Although the cost of electricity in Canso may soon be climbing – it could be just a small increase, and the lesser of two evils. Soon, the electrical bills addressed to Canso ratepayers could be coming from somewhere other than Canso Electric.
The Municipality of the District of Guysborough (MODG) has plans to transfer Canso Electric to Nova Scotia Power, pending approval from the Nova Scotia Utility and Review Board.
The potential changing of hands from the MODG to Nova Scotia Power will affect about 400 customers in Canso. According to MODG CAO Barry Carroll, commercial customers in Canso will, generally, see a small increase, if the transfer to Nova Scotia Power takes place.
This announcement was followed by an information session Dec. 11 – one that about 10 customers of the electrical utility attended.
Carroll said his impression was that the response from the community in Canso has been positive, and that there were no issues with the plan.
“I think most people see it as a good decision,” Carroll said. “If residents of Canso didn’t think it was a good decision, we’d have seen a higher attendance rate there.”
The purpose of the transfer, Carroll noted, is to make sure the electrical service ratepayers in Canso receive is equal to that which is offered elsewhere in the province by Nova Scotia Power. As it is, the MODG cannot afford to maintain, and continue to provide, power through Canso Electric’s infrastructure, on its own.
“Now, everyone will be paying the same rates. Canso residents will be paying the same amount as the rest of Nova Scotia Power’s customers,” Carroll said.
In order to make sure that local electrical service to Canso is on par with the rest of the province, someone is going to need to open their wallet. According to the MODG, the power infrastructure belonging to Canso Electric is in poor condition, and will require a significant injection of capital to get it into proper working order and keep it that way.
A study of the utility recommended $166,000 of immediate capital investment, to replace outdated parts – and $100,000 per year for maintenance from that point onward.
Significant investments are required in personnel, infrastructure and equipment to maintain the power infrastructure belonging to Canso Electric.
“The sale of assets to Nova Scotia Power will ensure the infrastructure will be brought up to standard, and it will ensure good quality dependable service for Canso residents,” Carroll said.
Information from the MODG states that Canso Electric doesn’t have the required linemen or equipment. The only option at the moment is for the municipality to hire third parties for those services. Revenues do not cover operating funds, maintenance costs or the necessary level of service.
If the MODG were to continue running Canso Electric, requirements to keep the utility running, it would need to hire more power line technicians, purchase a certified line truck and equipment, spend more on annual operating costs (including fuel, maintenance and repairs) and initiate upgrades to infrastructure.
These costs associated with the spending required to repair and maintain the utility would have a staggering effect on electricity costs for rate payers, entailing a jump of 40 per cent in customers’ bills, if the utility is not transferred to Nova Scotia Power and stays in the hands of the MODG.
When the Town of Canso dissolved in 2012, Canso Electrical rates for residential customers were about 17 per cent lower than the residential rate for Nova Scotia Power.
“These rates reflected a chronic failure to invest in renewal of necessary infrastructure of the utility resulting in its current condition,” states information from the MODG.
In 2015, a rate review requested by the MODG found that residential and industrial rates in Canso were below cost. The consultant conducting the review recommended increasing residential rates by 10 per cent and small industrial rates by 7.5 per cent.
The MODG didn’t raise rates, and instead planned an intermediate increase in rates, before an anticipated transfer to Nova Scotia Power. These intermediate increases were applied in 2016. These increases did not generate enough revenue for all the operating costs – and they don’t allow for funding of any repairs.
“It’s fully depreciated assets, for the most part. There have been emergency-type repairs in Canso for the last number of years,” Carroll said. “Transformers need to be changed, the poles need to be changed. They need new wires, and the substation needs to be given an overall uplift.”
It’s their business
“One thing about Nova Scotia Power is that this is their business,” Carroll said. “They’re going to provide good, quality electrical service.”
This is not the first step the MODG took to try and put the utility into other hands, either. According to information released from the MODG, it attempted to sell Canso Electric but received no offers.
“The former Town (of Canso) passed a motion prior to Guysborough taking over the town’s governance, to sell the utility,” Carroll said. “We’ve been working since that time to make it happen.”
That effort has been going on since the former Town of Canso dissolved into the MODG in 2012.
Canso Electric provides customers under residential, small general, general and small industrial class electrical service. Assets belonging to the utility include distribution equipment, poles, lines, transformers and street lights.
The next step in the agreement to transfer the assets to Nova Scotia Power is the application process, where the transfer is submitted to the Nova Scotia Utility and Review Board. The board governs and regulates Nova Scotia Power, a company that is privately owned by Halifax-based Emera. Once the Utility and Review Board approves, the MODG can proceed to transfer Canso Electric to Nova Scotia Power.
To put it succinctly, transferring the assets of Canso Electric to Nova Scotia Power will be removing the middle man. Currently, Canso Electric buys its power from Nova Scotia Power, and supplies it locally. Carroll noted the MODG collects bills and payments.
When the transfer is done, “it will fully, from top-to-bottom, be operated by Nova Scotia Power,” he added.
“This is about quality of service,” Carroll said. “We want to ensure the residents of Canso get equal service to everyone else in Nova Scotia.”