Bill No. 147 - Public Utilities Act (amended) - 2nd Reading

CLAUDIA CHENDER « » : Mr. Speaker, as I read this bill, I mostly have questions, and hopefully they'll be answered either in the course of debate or at Law Amendments Committee.

I guess the first thing I would point out is that this government frequently took the former Liberal government to task for introducing bills that would later be filled in with regulations, and I think these amendments are somewhat of this nature. We welcome the bill, if it does in fact move us toward performance-based regulation. I have been advocating for and tabling legislation around performance-based regulatory systems frequently over the last few months, following the lead of the Premier when he was in Opposition.

I think one thing that has become clear with this rate application and the reacting legislation is that we can't continue with the same regulatory system we have. The regulatory system that we have was designed to incentivize building large fossil-fuel and, in our case, coal infrastructure. I know that for the Cape Bretoners in the Chamber, coal is king. Unfortunately, the king's time is slowly coming to an end and needs to be replaced with other industries that provide good jobs. That transition needs to be incentivized.

The way that we incentivize that as a place with a public regulator is to change our regulatory system. Einstein said something like, we can't solve problems with the same thinking that led to them. I'm paraphrasing.

I think by fiddling at the edges of the way in which the NSUARB functions, we're trying to use the same thinking that we used to get us into the environmental crisis and, frankly, affordability crisis that we're in right now, to get out of it. I don't think it will work.

We know that we must decarbonize as quickly as possible. We must reduce our energy consumption. We must encourage more distributed and community-owned reliable energy and reduce the high cost that people now pay for their power.

We also need to ensure - and I think the member for Annapolis quite clearly spoke about it - that people's power supply is reliable. We don't have a reliable power supply in huge swaths of this province. We need to ensure that people aren't losing their livelihoods in the transition to clean, affordable energy.

When I think about all those things and I look at these bills, I am concerned around the proposed structure because, for one thing, when the Liberals introduced the performance standards that exist for the NSUARB, the PCs in Opposition predicted that the penalties, which have not changed in this Act, would not produce any changes in reliability. Bravo to the government. You were right. It didn't.

We're changing this bill but we're not changing the penalties. If the penalties already aren't working, adding to the list of things that the regulator can be penalized for will logically also probably not work because the penalties haven't changed. Even if that full penalty was given, which I don't think it has been, it's a rounding error in the profit of this company. They could easily pay it as the cost of doing business.

To be more specific, in debates on the Electricity Plan Implementation Act - that was in 2015 - then-leader Jamie Baillie called the penalty "measly and laughable." Our current Premier, and I quote, said, "There will be many cases - I can see many scenarios where it is cheaper to pay the $1 million - per year, mind you - fine. That could come and go in an instant, and when you're talking about a company of this magnitude, I don't believe that will be a big factor in the decisions they make. The $1 million fine that the minister is hanging his hat on is not going to be a big factor at that boardroom table." I'll table that.

  Many will be looking to see if that cap of $1 million in penalties per year is removed or made bigger. The government could have done that with this bill, but they have not. They have chosen not to.

That said, I don't actually believe that penalties by themselves, without controlling profit through a system of incentives - incentivizing decarbonization, incentivizing clean energy, incentivizing a just transition, incentivizing actually addressing the issues of people living in energy poverty - I think without that, we're not going to see much change.

We also haven't addressed in this Chamber the rate of return for Nova Scotia Power. We could do that by tying additional profit to meeting targets that we set. Targets that in many cases we have set through EGCCRA, but that we could legislate as targets in a performance-based system.

This would drive, I believe, the changes that Nova Scotians want to see in their power utility. Penalties for not meeting basic standards should be part of the structure, but there's nothing here that would incentivize Nova Scotia Power to pull out all the stops. Performance incentive mechanisms can be designed to reward the utility for meeting targets and exceeding them. There are lots of examples: Hawaii is one.

Ultimately, Nova Scotians know that shareholders should not rake in profits unless our needs and goals are met. I think Nova Scotians have been crystal clear on this issue. Right now there is a profound disconnect between what is good for shareholders of Nova Scotia Power and Emera and what is good for Nova Scotians. Those things are not the same. The things that are good for Nova Scotia Power shareholders with a guaranteed rate of return are not the things that are good for Nova Scotians.

Guess who Nova Scotia Power is responsible to - not us - their shareholders. That's the way it works. That's the way a corporation works. We have to question whether that's the way we want our power utility, that has a monopoly over power in this province, to work. It's not the way I want it to work. We'll see if it's the way that the government thinks it should work.

For the CEO of Emera to be awarded millions in compensation for serving shareholders while over one-third of Nova Scotian households meet the threshold for energy poverty - and I'll table that - is wrong.

This bill, although it has been presented as the solution for protecting ratepayers as Nova Scotia Power proposes to raise their rates by 10 per cent, in fact doesn't address ratepayers particularly at all. Nothing in the energy legislation presented so far by government, as I mentioned in the last bill, makes a dent in that guaranteed rate of return or, indeed, potentially in the rates that Nova Scotians will pay.

We know the government has said they will intervene at the NSUARB. I think all parties intend to do that, so we'll see what that intervention looks like. But by virtue of being a majority government, the government actually has the opportunity to intervene prior to that by changing the regulatory structure. That does not seem to be happening.

The last point I want to make, and this has been canvassed, is that the minister has been saying that these amendments will give Nova Scotians a real voice, and I'll table that. The minister also mentioned that in his opening comments. I would submit that an advisory board is a limited tool to accomplish that goal.

The stakeholder groups mentioned by the minister so far all regularly intervene in NSUARB hearings concerning Nova Scotia Power. We hear from these experts already; we know their opinions. It's not clear that those opinions are going to be given more weight in the form of an advisory panel, although perhaps they will. These groups are critical to creating the foundation of a performance-based system. But will this process genuinely engage and be informed by the public, by communities that have so much to gain by helping to set and weigh the standards for our power utility?

Everyone needs to be at the table to transform our power system. I was encouraged by the minister's words around how he envisioned that panel. I hope that's true, but I would like to see more, and I would like to see those voices being given more strength.

Finally, I will end on a positive note by saying we welcome the amendment recognizing farmers' markets among the category of community grassroots organizations that pay no more than domestic power rates. My colleague, the member for Halifax Citadel-Sable Island, asked about this in the House, and received a thoughtful response and we're very pleased to see it in legislation.

With those comments I will certainly look forward to Law Amendments Committee. Hopefully people will have a few hours' notice when that committee is called, and I will look forward to hearing what they have to say.