Nova Scotia’s (NS) Utility and Review Board (URB), in addition to the newly elected Liberal Party, is changing the province’s energy future.
On 29 November 2013, for instance, the URB approved the Maritime Link Project and the Liberal government introduced the Electricity Reform Act. Although the two developments are separate, both intend on creating a more cost-efficient energy market for consumers.
At a projected cost of $1.5 billion, the Maritime Link will transport energy from Newfoundland and Labrador’s (NL) Muskrat Falls region via subsea cable to Cape Breton, NS. The URB is convinced, however, that the project’s long-term benefits outweigh its short-term costs. Although it will take years before electricity begins flowing into NS, the project’s long-term benefit to the province is unmistakable: the newly amended agreement, indeed, provides a secure, renewable, and cost-competitive source of energy to Nova Scotians.
In addition, NS’s Liberal government introduced the Electricity Reform Act, which aims to increase efficiency in the province’s energy sector and reduce prices in the consumer market.
The cost of electricity in NS, for instance, has increased over this past year and NS Power, the province’s utility, continues to rely on nonrenewable energy resources, such as coal, which is likely to further increase prices. This new legislation, however, will create an open market for renewable energy manufacturers to sell their electricity directly to consumers, not only encouraging efficiency, but also affording the public a choice to consume sustainable and environmentally friendly energy. If passed, the legislation dictates that the URB will control licensing and NS Power will continue to provide energy to the public without refusing services.
Similar to the Maritime Link Project, however, it will take a considerable amount of time to realize the benefits of creating an open market for renewable energy.
There are, of course, no guarantees regarding the financial benefits to consumers. The uncertainty is due largely to the unknown administration and operating costs of such a system. With the right measures in place, though, the government is confident that the change will prove harmless to everybody involved.
Together, the Maritime Link project and the Electricity Reform Act have the potential to transform the province’s energy market for the good of both consumers and the environment. Moving toward a more competitive electricity market, for instance, will benefit Nova Scotians by ensuring that they are not paying above fair market value for electricity. Furthermore, the Maritime Link and the Act reinforce one another by securing a long-term source of renewable energy for the province, while also creating equitable means of distributing it to the public.
Either way, these developments demonstrate a need for improving the province’s electricity market, which the government is taking seriously by embracing environmentally friendly competition.
Rachel Lowe is a 2013-2014 Atlantic Institute for Market Studies’ Student Fellow. The views expressed are the opinion of the author and not necessarily the Institute