NSP says it will meet Sept. 1 deadline for proposed rules on new energy marketplace
March 20, 2015
By Joann Alberstat from www.chronicleherald.ca
Electricity users in Nova Scotia should know by Sept. 1 how the province’s renewable electricity market might operate, although a wind energy developer says it’s not yet clear who should pay the cost of creating the new system.
A Nova Scotia Power spokesman said Friday the timeline is tight but the utility company is committed to meeting the Sept. 1 government-imposed deadline for having proposed rules ready for the province’s new retail electricity market.
“We’re getting it done. Good progress is being made,” David Rodenhiser said in an interview.
The Liberal government passed its renewable to retail legislation in December 2013. The plan will allow independent power producers to sell green energy directly to customers.
Rodenhiser said Nova Scotia Power officials have been meeting with the Energy Department, customer representatives and potential suppliers since June to draft a proposed framework for the market. That includes drafting tariffs, procedures and an administrative process, he said.
The province’s Utility and Review Board will have the final say on how renewable to retail will work.
The regulator would also develop licensing requirements for renewable power producers.
Rodenhiser said the draft framework will include the proposed tariffs that producers would pay to use Nova Scotia Power’s grid or to purchase additional power, since renewables need a backup. Metering and billing arrangements are also discussed, he said.
He said the process of creating draft rules is complex, in part because no other jurisdiction has created a market for renewable generation only. Most electricity markets are open to various types of generation, including non-renewables, he said.
“This is going to be very much a made-in-Nova Scotia market design and solution for the task that government legislation has set out,” Rodenhiser said.
In addition, the legislation says renewable to retail must be done without creating costs for Nova Scotia Power’s remaining customers.
A Dartmouth independent power producer involved in the consultation said progress is being made on many technical and practical issues. But Dan Roscoe, chief operating officer of Scotian WindFields, said there is disagreement in some areas, including who should cover any costs stemming from the new market.
Roscoe said he thinks it makes more sense for the utility, not renewable retailers’ customers, to pay.
“The whole purpose of this is to open up a market for competition,” he said.
“If all of the costs that Nova Scotia Power may incur are borne by those new customers that are leaving them, then it’s not really competition.”
Added costs could include the utility having to shut down a power plant early due to lower demand, Roscoe said. Lost Nova Scotia Power profit is also an issue on the table, he added.
Roscoe said the board will have to rule on unresolved issues, and there may also be a need for government to clarify the legislation.
While he expects the market to be open by mid-2016, the power producer said it’s still too soon to say how attractive it will be to would-be suppliers and customers.
“We’re working on trying to make it work,” Roscoe said. “But there are still a lot of unknowns to be able to predict how successful it will be.”
An Energy Department spokeswoman said it’s not a surprise the process is complicated. Kyla Friel also said the development of the new system is on track.
“We expect that project developers, or renewable suppliers, will be able to apply for licences in 2016, with potential construction on renewable to retail projects taking place afterward,” she said in an email.