NS Power comments on UARB ruling, maintains that consultant’s allegations are false

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NS Power comments on UARB ruling, maintains that consultant’s allegations are false

September 12, 2012

HALIFAX – Nova Scotia Power accepts the decision of its regulator, the Utility and Review Board (UARB), to make public certain portions of a report authored by UARB’s consultant, Liberty Consulting.

Nova Scotia Power had requested that portions of the Liberty report, which examined NS Power’s Fuel Adjustment Mechanism (FAM), be redacted on the grounds that it was either commercially sensitive or defamatory. The UARB agreed to uphold the redaction of the commercially sensitive information, the publication of which could harm NS Power’s ability to negotiate the lowest fuel prices on behalf of customers.

“We absolutely agree that the public has a right to know the facts. Our concern has been that the Liberty report reaches false conclusions and recommendations,” said Rene Gallant, Vice President of Regulatory Affairs for Nova Scotia Power. “We work hard to keep fuel costs as low as possible for our customers, and we maintain that our fuel purchases and hedging programs have been prudent, and have saved money for our customers.”

The expert evidence of international consultants (filed with the UARB and summarized in a backgrounder) supports NS Power’s position. Commented Gallant: “The expert evidence we’ve filed amply demonstrates that Liberty’s criticisms are based on incorrect opinions and information. We welcome an audit that provides value to the UARB and our customers.”

NS Power remains confident that a full and fair hearing of the facts next month before the UARB will prove that Liberty’s assessments are wrong, and that NS Power has worked with good intent and outcome for customers. In the interests of greater transparency and effectiveness, NS Power has also asked the UARB to revise the FAM Plan of Administration to bring greater discipline and clarity to its audit provisions. The proposed changes would ensure customers, NS Power, and the UARB benefit from a constructive and efficient review of NS Power’s fuel procurement and FAM compliance.

The FAM – designed in collaboration with the UARB, Liberty and customer representatives – ensures that customers pay only the actual cost of the fuel used in making electricity. Nova Scotia Power does not profit from its fuel purchasing program. Every two years, a consultant to the UARB, performs an audit of the FAM and NS Power’s fuel purchases, looking for areas to improve.