The future of Nova Scotia's quest for energy efficiency, its status as Canada's leading jurisdiction in that regard, and the wisdom of the Liberal government on energy matters will be on trial before the Utilities and Review Board this coming week, as the board deals with a demand by Nova Scotia Power Inc. to slash efficiency programs by nearly half.
You'll remember that Efficiency Nova Scotia, an independent, non-profit energy conservation utility, was funded by a charge on your power bill, which aggravated many.
The Liberals changed that -- making the power utility pay the bill and hiding the charge in long-term power rates. At the same time, it changed the game: ENS (or its franchise holder, EfficiencyOne) would bid for NSPI's business in competition with the utility's long-term spending programs.
If saving energy were deemed cheaper in the long run than building new power plants and transmission lines, then NSPI would pay ENS for that service. That's how ENS would be mostly funded. The URB would decide among the options.
This arrangement -- having efficiency programs compete for business against expansion plans -- could work, despite the adversarial system it creates "if all the parties were of good faith," says Catherine Abreu, the Ecology Action Centre's expert on the matter. However, not all parties are playing straight.
NSPI unilaterally decided to not co-operate with a 25-year planning process, refusing to produce a plan that would be the basis for choosing between energy conservation and system expansion over the long term. That drew a rebuke last fall from the URB, which declared itself "very disappointed with NSPI's action."
NSPI decided to focus on the shorter term, with less spending on efficiency, arguing that this would lower power rates. The Integrated Resources Plan, which NSPI had originally endorsed until it changed its mind, called for $66 million a year to be spent over the next few years as the most effective amount.
ENS, possibly feeling some political pressure, has shaved that back to $40 million. NSPI wants $22 million, gutting ENS's domestic programs -- and killing most of the 1,000-plus jobs mostly held by eager young people of the type we want to stick around.
NSPI presenting itself as a champion of lower power rates is peculiar.
First of all, rates are set by the URB.
Second, that's the favourite political argument of the government, which came to power riding that lame old Nova Scotia horse. (Is there some kind of political fix going on here to cut ENS down?)
And third, the critics say the lower power rates are mostly hooey. The way Consumer Advocate John Merrick puts it, there would be some short-term savings on rates if efficiency programs are chopped, "but less savings than if they're maintained." That is, short-term savings will lead to higher long-term costs because efficiency -- "demand-side management," as it's called -- is clearly the cheaper long-term option.
NSPI's unstated calculation, of course, is that there's more profit in this short-term reckoning than in the long-term one — although huge expenses for power plants and transmission in future are put off by conservation, utility profits come mostly from people using more power, not less.
NSPI points out that Nova Scotians pay more for these efficiency services than other Canadians. Of course, we're conserving more, too. But that's the wrong comparison anyway, says Abreu. The real comparison should be with the northeastern U.S. states that are the leaders in this.
When it created ENS, the former NDP government modelled it on Vermont's efficiency utility, which spends twice as much per capita as we do. So does Massachusetts, which spends $500 million a year, plus $70 million to track its effects and to keep improving the system.
True, measuring the effects of something not used is an imprecise science. There are arguments and studies in the U.S. over this. This imprecision leaves efficiency programs open to the cutting temptation, especially by politicians who who don't believe in it to begin with.
In Maine, a new Republican governor has been bad-mouthing efficiency and has been accommodated by the state's public service commission, which ignored a recent law on the matter and ordered cuts roughly like those proposed by NSPI. A huge controversy is now raging.
Britain is also contemplating cuts to its program as part of its fiscal austerity. Yet the logic of conservation is becoming more and more binding. Efficiency spending last year was $310 billion worldwide, according to the International Energy Agency, outpacing spending on renewable energy.
As for the upcoming hearings, they were intended to last a day, but have been extended to five due to intense interest. One expects the URB to do its due diligence. However, if the power company is trying to sabotage the process and the government's support for the idea is suspect, do we have a problem?
Ralph Surette is a freelance journalist in Yarmouth County. This article was first published in the Chronicle Herald.
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