Nova Scotia Power handed $750K fine for failing to meet performance standards

Nova Scotia's electric utility has been fined $750,000 for failing to meet 2022 performance targets set by the provincial regulator.

The Nova Scotia Utility and Review Board issued a statement Wednesday saying privately-owned Nova Scotia Power Inc. failed to fully satisfy five of 14 performance targets dealing with reliability, restoring power after adverse weather and service installations.

The board found that even though the utility has increased investments in its transmission and distribution infrastructure to deal with increasingly powerful and more frequent storms, it has failed to achieve certain reliability targets in each year since the standards were established in 2016.

"Customers are entitled to receive an appropriate level of service for the rates and fees they are charged by the utility," the board said in its statement. "It is not acceptable that non-compliance of the performance standards has become a normal occurrence."

In 2020, the board ordered Nova Scotia Power to pay a $250,000 penalty, and in 2022 the penalty rose to $375,000.

"If more frequent and damaging storms are becoming the 'new normal,' N.S. Power needs to ensure that its performance, not just its investment plans, keeps up with these changes," the independent regulator said.

Addressing challenges of climate change

In May, Nova Scotia Power filed a response to the board's latest findings, saying the utility's failure on seven occasions in 2022 to meet the standard for restoring power within 48 hours of severe weather was the result of the widespread damage caused by post-tropical storm Fiona last September.

As a result, the board agreed to remove some Fiona-related outage data, as they did after post-tropical storm Dorian caused widespread outages in 2019. But it concluded a penalty of $750,000 for the utility's 2022 performance was warranted.

"The board recognizes that the inclusion of Hurricane Fiona [would have]a significant impact on ... N.S. Power's performance standards reporting," the board said in its statement.

"However, the increasing intensity, severity and frequency of adverse weather events are not new phenomena.... It is incumbent upon N.S. Power to appropriately address the challenges of climate change and adverse weather events."

In its response filed in May, Nova Scotia Power said it welcomed the standards as part of the "strong regulatory oversight" of its business. "Performance standards provide the transparency and accountability that customers deserve."

As for customer service standards, the board noted that even though the utility had identified the need to increase staffing in 2019 after it recorded a 26 per cent increase in the hours required for customer-driven work, it "failed to take the action needed to avoid failures in meeting its customer service targets."

Nova Scotia Power onworsening weather

In an emailed statement Wednesday, Nova Scotia Power said the damage from Fiona was unprecedented. "Worsening weather is a reality in Nova Scotia, and it's something we're working hard to address," the statement said. "Our performance in 2022 reflects that reality, with twice as many extreme weather days than previous years."

The utility said it has been investing $180 million annually to improve reliability and is hiring more workers to keep up with Nova Scotia's population growth.

An advocate representing Nova Scotia's small businesses told the board that Nova Scotia Power must do better.

"The [small business advocate]is very concerned that NSP has yet to have a year in which all the performance standards were met," their response says. "The targets are set in coordination with NSP and are based on what is considered reasonable to achieve. A continuing inability to meet those targets raises significant concerns."

The board noted that it could not impose a fine greater than $1 million. Last year, the Nova Scotia government introduced a bill to increase the maximum fine to $25 million, but that legislation did not become law until April 2023. At the time, provincial Natural Resources Minister Tory Rushton said the province wants to hold the private utility more accountable for power outages and performance issues.

In 2022, Nova Scotia Power's parent company, Halifax-based Emera Inc., reported $945 million in net income.