Electric happenings: firsts, rates and renewable options for Berwick

BY SARA KEDDY

Kings County Register

It’s a powerful first, and likely to get bigger over time.

An independent power purchase – and then sale – by Minas Basin to Berwick Electric will make the pulp and power company money, and save the small municipal utility’s customers money.

In November, Minas Basin bought bulk power outside the Nova Scotia Power monopoly and then sold it to Berwick Electric. The details of the transaction weren’t disclosed, but they do indicate the start of a competitive power market in the province.

Changes in 2005 allowed imported electricity from neighbouring jurisdictions under “open and limited access,” Berwick Electric superintendent Don Regan says. “That has now happened – cautiously and limited.”

Regan says Berwick and Minas Basin have “often ended up on the same side of issues in the past few years” relating to the province’s power industry. Earlier in 2009, Minas Basin bout greenhouse gas credits from Berwick. Berwick and Minas Basin both operate their own hydroelectric generating systems but buy the bulk of their power from NSPI. “Minas Basin and other industrial companies would like to be able to buy their power from other sources than NSPI, and they’ve now started this,” Regan says.

Minas Basin president and chief operating officer Scott Travers says Minas is “thrilled... to bring historic change to the marketplace.”

Last summer, Minas Basin asked Berwick if it would be interested in cheaper power purchases if the company could import it at the right times. “We can save and they do the work – it’s a small business for them, and helps us,” Regan says. “I don’t know where they buy the power from, but we’ll split the savings at the end of the month. The savings vary week by week. “This is going to be bigger – much bigger – over time. For this year, it will be miniscule but, in years to come, it will grow.”

Regan says there won’t be an obvious benefit – or rebate – for Berwick Electric customers in the near future with any power purchase savings through Minas Basin, as surpluses will go into operations or surpluses.

The new partnership also gives Minas Basin further exposure to the market as it gets involved in tidal power testing in the Bay of Fundy.

More power for the people

Berwick Electric, in partnership with the co-op for Nova Scotia’s half-dozen municipal utilities, has also just reviewed responses to a fall request for proposals for a supply of renewable energy – wind, district heating plants, solar or a mixture.

The co-op had a handful of proposals and will now spend the next couple of months negotiating with bidders. The result could be one deal for all utilities, or partnerships between individual utilities and whichever proposal may work best for them.

In Berwick’s case, “if the deal is right, we’ll take all pour power from renewable sources,” Regan says. Berwick buys 32 million kilowatt hours a year from NSPI, plus what it generates at its own Factorydale dam. The NSPI purchase costs about $2.7 million.

Rate ups and downs

On Berwick electric bills this month, customers will notice a wash between a provincial power rate hike and savings program – but “in future years, the effect will likely be quite different,” says Regan.

As of January 1, Nova Scotia Power is reducing its power rates by .2 cents per kilowatt hour through 2010, through a Fuel Adjustment Mechanism which allows for changing costs in electrical production. Berwick Electric gets the same discount on bulk power it buys from NSPI for its customers.

On the other hand, NSPI bills will increase for customers this year is it puts in place a Demand Side Management rider. The DSM program encourages customers to reduce energy use – meaning NSPI is less likely to need a new coal-fired generating plant and more likely to meet greenhouse gas emission standards. The DSM programs and incentives cost money – in 2010, $22 million, about a .2 cent-per-kilowatt-hour rate. Berwick Electric will also pass along this charge to customers.

Regan says the FAM is “unlikely” to be a credit to ratepayers in all years, and the DSM program is projected to increase to $55 million by 2013. “Customers of municipal electric utilities – such as Berwick’s – should be aware you are paying your full share of DSM costs – it is a provincial program, and we encourage you to participate and share in the benefits,” Regan says.