AMHERST – An executive from Nova Scotia Power addressed the Amherst Chamber of Commerce at a breakfast meeting held at the Wandlyn Inn Aug. 30.
“We know it’s the right thing to do,” said Robin McAdam, an executive VP for the Emera-owned utility.
McAdam was referring to the shift underway in the company’s power portfolio, from coal-dominated to a broader range of sources, with a push on renewable energy.
Rate increases came up, of course. The company has received steady criticism for its frequent increases, not to mention executive salaries.
The speaker said a number of factors have contributed to the expense of power in Nova Scotia (not the most expensive jurisdiction in Canada, according to McAdam). Increased international demand for coal, a push on building renewable capacity, and the loss of 18-per cent of NSP’s business when two mills shut down have all contributed. The timing is bad luck, according to McAdam.
The NSP spokesperson was leery of being too specific about future rate increases, but gave the impression they should roughly parallel inflation – less with attainment of efficiency goals. But an additional average of around two-per cent per year is necessary for the transition to more renewable power, which needs to account for 40-per cent of power sources by 2020, according to provincial law.
“These are aggressive targets,” he said.
McAdam said the rumour that power from the Sprott wind farm on the marsh isn’t used in Nova Scotia is incorrect.
“We are the customer for that wind farm,” said the executive.
After the speech, he was asked to address the public perception the utility’s largesse with its own employees – particularly executives – rubs the public the wrong way at a time of price increases.
“We’re very conscious of the optics,” he said.
The shareholder rate of return is 9.6-per cent, according to McAdam, in an industry that he said typically gives investors returns of eight- to 12-per cent. As for executive compensation, he said the salaries of top employees are in the midpoint of compensation relative to other companies. Salary surveys are conducted, he said.
“We know we run a tight ship.”
McAdam said they have a Good Neighbour Fund, administered by the Salvation Army, that provides support to low-income users of electricity and oil. When staff levels were cut, the number of executives was also cut from 11 to eight.
Nova Scotia Power has strong oversight, he claimed.
“We get intense scrutiny.”
David Mosley, chamber president, said the time frame of a breakfast didn’t allow for all of the queries people had. He said he’s arranged with McAdam for questions to be forwarded to NSP. He called the presentation “very informative”. He thought it would provide a launching point for more-informed questions.
He said the province’s power rates are extremely high compared to other parts of the country. High rates are an impediment to stimulating business, according to Mosley.
“It’s totally absurd…right off the scale,” he said in reference to the highest salaries paid to management at the company.
He expressed some skepticism about the reassurances NSP is being run efficiently. And he challenged the wisdom of using a biomass burner to generate electricity. McAdam briefly discussed the Port Hawkesbury biomass generator in his address, calling it a great way to keep dollars in the province, and stating, “[there’s] lots of biomass to go around”. Mosley doesn’t believe it’s sustainable, though, and thinks the lobby for land owners is too fractured in the province to barter effectively with big corporate entities.
Jamie Baillie, MLA for Cumberland South and leader of the provincial PC party, wasn’t present for the breakfast. He was asked to address some of McAdams’s comments as reported by this newspaper.
“I believe the [shareholder] rate of return is too high, as it bears no relation to the returns all other Nova Scotians can get today,” he said.
He took issue with executive pay as well.
“There is not a single Nova Scotian that believes the executive compensation at NSP is reasonable,” he said. “They like to compare themselves to some of the biggest companies around. We did our own checking. The CEO of Hydro Quebec, which is 10-times bigger than Nova Scotia Power, makes half as much as the CEO of NSP.”
As for transparency, the MLA clearly thinks there’s room to improve.
“I personally went to the UARB today to argue against NS Power's most recent application to keep secret the results of its recent Fuel Purchase Audit. Nova Scotia Power gets its monopoly status from the people of Nova Scotia, and must be held fully accountable to them. They have yet to show that they understand that, as today's UARB hearings show.”