VIA E-MAIL
March 18, 2015
Electricity System Review
Nova Scotia Department of Energy
Joseph Howe Building
1690 Hollis Street
PO Box 2664
Halifax, NS B3J 3J9
Re: Electricity Review Report: Draft – February 18, 2015 (the “Report”)
Port Hawkesbury Paper has reviewed the Report and in accordance with the schedule of public
comments provides the following comments for consideration by the Department of Energy:
1. The Report notes the potential value of electricity storage and in particular that storage
was generally viewed as a tool to allow Nova Scotia to maximize its existing resources
instead of having to focus on new generation opportunities. PHP supports continued focus
of the electricity review on support for electricity storage as it believes, consistent with the
Report, that it will be a valuable go-forward tool to utilize to help stabilize and/or reduce
electricity prices. In particular, PHP notes that industrial customers have the potential to
be part of the storage solution, through utilization of their industrial processes, such as in
the case of PHP pulp storage. PHP believes that the final report should have a strong
emphasis on support for and encouragement of various means, including industrial
process means, to provide for electricity storage.
2. PHP notes that pilot projects are favoured to test new technologies and that the Report
supports a focus on energy management systems as well as efficiency, including the
management of system peak demand. Again, PHP agrees that the final report should
provide strong focus on energy management systems, including efficiency and the
management of system peak demand, and PHP believes that industrial customers in Nova
120 Pulp Mill Road
PO Box 9500 Port Hawkesbury, Nova Scotia B9A 1A1
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Scotia, including itself, could be well situated to participate in the testing of new
technologies to assist in this regard.
3. PHP note that the Thinkwell Survey states that when it comes to rating Nova Scotia
Power’s performance, respondents want to see managing costs as a top factor. In fact,
managing costs was considered the most important factor when it comes to rating Nova
Scotia Power’s performance by a order of double the second most important factor of
minimizing power outages. Cost control was a regular theme throughout the results of the
Thinkwell Survey and these same attitudes were articulated by many individuals whom
participated in the two public sessions attend by PHP representatives. PHP notes that
both support for economic development and cost management for the electricity sector
have been noted as points for consideration by the draft Report. However, PHP believe
the final Report should further enhance these clearly important points.
4. PHP believes that in the consideration of a Performance Based Ratemaking (“PBR”)
system, it is important for the Department to be cognizant of point 3 above. PHP believes
that in order for any form of PBR to be of value it would be imperative that the key
performance indicator be management and control of costs and cost-effectiveness and
efficiency.
5. PHP notes the support for R&D for new technologies, especially those directly related to
the Nova Scotia situation. PHP supports this conclusion, and again notes that large
electricity customers could be involved in the development and/or testing or deployment
of such new technology.
6. The Report has a strong focus on deeper regional cooperation and, in particular, greater
interconnection with New Brunswick. Although PHP believes greater regional cooperation
can provide benefits, it is important that any initiatives in this regard be fully analysed to
ensure that they provide lower long-term pricing for all Nova Scotia situate customers.
Each potential initiative in this regard needs to be fully analysed and reviewed before being
implemented, due to the significant potential consequences for customers in differing rate
classes in the Province. PHP would encourage significant consultation with ratepayer
representatives on all matters dealing with further regional cooperation or interconnection.
7. PHP notes the reference to the Energy Management Working Group Report in footnote 6
of the Report. As the largest user of electricity in the Province, PHP would be pleased to
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participate in any future working group initiatives dealing with electricity matters in the
Province, and believes it has considerable expertise that could be of benefit to the
Province as a whole in providing input into ongoing electricity policy development.
8. PHP notes the references to the importance of energy efficiency and strongly supports a
continued focus on energy efficiency within the Province. PHP is itself a leader in this
regard and believes, consistent with the results of the recent Integrated Resource Plan,
that Demand Side Management initiatives are currently the least cost long-term approach
to electricity cost control. In this regard, it is notable that 82% of respondents to the
Thinkwell Survey supported electricity rates that are stable over the long-term and that
only increase at or less than cost of living.
9. With respect to the issue of economic development, PHP specifically believes that the
Department should consider developing regulatory language to provide the Utility and
Review Board (the “UARB”) the flexibility to consider economic considerations in the
development of electricity rates to ensure that the UARB has the regulatory certainty that
it can consider impacts on industry and the overall economic landscape in the setting of
rates. As the UARB is a creature of statute, PHP believes that it should be given greater
flexibility to take into account all relevant issues in rate design and the setting of rates.
This would leave the ultimate setting of rates under the oversight of the UARB but ensure
that it has flexibility to consider economic development considerations in the overall mix.
10. PHP believes that the Department, working with other departments of government, should
develop a program that would provide for energy cost rebates to manufacturing industries
that use a relatively large quantity of electricity in their processes. Such a program could
be structured so that the rebate would be provided only upon the continued achievement
of certain defined thresholds, e.g. manufacturing production, employment, payroll, rural
geographic location, etc. Such a program would encourage local existing manufacturers
to maintain or potentially grow production while ensuring that the government only
provided assistance after the fact by way of an energy rebate. Energy efficiency, demand
response and storage considerations as noted above could also be considered as part of
such a program.
PHP is appreciative of the opportunity to provide these comments and looks forward to continuing
to provide comments to the Department as it develops a forward-looking electricity policy for the
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Province of Nova Scotia. As noted above, PHP is more than willing to participate in any working
groups or other sessions that the Department plans to conduct with respect to both the
development of electricity policy, and its future implementation.
Yours truly,
Bevan Lock
Energy Manager
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