem here and we need to jump on this right away. In fact, when I went into meet with them that wasn't really the issue - the issue was they wanted to put a system in place that facilitated wind energy while protecting their residents.

I was very encouraged when I went to meet with the warden and CAO the first time and then we helped them through some aspects of that regulation. I think they have a good bylaw and I don't know if there are any wind developers in the province that should have a problem with that.

MR. MACKINNON: If I may continue with other questions. In relation to the Trenton generating facility, generator number five, we're looking at $45 million being spent there - $30 million in relationship to a bag house system and $15 million in general upgrades. Is that a good investment to be making at this time?

MR. BENNETT: Yes, we believe it is and it has been approved in conjunction with the work that we do with the Utility and Review Board. The bag house, as well as the additional investments in environmental controls and a new generator will extend the life of the plant obviously, as well as allowing the plant to operate in a more diversified manner in relation to the other plants in the province and improve the economics of our operations overall. It adds flexibility to the operations of that plant.

MR. MACKINNON: Mr. Chairman, I'm glad to see that something is being done there because Hillside is in the shadow of the stacks there and certainly there has been a lot of concern and Hillside is in my riding as well. I'm glad that the system is being corrected and I want to go on the record, of course, as being appreciative of the expenditure, but I'm

wondering about extending the life of that and I think you're looking at perhaps another 15 or 20 years, are you not?

MR. BENNETT: I'm afraid I don't have the specific expectations of that plant available to me today, possibly James could answer that question.

MR. JAMES TAYLOR: What we've done is we've evaluated the economics around its original fully depreciated life, which would be 2014, and also the economics out to the end of that decade, out to 2020, both business cases are positive. The unknown and the reason we approached it was two business case lives - the unknown around carbon dioxide and the federal and provincial government regulations on carbon dioxide and how those will evolve over the next few months to a year and more will be known. We wanted to make sure that this investment could be recovered over a very short time and over a longer time as well.

MR. MACKINNON: One very brief additional once, if I could. The going rate, Barry, is sort of $3,500 per year, per wind turbine?

MR. ZWICKER: Per megawatt installed. Are you talking about the rental, the lease rates?

MR. MACKINNON: The lease rates.

MR. ZWICKER: Yes, that's generally true.

MR. MACKINNON: So it works about to be about $3,500 per wind turbine, does it?

MR. ZWICKER: No, not per wind turbine, per megawatt nameplate installed. The turbines can be 1.5 megawatts in size as an example, so it's going to be $3,500 plus $1,750, whatever that ends up being.

MR. MACKINNON: Okay. Because people in Pictou County are talking about the $3,500, but it's based not on . . .

MR. ZWICKER: Not every developer's lease is probably the same. Ours is based on a per megawatt basis and/or a percentage of the revenue, whichever is greater, so there is an opportunity for it to be more than that for the landowner.

MR. MACKINNON: That is good news for a lot of rural people. Thank you.

MR. CHAIRMAN: Mr. Belliveau.

MR. STERLING BELLIVEAU: Mr. Zwicker, the question I have is more just an observation. You talked about the wind as a natural resource, and I noted your comment that

the wind is like we thought our fishery industry was. I just want to clarify that our fishing industry is very strong and it still is a very important industry.

I also want to make note of my background - I came from Barrington Municipality and spent nine years there. The last three of four years of that I spent with council putting together a land use bylaw regarding wind energy. I think we were one of the first across Nova Scotia and my question indirectly is, how many other municipalities are out there who have done this?

You also made reference that the least resources again were fishing and the coastal communities - it may have the least impact on this particular industry and I question that. Looking at the wind regime that I observed, the best advantage points naturally were the peninsulas or the coastal communities around our shorelines, they looked like the best places for wind which naturally is the home of many fishing ports. My observation is they go hand in hand and that area that we all want - I guess like real estate, location, location, location. I guess my question is, there is some concern about migration of birds and their flight paths and the question I posed at the time, has there been a study to determine where the migration flight patterns of these migrating birds stop and the wind regime starts? If you follow my line here, there are going to be some very good vantage points near the coastal communities and peninsulas that come out into the ocean and where the pattern of the migrating birds doesn't encroach on that.

MR. ZWICKER: If I start back at the beginning, my background is also municipal government. I've been in municipal government on the staffing side of it for 20 years before I got into the consulting side, so I do have a little bit of knowledge on the planning side. In fact my background is in planning, from a professional point of view.

There are a number of other communities in the province that are in different stages of looking at regulations to regulate and enable wind farms to go forward. Some of them are taking it from a positive aspect that we want to facilitate, others are taking it from a negative impact that we don't want it in our back yard, which isn't really healthy and that's where I think the province needs to come out and make some positive statements, that this is the way we're moving and provide some positive direction there, not to allow that negative aspect to fester too much longer.

My comments in terms of minimal impact on the fisheries - and I identified the fisheries because quite honestly, one of the best wind regimes that we have in the province is offshore. If we go a little bit offshore, the wind is there, it is constant. I just fear that if I put all my eggs in one basket and say we're going to start putting turbines in the ocean, it might be another 20 years before we get a turbine up. I'd rather work on getting through the process of getting on the land first and then consider the potential of putting them offshore. The coastline of Nova Scotia is, by far, the best location but we have lots of other locations where the wind may not be as strong as it is on the coast, but it is still very viable.

I think you can see that from any of the projects that you may have seen announced recently. The Minas Basin proposal to build 100 megawatts for their own use on Canoe Lake is just about the centre of the province. The wind regime there is considerably less than what it is on the shoreline but clearly it is strong enough for them to go forward with that project. The wind regime that we have in the middle of our province in a lot of cases is greater than most of the places in Europe that have been dependent on wind energy for the last 25 years. They would die for the wind regime that we have, particularly along our coastlines and inland. So our entire province has got, generally speaking, good wind regime. Some areas are better than others.

On the migratory birds side of things, there is no easy answer to that because if the birds fly this way this year, they might fly that way next year and nobody can tell the birds where to go, is what it amounts to. The interesting part, if you look at some of the studies that have been done with respect to migratory birds, there's very little evidence that wind turbines, once they're erected, actually have a negative impact on migratory birds. I suspect that if you talk to the people who have been assessing the Pubnico facility - and I'm not going to say I suspect, because I have talked to them - they don't have any evidence of impact of bird kill as a result of that wind farm. It is a 17-turbine wind farm, sitting out on a point - it's probably not right on a path of a migratory bird line, but there are lots of birds there.

We're looking at some sites that we know are close to migratory bird habitat and we're trying to stay on the edges of that, if you like. The evidence just isn't there to support the fear that by putting wind turbines up we're going to detrimentally affect the movement of migratory birds. At the same time, if you know that it is a known path, then stay away from it, I guess, and that's the approach that we're trying to take.

MR. BELLIVEAU: I just have a follow-up question to Nova Scotia Power. Again, my observation of your potential pilot project in the Bay of Fundy appears to be concentrating in the upper bay. My observation is that the Bay of Fundy is one of the natural wonders of the world and it is just not exclusive to the upper portion of the Bay of Fundy. Yes, it has the highest tide range but I also suggest from Cape Sable Island to the upper bay is a very large area. To me, the emphasis seems to be that we're concentrating on just one particular location, where if that evaluation was spread out over the full range of the Bay of Fundy, there's something like a two to three hour tidal delay from the strength of the tide at Cape Sable Island with a 16-foot rise, to the head of the Bay of Fundy with a 28-foot rise.

To me, there is a potential for the whole bay - I'll cut to the chase here. I think we're losing sight of just focusing on one specific area and I visualize a grid pattern that can benefit the whole of Nova Scotia and you'll have a continuing range of tide just by 200 miles away, you have a turbine turning its full capacity, where now it appears you are concentrating in a very specific location, that the turbines are all going to be silenced for an hour or so, each tidal change. To me, I think this other opportunity is there and our grid system needs to be set up so that whole southwest Nova Scotia and Nova Scotia in general is going to benefit.

I guess my question is this: Is that in the planning process of using that full bay, or are you just going to concentrate on one particular area?

MR. JAMES TAYLOR: So the answer is that we are interested in developing or having the Bay of Fundy developed in an environmentally acceptable way to its maximum potential. The Electric Power Research Institute which carried out a feasibility study funded by the province - funded from New Brunswick, Nova Scotia Power and some other proponents - identified eight high potential areas in Nova Scotia. Most of them in the Bay of Fundy, most of them on the southern shore of the Bay of Fundy, including all the way up to Digby Gut and beyond, one in Big Bras d'Or under the Seal Island bridge.

[10:00 a.m.]

So the opportunity to eventually see in-stream tidal energy distributed across the length of Nova Scotia and realize the timing differential of the tides and get a more continuous source is clearly in our mind. What the province has said is that for demonstration of in-stream tidal, they believe it is most effective to have those demonstrations done in one location because you can do the environmental assessment for that one location, you can demonstrate various technologies against the same tidal resource and make appropriate judgments on one technology over the other.

Right now, the province is focusing on the Minas Passage. Minas Passage has some of the stronger tidal currents, along with the higher height of tides; also the stronger tidal currents, but not exclusively the only strong tidal currents. But that's what they decided for the demonstration phase. For commercial deployment it will be done on a competitive process much the same wind as a competitive process and we would think - we would hope that in-stream tidal will play its role across the whole length of Nova Scotia.

Does that answer your question? So it's just the demonstration phase that we're doing now and it's for effectiveness reasons that the province has chosen to do that in one location.

MR. BELLIVEAU: Just one large follow-up; I know the European communities - whether it is tidal energy or things like that, there always seems to be a royalty paid for the industry that's being displaced, for lack of words here. Is that part of this evaluation, that there's going to be a royalty that may go towards the fishing industry or tourism?

MR. BENNETT: We're not involved in any of those discussions at this point so we really can't comment on that. Ultimately, the development in the Bay of Fundy is going to depend a lot on the capabilities of the technology, the environmental impacts of that technology and the decisions made by the Department of Energy, the Department of Natural Resources - many other people who are involved as stakeholders in the Bay of Fundy as a resource.

There's quite a comprehensive strategic environmental analysis that's going on with the Department of the Environment that will ultimately make the determination of what's developable and how that will play out in terms of economic impact on the province.

MR. CHAIRMAN: Mr. Glavine.

MR. LEO GLAVINE: Mr. Chairman, I thank the witnesses for coming in this morning, it is certainly a very relevant topic here in Nova Scotia. I know even at the local constituency level - every now and then at a community meeting - our future pathway on energy is discussed. It is really somewhat disturbing and perplexing that we first talked about this in 1973, when we had the first energy crisis and were putting through boatloads of Bunker C across the harbour and, of course, using coal. Two people who popped in mind were George Baker of Kentville and his concept of tidal power and trying to tie up with Baron de Rothschild to put the money in place for it.

Here we are 35 years later and we're just starting now with an initial project in the Bay of Fundy which I, personally, think Nova Scotia has the opportunity to become a world leader, not just produce for our own Nova Scotia, but I think well beyond a Nova Scotia grid and also an opportunity to develop technology as well. I'm not sure if Mr. Zwicker would agree with me or not, but we've lost out on the opportunity with wind. Nova Scotia was identified early on as well when Europe was developing its wind energy generation. We sort of took a backseat and had a wait and see attitude. It may have been different if we had a publicly owned utility, but certainly Nova Scotia Power hasn't demonstrated much leadership on going down the road of non-renewables.

So now that we've lost out on the opportunity to be a leader in terms of an industry developing turbines and so forth right here in the province, how do you view the 2013 goal of 20 per cent from both perspectives, you into generation, your soon more wind fields and also Nova Scotia Power? It was an imposed, legislated stand that we took here in the province to at least reach 20 per cent renewables by 2013. So not ambitious, unrealistic - how do you view it?

MR. ZWICKER: I guess from my perspective you have to walk before you can run, and establishing targets and working toward those targets is always a positive thing, I don't have any qualms with that. I think it's one thing to say, here's the target; it's another thing to say, here's how we're going to work toward that target co-operatively and achieve it. That's the part, I think, that's missing right now.

I really don't believe that we've actually missed the boat on wind. I can tell you today that there's a world shortage of turbines and that world shortage is likely going to last for another 20 or 25 years. There are parts of this world that haven't started tapping in on the wind regime yet. There's a company starting up in Quebec that hasn't produced a turbine yet that just recently bought German technology and they're going into the manufacturing

business and their target is to service Canada. If we wanted to get into part of that business here, one of the huge expenses to getting these things over are the towers.

We have one of the perfect opportunities, and I'm going to throw this out even though I know there are some guys looking at this. Trenton Rail, the system up there for producing steel rails, I don't think it would be a huge transition to turn that plant, with the skilled labour that we have in that area, into a rolled steel plant so that we could at least construct the towers. The towers are huge, they take more room on the shipping containers to ship them across the Atlantic, it's a huge expense in terms of getting turbines landed on this ground here. So if we don't actually build the turbine and the blades, we could at least be building the bases for them and employing the skilled labourers that we have from that perspective. That's a huge opportunity, I think we can still do it.

In terms of the wind regime that we have, it's like I said, second only to P.E.I. and P.E.I. is a small, little province. We have a lot more area, a lot more undeveloped areas within Nova Scotia where we could be harnessing the wind. The limit is your imagination, when you get right down to it.

MR. GLAVINE: Thank you.

MR. BENNETT: Just to add to those comments. The wind industry in general was off to a bit of a slow start in the beginning as the technology developed, but as Barry points out, today the technology is definitely there, it's well developed, well understood and in high demand around the world. In spite of the slowness of technology development, Nova Scotia, I believe, has still demonstrated leadership in terms of wind deployment. We have more wind capacity in place in this province than in any other Atlantic Province, and I believe in many New England States as well.

I think we've done a good job of bringing it on line and integrating it into the system in a controlled way, and we'll need to consider that going forward. There are certain impacts to bringing an intermittent generation resource on to the power system. There are many ways they can be mitigated from the reinforcement of the transmission system through to pump storage systems or other energy storage systems that might be deployed. Good thinking and control is important as we move forward, but there's no doubt that there's a tremendous opportunity for us as a Nova Scotian company and as Nova Scotia Power to be an enabler of this wind development within the province, and we certainly intend to do that and we're doing that today.

MR. GLAVINE: Thank you, I appreciate those comments. In terms of the 130-megawatt proposal that's now in the developing stage - or is it still at the RFP stage, is it out as an RFP?

MR. BENNETT: No, in a short time we'll be issuing letters of intent and releasing the results of the RFP.

MR. GLAVINE: Will that just be meeting the increased demand in 2007-08 or will it put additional renewable toward the goal of 20 per cent, and what are some of the other target dates for RFPs on the renewable side?

MR. BENNETT: The nature of the RFP as it stands today is to exceed the percentage of renewable increased requirements that are in place for 2010, which I believe is 5 per cent above what exists today. As I mentioned earlier, we have about 11 per cent renewable on our system today, so it will be an additional 5 per cent on top of that to be in service by 2010.

MR. GLAVINE: When you say 11 per cent in the system, is that full capacity for renewables when you look at hydro and the stationary tidal project in Annapolis and so on?

MR. BENNETT: I believe the correct number for the installed capacity is about 17 per cent, and about 11 per cent of the generated energy on the system comes from renewable resources like hydro or biomass or wind.

MR. GLAVINE: Currently, the six communities in Nova Scotia, like Berwick and Canso, that have their own system, could, in fact, be developers of renewable energy. Does NSBI have to buy from those six towns if they were to start their own independent projects?

MR. BENNETT: I'm afraid, as I mentioned earlier, I'm still relatively new in the role and in understanding exactly where the market is in Nova Scotia in terms of its evolution, I'm not completely up to speed on that. I don't believe that any municipalities are intending to do that at this point. Maybe, James, do you have a better understanding?

MR. JAMES TAYLOR: Perhaps I can. Nova Scotia Power has filed an open access transmission tariff that allows for equal access to the transmission system by any developer for the purpose of delivering energy and electrical products to the municipal utility, so the wholesale market has been opened up, or to export electrical products out of the province. What is currently being worked on are some of the products that go along with that open access transmission tariff and very good progress has been made through this late summer, providing backup energy - what about spill energy when they overproduce, what about top-up when they slightly under produce?

The pricing of those products is coming to a conclusion and with that in place, municipal utilities could develop their own wind farm remote from their municipality and wheel across our system, using the open access transmission tariff, or they could develop a facility within their own system, they could always do that. Berwick, for example, had its own small hydro plant, so that's coming to total picture pretty soon.

MR. GLAVINE: Okay, thank you.

MR. CHAIRMAN: Mr. Dunn.

MR. PATRICK DUNN: Mr. Chairman, just a comment that was made earlier this morning about the educational aspect as far as the public is concerned, I think it's more than adequate. The education that's out there, I think we probably need more, because I think the fear of change is always a deterrent to advancement in anything and with regard to wind power it's the same thing. Some people, for whatever reason, don't get the opportunity to see or read about the positive impact that this will make on our province and they have uninformed opinions around coffee shops and on the streets as a result, and that sort of hurts in areas of the community and so on. Again, I think if we keep plugging away that eventually we should get to where we would like to be.

You mentioned there were 10 towers situated across the province trying to find out where to examine the best areas, I think you said . . .

MR. ZWICKER: There are more than 10. There are 10 that we have up and there are five more under construction as we speak.

MR. DUNN: Where are the best areas of the province? If you were to pick out maybe the top two areas as far as consistency . . .

MR. ZWICKER: The Cape Breton Highlands would be the absolute best probably. The Guysborough-Canso area is another great one. Digby Neck is another great one, there are lots of very good areas. The province just produced their wind map recently which corresponded with some studies that we had undertaken for the entire province in terms of what the wind regime looked like, and that's a help in terms of giving you a starting point to say we should be looking here. I'm not an advocate of putting turbines on the top of the Cape Breton Highlands, don't get me wrong, that just happens to be where we have very good winds.

[10:15 a.m.]

MR. DUNN: Right, okay, thank you. As far as renewable energy, we touched on this a few minutes ago, where do biofuels play in the next decade as far as biofuels being used as opposed to coal in the generating plants of Nova Scotia Power?

MR. BENNETT: I believe that some of our generating plants are capable of using a biofuel mix, so that is an alternative going forward, if it produces a more economic solution or an environmentally sustainable solution that's acceptable to our customers and is approved by our regulator. There are also lots of other opportunities that are likely to be exploited like landfill gas generation opportunities, or there will be, I'm sure, testing and development in wave technology, as well. So there are a multitude of areas where people can look for this renewable resource.

MR. DUNN: Thank you. I was very pleased to hear you mention the Trenton Works, because it's a facility that's right in my constituency and next door to my colleague across

the way. We're all aware that there is a small army out there searching the globe for someone to buy the plant and certainly, windmills are one particular thing that have been mentioned many times at various meetings, along with various other things. Hopefully that company will appear on the surface and it will be a diversified company and there will be something right in our back doorstep that will be able to do things like we were talking about, building parts of the bases and so on. Thank you.

MR. BENNETT: Just as a note, Mr. Chairman, we believe there's a potential for about $500 million of investment in the province related to the renewables RFP that we will be issuing soon, so it's a very significant economic development mechanism on top of the work that we're already doing within Nova Scotia Power to improve our environmental performance at our existing generating facilities and maintain our system, which amounts to an additional $500 million per year that's being spent in the province over the next number of years.

MR. ZWICKER: And if I may, Mr. Chairman, just to follow up on that, because there are two things. On the investment side it's huge, the opportunity is there. One of the things we - I'm going to use the word - "struggle" with - but struggle in a light word - is that the bulk of the work that we get done on behalf of our community at Scotian WindFields is that we utilize Nova Scotia based companies for that. Where the expertise is not here then we have to go outside for that. I think as the industry grows, the level of expertise in terms of our local farms will grow and we will be able to be truly self-sufficient not only in the provision of the energy, but in the provision of all the expertise that goes into providing the energy and the spinoffs from that. It's tremendous in terms of seeing the growth that is happening in that sector.

Your comment on the educational side and the fear of change - there is only one way that I know of in terms of dealing with the fear of change and that is through strong leadership. When there is strong leadership on any aspect of change, it minimizes that negative impact and the fear associated with it, I can't over-emphasize that. In anything that I have done in my career, it's the strong leadership side of it that will help deal with the impact related to the fear of change.

MR. CHAIRMAN: Mr. Gaudet.

MR. WAYNE GAUDET: Mr. Bennett, in your opening comments you indicated that Nova Scotia Power produces about 11 per cent of energy that comes from renewable energy. I'm just curious, is it more expensive to your company to produce renewable energy than using fossil fuels?

MR. BENNETT: There is an expense to the production of renewable energy. The infrastructure costs are quite high, as we mentioned earlier, but the fuel is free - the fuel being wind for example. On the other hand, using the existing generation facilities that we have that are operating at a relatively low cost - in effect, operating as some of the most

efficient plants in Canada - they do tend to produce lower-cost energy particularly when we're able to access fossil fuel sources that are competitive in the market, so it is a changing balance at all times at this point.

Certainly, our fossil-fired fuel plants are very competitive in providing real value for our customers in Nova Scotia. Not to say that there's not a competitive economic position for renewables going forward - I believe there certainly is and the results of our RFP process for renewables was a substantial expression of interest and some potentially economic solutions that we can put in place with independent developers going forward.

MR. GAUDET: I guess the million dollar question that consumers probably have is, is wind energy cheaper to produce? I understand you have to make a substantial investment, but long term I'm looking at different parts of the world that have been using wind energy. Can consumers expect to pay lower prices for wind energy down the road?

MR. ZWICKER: I think the answer is yes. There is a huge capital expenditure to get the systems in place, but your operating costs as you work through that and your amortization of basically paying off your equipment should allow - will allow, I believe - for levelling of your rates over time. A lot of it has to do if you decide you're going to pay these things off in 10 years versus 20 years; the first 10 years are going to be pretty wicked. The reality is the equipment is advanced to the point now that most of them come with a warranty for 10 years, so you know they're going to last 20 and probably more than that if you do some regular maintenance.

At the end of that life span of the particular turbine that you have, you still have all your other infrastructure, your towers, your wiring system, your substations all in place. If you had to totally replace the entire hub and blades of that system you're into much less of a capital cost than you were initially because your infrastructure is there. You have to look at it over time. If you just put it on the market today, there is no question that it is probably twice as expensive to generate wind today than it is to generate the same amount of electricity using one of the thermal plants, but you have to look at it over a longer period of time.

Hence, the RFPs and stuff that have come out are looking at rates that will be paid for the private power generators over a 15, 20 or 25 year time period, to provide not only for the operator a sense of what that income will be, but for the operator of the system to know what their costs will be over that period of time.

One of the things that can happen as we work down the timeline on this, what we should be encouraging everybody, in terms of businesses and in terms of homeowners, is to move to electric systems, move away from oil burners and furnaces that burn fuel, to electricity. It is all part of the reduction, if you like, of the CO₂ emissions and our reliance on fossil fuels and as more and more clients come on to use electricity and more electricity,

that again helps level out the provision of electricity from renewable sources, in terms of the expense.

So you can increase your market and all you have to do is think about, do you want to be burning oil when oil is $200 a barrel? The reality is no, you don't want to be. So some of the economics that we look at in terms of going forward, for building factories and building businesses and building homes, has to have a different scenario in terms of what it is going to cost to operate this facility, 15, 20, 25 years down the road, particularly with respect to electricity.

In my earlier life, dealing with some economic development stuff on behalf of the Town of Bedford when I was there, one of the big items that industries look at when they come here is the cost of energy and what will it be 20 years out? We can greatly help our economic environment in Nova Scotia by being able to show not only advancements into the renewable side but the impact that will have on levelling our rates and still keep ourselves in a very competitive position with the rest of the world.

MR. GAUDET: Mr. Bennett, you indicated that right now you have 40 wind turbines producing energy. Where are those wind farms located?

MR. BENNETT: The majority of them are independently owned machines. They are in Pubnico and near Lingan.

MR. GAUDET: Mr. Zwicker, in your opening comments, you made a comment that certainly struck a chord here - you said, we need to properly harness the wind without impacting on people. Now I'm sure all of us have heard the story about the d'Entremont family in Pubnico. I guess my question is, are there guidelines to follow in terms of where wind farms are allowed to be located? Have those guidelines been established, developed?

MR. ZWICKER: No, not from an entire province point of view. I think, as was pointed out earlier, some municipalities are establishing regulations, in terms of rules with respect to separation distances more than anything else, and separation distances from existing buildings, whether they are seasonal or year-round buildings, and natural features like brooks and lakes and those sorts of things, that will come under the environmental assessment side of things, but there are no general guidelines within the province that talk about that.

It is difficult to talk about it in the context of the one experience in Pubnico. The very first time that I went to Pubnico to see the facility, (a) I was impressed with the facility; (b) I understood some of the concerns that the resident was expressing. I was down about a year or so later, spent a little bit of time down there and was overly-impressed with the community's response - the general community, the majority community - in terms of the positive impact that that facility has made on their community.

I'm not associated with that wind farm at all in any way, but I can tell you that the general response from the people in that area was extremely positive. It is unfortunate that one or two families have had some negative impact as a result of the way that has been positioned. I think lessons have been learned in terms of the orientation of turbines with respect to where individual houses are - a little bit more separation would have been helpful. Not cutting all the vegetation close to the property line would have been extremely helpful. So there are best practices, I guess, that have been learned as we go through this that suggest that there are lots of ways to help mitigate some of the impact - in that case, the noise impact.

We don't ever want to try to mitigate the visual impact of something that is going to sit 125 metres in the air - you're not going to do it. You're going to see them and accept the fact that you're going to see them.

In terms of noise impact, and there is a little - as you add more turbines to it and as you put them in a line and if you establish your position right off the end of that line in the turbines, there's no question you're going to get some noise.

MR. GAUDET: I have one last question, Mr. Chairman. Mr. Zwicker, you indicated there's a waiting time for turbines of about two years.

MR. ZWICKER: Yes.

MR. GAUDET: I guess I'm curious, who produces them? I guess everybody is waiting in line to purchase them.

MR. ZWICKER: There are a number of manufacturers around the world. One of the models that has been a popular model around here is produced by GE out of the U.S. Siemans produce - well, I couldn't go through the list but most of them are produced outside of Canada. Most of them are in a world market and if you are not in a big farm development business, like wanting 200 or 300 of these turbines at any one time, you are put down on the priority list in terms of delivery.

MR. GAUDET: Just one quick question: What would be the average cost of one windmill?

MR. ZWICKER: If you think about it in terms of megawatts, one megawatt installed generally will cost you $2 million. That's a ballpark figure and it's totally dependent on a lot of other things but that's the big budget figure, I guess, that we would generally look at.

MR. GAUDET: Thank you, Mr. Chairman.

MR. CHAIRMAN: Mr. Theriault.

MR. HAROLD THERIAULT: Thank you, Mr. Chairman. Thank you for your presentation. After 30 years of trying to get hydro and wind going and we've got 30 windmills up, I can't see any industry in this province starting up because I don't know if we'll get another 30 up in the next 30 years. People think there are two because we have two down where I live - one on Digby Neck and one in Little Brook. Over half of the time - I would say maybe three-quarters of the time - those windmills have the brakes on them down there. No one knows why; I get a lot of questions as to why aren't those windmills producing? I don't know, that's one of my questions.

[10:30 a.m.]

I know we could build generators here, we could build towers, surely if we can go five miles in the ground and pump out crude oil we can put something in the air that will hold a windmill up 100 feet. I mean I don't think that's the problem, technology. The problem is the slowness of it and who would want to invest millions of dollars into Trenton to build a tower a year, for this country or this province.

What kind of pressure are oil companies and coal companies putting on Nova Scotia Power to keep Nova Scotia Power using oil and coal? Can you answer that question?

MR. BENNETT: There is absolutely no pressure put on us by fuel suppliers to continue the use of their product, other than the contractual obligations that we would have as part of a diversified fuel portfolio that the company manages in conjunction with the Utility and Review Board. All of those exercises are well vetted, and short and long-term contracts are entered into. Really, the only leverage that an external fuel provider would have would be our obligation to meet our fuel contract obligations that have been very prudently entered into. So there's really no pressure or leverage there at all.

MR. THERIAULT: So what is stopping Nova Scotia Power from moving more quickly on renewable energy? We talk 35 years here, this has been going on and talked about and here after 35 years we have 30 or 40 windmills up and I can't see a whole lot more going up in the next 30 years.

That's another question, why are those two down in western Nova Scotia not running?

MR. BENNETT: The units are operated by independent operators who resell the energy to Nova Scotia Power and maybe James, you can expand on that.

MR. JAMES TAYLOR: The one at Digby itself is an independent power producer - old units. The one at Little Brook is Nova Scotia Power-owned. Nova Scotia Power moved forward in 2001 to put two wind turbines up of the modern design. Back in the 1970s, we put up the first wind turbine down at Wreck Cove - that was used by utilities for a commercial purpose, so it goes back a long way that we've been at this. In 2001, we put one up in Little

Brook and one at Grand Etang. One was a Turbowinds design - one manufacturer - and one was Vestas. We wanted to try out two manufacturers to understand the technology.

The Turbowinds design at Little Brook has a particular type fault, it is a particular piece of equipment that is failing and it is the rotary valve on the hydraulic system. So we've been working with the manufacturer to understand the root cause of that, as they have these problems on many of their machines around the world. It has shown up because in 2001, it wasn't a brand new design but it was still in early days of deployment. We think we have a solution to the rotary valve and you should see the one at Little Brook run a lot more.

The RESL machine at Digby,it is of a design that should run just fine and our numbers would say that they have been producing at a reasonable rate.

MR. THERIAULT: There are two in Digby, excuse me. There is one in Digby and then there's one down on the peninsula at East Ferry.

MR. JAMES TAYLOR: Yes, both RESL machines.

MR. THERIAULT: The one in East Ferry 75 per cent of the time is shut down.

MR. JAMES TAYLOR: Our numbers would say differently, but I accept what you say.

MR. THERIAULT: You don't know why?

MR. JAMES TAYLOR: The energy that is produced from those RESL machines is within the range of energy that is produced from any of the machines around the province, so it wouldn't suggest that the machine is shut down a lot. It would be because of maintenance reasons if it is shut down - it's not for any other reason. If it is available to run, then run it.

MR. THERIAULT: Thank you.

MR. ZWICKER: Mr. Chairman, I think you're wrong in terms of not seeing a lot more turbines in Nova Scotia. I just know from the response and I don't know the details of the response that Nova Scotia Power got from that RFP, but I do know of the number of other companies that responded and the number of people who are gearing up. I know the commitments that we've had to make with respect to turbines so that we can have them here is going to say that if we're one of the ones selected, you are going to see a considerable number of more wind turbines in Nova Scotia, absolutely.

MR. BENNETT: We're certainly moving very quickly down that path toward a renewable portfolio standard and an RFP with renewable generators that will put those wind turbines and potentially other - although admittedly primarily as you pointed out, Barry,

primarily wind development - in place in a very short period of time between now and 2010 and then even more between 2010 and 2013. So our company is doing everything that we can do to enable that process to move along as quickly as possible.

MR. THERIAULT: Thank you and I believe where I come from, the people will be happy to see that.

MR. CHAIRMAN: Minister Barnet.

MR. BARNET: Just a couple of quick questions, but an observation. Maybe the member for Digby isn't huffing and puffing enough in Digby, he's doing too much of it here in Halifax. (Laughter) If you were to huff and puff a little more down there, that turbine would just spin and spin and everything would be great in this world.

MR. THERIAULT: Don't get me started. (Laughter)

MR. BARNET: A couple of quick questions. One is - and I apologize that I wasn't able to attend from the beginning and maybe you covered this. I recall - and my memory is a little vivid on this - there was and is a process and a way in which consumers can opt for green energy through NSPI. Could you give me some details with respect to that?

MR. JAMES TAYLOR: When Nova Scotia Power did build the two wind turbines in 2001 and began to supply new renewable energy in addition to kind of our legacy, hydro and tidal, we did offer, as is done in other jurisdictions, a green power rider. For $5 a month, residential customers could buy 125 kilowatt hours of new renewable energy. Residential customers did take advantage of that green power rider and we still offer it. We promoted it heavily in the earlier years and we don't promote it as much, but that offer is still there.

MR. BARNET: So can I ask how many residential customers have taken advantage of this particular option?

MR. JAMES TAYLOR: Mr. Minister, I don't have the current number but at one time, it was in the 300 to 400 range. It was that sort of number of subscriptions.

MR. BARNET: I guess specifically, what have you done recently to promote it? Obviously, the cost of developing green energy is expensive, at least as we've heard today the initial cost, so it seemed to me that it would be the kind of thing - a lot of people I talk to are concerned about the environment, concerned about having renewable green energy, so I would think that it would be a worthwhile exercise at least to allow Nova Scotians to put their money where their mouths are; an opportunity to invest if it is given to them. I guess I'd like to know what it is that NSPI is doing to promote that in the future, now that we're starting to see some real benefit of construction with wind towers.

MR. BENNETT: Probably the most important and significant thing that we can do to promote the development of this renewable resource is the activity of working through the commercial terms and agreements for longer term contracts that really enable developers like Mr. Zwicker to go and obtain financing and put together project proposals that can work over the longer term. Our company is doing that actively today. It is a very complicated process but it's something that we're working through and I think doing a very good job of moving that forward.

I would say that that's the single most important enabler that we can bring to the table - that business functionality of making these long-term contracts happen in a way that supports the development of the wind turbines.

MR. BARNET: My next question is to Barry. I know that you have a great deal of background in municipal planning - I've experienced it in the past with you. It would seem to me that this phenomenon of developing opposition to wind farms and/or even a single piece of apparatus is something that the industry must have been aware would happen. There must have been some experience in other jurisdictions that had been more advanced than us that there would be people who would be opposed to these things. The NIMBY mentality would be no different here in Nova Scotia than it would be in any other jurisdiction.

My question is, what has the industry done to engage Nova Scotians in advance of that? Frankly, I didn't see a lot of it and/or, more importantly, engage municipalities in advance of construction of these facilities? It seemed to me as I watched the first few developed and then they spread across the province, as somebody with some municipal experience, I could see opposition starting to grow and I said to somebody one time, they better build them all at once because if they don't, they will never happen.

I know in this province you can go through municipal planning strategy and site landfills and other things that sometimes are objectionable to residents - quarries, that kind of stuff. These things happen all the time. I guess what I'm asking is, what has the industry done to engage citizens, or what should they have done to engage citizens is probably a better question?

MR. ZWICKER: I can't tell you what the industry on a whole has done, Mr. Barnet, but I can tell you what we have done. What we have done in each of the areas where we have assembled land, we have - you missed the earlier part of our presentation in terms of who we are, in terms of being a community-based organization. In the areas where we have assembled land, we have members/shareholders who have bought into the dream, have invested in Nova Scotia's future in terms of renewable so they don't need to be convinced in terms of the viability and the acceptance of this.

The next thing that we did, we met directly with landowners who had an interest in this and we then talked to the neighbours and we've had one-on-one meetings, little community meetings.

The third thing that we did, and this goes back I guess to my experience and your experience in terms of municipal government, I personally met with each of the municipal councils on a confidential basis and said, here's what we're considering, I'd like to know what your concerns are, I'd like to know what your municipality has in the future that we can help you with, that we can deal with the concerns that you may be aware of from your neighbours. I wanted to make sure that from a municipal government point of view, they were the very first ones in the community who knew that we were considering anything in their neighbourhood.

As you can appreciate, the acceptance was just unbelievable - the first time anybody has done that in any kind of business venture in their area. So we were immediately received with open arms and we continue to be received with open arms in the municipalities that we're dealing with.

If everybody else was to take that step and then work towards some broader community-based meetings, I think the impacts and the results - or the kickback, I guess - that you're seeing from the people who are saying "not in my backyard" is because it is a surprise to them. As we all know, any kind of development - it doesn't matter whether it is energy related or somebody wants to build a new, single-family home in your backyard, you're going to get that reaction unless you go through a proper process of meeting with people and discussing alternatives and options and how they can be involved with it.

I think a big part for us is that they all have the opportunity to be involved. There is a much higher level of acceptance when you're involved. It is a reality and that's part of the reason why I moved from one of the other wind industry companies - although I am still a shareholder in it but not an active member of their management team - to Scotia WindFields because the model that we have, in terms of being community-based and working from that grassroots level up, is the right way for us to do it. It is as simple as that.

MR. BARNET: I appreciate hearing that. I guess I have a more optimistic view than the member for Digby, with respect to the industry, but I think that the optimism is based on the fact that there has to be citizen engagement, that Nova Scotians and municipalities have to be involved in the process.

My final question is to NSPI and it really isn't about renewable energy but you talked about it - that is the energy from waste, specifically from landfills. I recently attended Highland Energy's kickoff to their methane facility in Sackville - the former Sackville landfill - taking waste energy or a waste product that was virtually dissipating into the environment and turning it into enough energy to provide energy for 2,000 homes. It would seem to me that that's the right thing to do wherever you can find that kind of mass. I know that it is not in every landfill, you have to have a certain size and scope of a landfill to be able to accommodate a Highland Energy at a landfill.

[10:45 a.m.]

What has NSPI done to work with those people like Highland Energy and others who might be interested in locating in other parts of this province? And are there other opportunities that exist? I know that Sackville probably - well it is the largest landfill but there must be others that at least in some way, shape or form can provide if not 2,000 homes with energy then 500 or a couple of hundred. To me, it is going to get wasted if it is not tapped.

MR. BENNETT: Well I think James is in the best position to answer that question. But before we do, just to add a point to your last discussion, the RFP process for renewables that Nova Scotia Power has been managing included a criteria to ensure involvement by each of the participants in the communities where they planned to site the wind development. So I wanted to point out that the people that we're working with now in the RFP process have all demonstrated a capability and intention and work that they've done in the communities that they're going to be putting these wind farms in.

So with that, James, if you can answer the landfill question.

MR. JAMES TAYLOR: Dave McLennan and Highland Energy were one of the bidders in the last round of solicitation that saw us put the Lingan wind farm on and several small developments. When we go out to tender, we don't go out for wind energy, we go out for renewable energy, as defined by the provincial RPS. So landfill gas is a form of renewable energy and Mr. McLennan would have bid on that and was one of the successful proponents, and now his plant is up and running.

In discussions with Highland Energy, Mr. McLennan would observe that there are very few opportunities that would be commercial - that would produce energy at a competitive price to other forms of renewable energy from landfill gas around the province. He says it is not impossible in the landfill that is now established, for example, in the eastern part of the Antigonish area that takes Cape Breton waste as well as waste from the eastern part of the province. That may build up a mass that some day may provide landfill gas. Having organics separated out from the garbage and going to other purposes doesn't help in the production of landfill gas because it is the organics that you need in there, so other actions are actually working their way away from having landfills that can produce this energy.

In Upper Sackville there is a second deposit of waste that hasn't been tapped in yet and Highland Energy's goal is to increase the size of that facility in Upper Sackville. That is probably the best next opportunity for energy from gas, but we agree with you. If you can take a waste that is harmful to the environment - so the release of methane, being a much more potent greenhouse gas than carbon dioxide, and you can turn that into electricity for the use of people is just a great situation. We were happy that that got developed.

MR. BARNET: Just one more observation. It would seem to me that a lot of people would believe that having two windmills in their backyard is probably not a bad thing, it's like having a couple of little bunny rabbits running around, but after two turn into thousands and that's where you get into this problem with people objecting to these in their backyards. I can't overemphasize the importance, at least in my mind, to engaging citizens and municipalities because it will ultimately be them who will embrace or battle against this industry. I really believe that Nova Scotians will embrace it, but it has to be done in a way that is respectful and encourages the concerns of residents. I surely hope that this is part of the new Nova Scotia, where we have a tremendous opportunity here with this natural resource. In addition to that, the whole concept of moving offshore, I flew over California at one point in time and I'm not sure - I think it's off the coast of California, Catalina Island, where there's a huge wind farm in the ocean that I don't think anyone objects to and it produces a significant amount of energy for that part of this continent. To me, there's no reason why we couldn't have the same thing here in Nova Scotia.

MR. CHAIRMAN: Thank you. I know there are members who want to do a second round, but I may interfere with that. I want to say thanks very much, we really appreciate your presentation. I have to say if there is anything I have learned, it is how little I know about what your companies are doing so I really appreciate what you have told us. I'm just curious, Mr. Bennett, when you mentioned some things that Nova Scotia Power is doing and you mentioned storm hardening - I'm wondering is that to ward off salty fog or has anybody raised that? Have you been here long enough that that term has come to you?

MR. BENNETT: I'm familiar with the phenomenon, but I was not familiar with the term in the past. Typically, that phenomenon is referred to as salt contamination and it can happen on power systems that have a significant coastal exposure due to ocean winds - storms that pick up a lot of salt from the ocean into the air and deposit it on the insulators. That is typically not a problem in itself. Usually what happens after those storms is, there is a heavy rain which washes the insulator off and everything is fine. Sometimes conditions can occur where that deposited salt is then followed by light fog and that light fog mixes with the salt on the insulators and causes it to become a conductive liquid and the insulators flash over.

We have equipment installed around the province that is actually designed to mitigate those impacts of fog, but not the combination of salt deposition or salt contamination and fog at the same time. It can actually happen in major cities along the sides of highways where salt is used on the roadways for ice control - you can get the same type of misted salt deposition on insulators. But this is the first time I heard it called salt fog - I would refer to it as salt contamination.

MR. CHAIRMAN; Thank you. Nova Scotians were quite surprised after all the years that we had, all the infrastructure, that all of a sudden - for a province that's pretty near an island - we've finally heard of salty fog, but thanks for that explanation.

My constituency has the highest tides in the world in Hants East, measured at Burntcoat Head. The notion of what can happen in terms of tidal power, I would really be interested in and I know my constituents would be interested as well. Also, we produce 30 per cent of the milk in the province, so some of the farmers in my area are interested in producing enough energy to run their operations. Some are actually thinking that they'd like to put up a windmill for that, some are thinking about biogas - I don't think there is much on the biomass which I kind of relate more to the forestry products use. I just have a couple of questions. One is, if I wanted to put up a windmill to cut my energy costs, like the dream of being off the grid - I don't know if that is necessarily right up there with the American dream, but it's probably coming pretty close - if I put up a windmill, what happens? Am I able to sell you guys the power or what actually happens with the power I produce that I don't use?

MR. BENNETT: We do have net metering rates available today to a certain level of size of customer. Those rates are set in conjunction with work that we would do with our Utility and Review Board, but those rates are available today for small independent generators who would like to do local generation to supplement their own electricity needs. Obviously, we're also working toward a market structure of some sort in the establishment of the open access transmission tariff which allows, as James described earlier, people who might want to generate larger amounts of energy and move it around - it allows them to do that in a way that shares the cost of doing that equally among all the ratepayers who are responsible for the transmission infrastructure that enables it. So those mechanisms are developing now.

MR. CHAIRMAN: I don't think I understood your answer. Will you pay me if I produce energy on my farm from, say, one windmill that I'm hoping will cut my costs, but I'm producing more than I'm using, are you guys going to pay me for it? I guess that's what I'm wondering.

MR. BENNETT: Yes, up to a certain size the simple answer is, your meter will turn backwards, which means that you actually turn your electrical meter backward by your net generation supply.

MR. CHAIRMAN: Could you say that again, please?

MR. BENNETT: In the net metering concept for small generators, your meter essentially turns backward, so when you're using energy it turns forward and when you're producing energy it turns backward.

MR. CHAIRMAN: Okay. So you're not going to charge me for the energy I'm not using?

MR. BENNETT: That's correct, you are not charged for that and you're paid for the energy you produce in terms of savings on your electricity bill. You are paid in the form of savings on your bill. I know I'm not describing this very well, I apologize.

MR. ZWICKER: Can I follow up on that?

MR. CHAIRMAN: Sure.

MR. ZWICKER: I just wanted to bring you back to one of the points that I made. Net metering, I think, is a very positive thing. I think from our perspective, the net metering cap is what we are looking at that needs to be raised so that more businesses, your farming friend is probably producing and utilizing more power than what the net metering cap is today. Small businesses are going to be somewhere in the 100 to 200 kilowatts, versus the 100 kilowatt cap, so you cannot take advantage of the net metering system the way it is set up now. But it is a very positive thing if you are in that range and you put a system in - you are getting the best possible rates because you're getting retail rates; your meter is going backwards.

The other issue with net metering is that it's cut off on a 12-month period so that the meters get basically reset. If you happen to be at a point where you're generating a lot more power for a period of time than you are using, that doesn't carry over from one calendar year to the next. I think with those two modifications, increasing the cap and maybe taking away that 12-month calendar thing, we then have a device that a lot more businesses and individuals would take advantage of.

I think the other aspect that I heard Rob say was on the open access transmission tariff, which is another positive step quite honestly, but as I understand that today, that is really only available to the six municipal utilities to either ship power into their utility from an independent supplier or to sell power outside. It is not available to a company like ours to sell power to somebody else, and I think that would be another serious advancement.

MR. CHAIRMAN: The issue of methane that the minister spoke about and the notion that by removing the organics you're increasing the potential for methane gas - I'm curious, does anybody talk about specifically delivering those organics to a particular site for the production of methane gas or six sites and using them to produce gas for biogas? Of course, we all think about green bin organics, but I think about all the material that comes out of grocery stores and that must - well, I'm not sure where it winds up but I think the tonnage of material that would produce biogas would be significant. Is there anybody even talking about that, in terms of renewable energy?

MR. JAMES TAYLOR: The diversion of organics, the organics that is diverted, has a use right now. So it goes into a value chain, I'd like to believe anyway, that is used for - whether it is used for mulch or agricultural products, et cetera. So I believe in Nova Scotia that it is being used right now and the answer is no, we haven't heard people speaking of, developers speaking of consolidating that and doing what would be an anaerobic digestion to produce methane. We haven't heard of people speak of that in Nova Scotia.

MR. CHAIRMAN: In the present use, that methane is just escaping and the organic product is being used by whomever. I'm assuming that you would still have that organic product but could trap the methane?

MR. JAMES TAYLOR: Well, currently I don't believe that the organics are actually allowed to decompose in a way that would produce methane to the quantities happening in the Upper Sackville landfill site, which is really anaerobic, so there's not enough oxygen there to create a different product because actually the bacteria is working away and producing CH₄, which is the methane that you burn. So in open atmosphere, in decay, different products are being produced that wouldn't have the same effect on greenhouse gas conditions and that sort of thing.

[11:00 a.m.]

MR. CHAIRMAN: I just want to touch on something the minister said around the NIMBY view. I had a friend who at one point, he bought a property in Enfield many years ago but the railway line went across the back end of his property. Because he was new to the community and new to having a railroad in his backyard, he noticed it, but after he was there for 30 years he said if anybody asked me if the train went by, I couldn't tell them.

So I think it is one thing to build your house next to a windmill, but something else to have somebody else build a windmill next to you. If most of the people in the Pubnicos seem to be quite happy, but two people aren't and your house is all you got, I have a real problem with how well this is done in the future. Definitely when I think about the visual component of windmills, pretty novel right now but when you think that your kids might be healthier or your grandkids and generations of kids in the future because of having to look at them, that's a pretty good bang for the buck, I think.

I don't know a lot about windmills. I was to O'Leary two or three weeks ago and was surprised at the number of windmills that I saw there. I stopped my truck and got out and stood there, and I can't tell you how far away I was, I didn't think I was that far but there was a noise. I thought, if that was that close to my house, I wouldn't like it. So anyway, I don't know what distance and you probably know the size of those, but it certainly caused me a little bit of concern and I'm definitely pro-renewable energy.

I don't know if you gentlemen want to have some closing comments for the committee. We're basically out of time and we have two or three agenda items that we have to address, so I'll leave the floor open to you to make any closing comments that you may want.

MR. ZWICKER: I'm fine - just to thank you for the opportunity to meet with you and to meet with the friends of Nova Scotia Power at the same time. We had an open discussion and I think it's very healthy. I think that the points raised by all of you are obviously very good points and my only suggestion is, remember that it is the provincial government that

has to provide leadership here, it isn't one Party, it's the entire government. Leadership is so important in terms of helping to deal with the situations that you talked about, advising municipalities.

The Union of Nova Scotia Municipalities is currently looking for a company to undertake a best practices manual for the development of wind farms in municipal units, which will help. We all need to participate in that, but I think we all need to continue to talk very positively about the long-term benefits of Nova Scotia transitioning itself into more renewable energy. Thank you.

MR. CHAIRMAN: Mr. Bennett.

MR. BENNETT: I would just sum up by saying that our company understands the linkage between a healthy environment, a healthy economy and healthy Nova Scotians. That is all-important to us and certainly that highlights the importance of renewable energy production going forward. Our organization is committed to that path, we want to be an enabler, we want to participate where we can participate and be helpful and operate our business successfully.

I think the point that Barry made earlier is very important to reinforce and that is the need for collaborative work between our company, independent developers and the Government of Nova Scotia and our customers to collaborate on the development of these important resources going forward and then I think it is a very achievable goal for us.

Thank you very much for the opportunity to meet you today and speak, I appreciate it very much.

MR. CHAIRMAN: Thank you very much.

[The committee adjourned at 11:10 a.m.]