Nova Scotia Power’s effort to thwart future small-scale solar installations has sparked swift counteraction from the provincial government. Premier Tim Houston is promising new regulations to block a proposed system access charge that would add about 8.7 cents per kilowatt-hour (kWh) to the cost of electricity that net-metered residential and small business customers generate.
The proposal is part of NS Power’s recent general rate application to the provincial Utility and Review Board, which projects costs for curbing reliance on coal-fired generation as the utility pushes up the renewable quotient of its supply from 60 per cent to the targeted 80 per cent by 2030. In response, NS Power proposes a 3.7 per cent rate increase for 2022, followed by increases of approximately 3.8 per cent in each of 2023 and 2024.
Additionally, it proposes the new system access charge for residential and small business customers that interconnect self-generation to the electricity grid (distributed generation administered through the net metering program) as of Feb. 1, 2022. Existing net-meter customers would be subject to the charge once they pass the 25-year mark of grid interconnection. As well, commercial and small industrial net-meter customers would be excluded from that sector’s entitlement to a maximum cap on per kWh demand charges at a billing load factor of 10 per cent.
In justification, NS Power maintains other electricity customers are subsidizing the electricity that net-meter customers pull from the grid when self-generation does not meet their real-time demand, and that the value of surplus electricity they send to the grid is not comparable. Because winter is characteristically the peak season for energy demand in Nova Scotia, the utility also argues the overwhelmingly solar component of the net meter program is misaligned with overall system needs.
As proposed, a new monthly charge of $8 per kilowatt of installed capacity at an assumed capacity factor of 12.5 per cent works out to $8 per every 91.25 kWh of generation or approximately 8.77 cents/kWh. That would presumably discourage many of the nearly 16,000 new net-meter customers, bringing 136 megawatts of installed capacity, that NS Power forecasts could be added to the system by 2030 and redirect them to what the utility suggests are preferred renewable sources.
“Increasingly there are cost-effective alternatives to small-scale self-generation emerging, including community solar gardens and other grid-scale renewables sold into the retail market. To the extent these markets are competing with rate subsidized self-generation under the net meter program, the less likely it is that economic renewable options will be chosen,” the rate application states.
However, Houston is rejecting all such arguments. In a Feb. 2 letter to the chair of the Nova Scotia Utility and Review Board, the Premier instructs that time and resources should not be expended to address this element of NS Power’s rate application. In contrast, he hints his government will introduce new programs to further incentivize solar installations.
“The Province plans to quickly bring into effect the necessary legislative and regulatory framework to deny the net metering system access charge (SAC) requested by Nova Scotia Power in its January 2022 general rate application,” Houston affirms. “In communicating our plans rapidly, we also want to ensure a return to certainty for Nova Scotia’s solar industry, and to the rate-paying families investing in solar who have made, or are in the process of making, substantial investments in the name of growing Nova Scotia’s renewable energy system.”
