Emera’s Cynicism Reveals Why Public Services Should Not Be In Private Hands
The Saturday Huddle is a weekly column that features opinion, analysis and reflections on Huddle stories, podcasts and business news in the region. Trevor Nichols is Huddle’s associate editor, based in Halifax.
This week, Nova Scotia Power faced a storm of criticism and backlash for a proposal submitted to the Nova Scotia Utility And Review Board.
The company, which is owned by Emera, told the regulator it wants to start charging extra to customers who generate solar power.
The plan was to add a new fee to its net metering program that would mean future solar panel customers pay $8.00 per kW of “installed capacity” per month.
The new fee would have made it much less attractive for residents to install solar arrays on their homes. Some businesses said it would end up costing them thousands of extra dollars to use solar power.
Nova Scotia Power initially defended the move. But after more than a week of outrage and threats from the provincial government, the company scrapped the plan.
RELATED: Solar Advocate Says N.S. Power Proposal Will Cripple Solar Industry
We are in the middle of a climate catastrophe caused largely by humans burning fossil fuels.
The fact that, in 2022, Emera would even entertain, let alone pitch, the idea of extra fees for clean energy reveals how cynical the company’s priorities are.
I’m sure its shareholders are thrilled.
However well or badly Emera does its job, the company is guaranteed to make a “reasonable profit” operating Nova Scotia Power.
The way this “reasonable profit” is calculated is complicated, but at its core it means that, after Emera pays for fuel, repairs, capital projects, and other expenses, nine percent of the money you spend on your power bill goes straight to the company as profits.
I’ve sat in on several Emera investor calls and executives talk constantly about these “regulated investments.” They’re a real selling point for investors because they essentially mean the company profits no matter what it does.
Take a look at the material Emera gives to investors and you’ll find all kinds of references to the company’s “consistent” shareholder returns.
After listening to Emera executives talk to shareholders, it’s tough to take them at face value when they appear before the Utility and Review Board wringing their hands about increased costs.
Their proposed tax on solar power lays bare their cynical pursuit of profit.
Which brings me to the real reason I’m writing this column. Believe it or not, I’m not here to simply bash Emera. My problem with Emera isn’t necessarily how it runs Nova Scotia Power, it’s that it’s even running it at all.
Corporations will pursue profit above everything else. It’s essentially what they’re designed to do. That corporate mandate is exactly why public utilities should never be in the hands of private companies.
In New Brunswick, the province has kept power generation in the hands of the public, with the Crown corporation NB Power.
Now, NB Power is far from perfect.
The organization is in massive debt and regularly misses revenue and debt reduction targets. Earlier this year, auditor general Kim Adair-MacPherson slammed the corporation for bad forecasting and a sub-par debt management plan.
RELATED: Auditor General Says NB Power Needs To Prioritize Debt Repayment
But however badly managed NB Power is, there’s still an accountability structure holding the utility to task.
While Nova Scotia Power is ultimately accountable to its shareholders, NB Power is accountable to the people of New Brunswick. The simple fact that the Auditor General can weigh in on NB Power’s performance is critical.
If New Brunswickers don’t like what’s happening with their utility, they ultimately have the power to change it. Because it’s a public entity, the government could completely overhaul it if it wanted to and citizens can use their voting power to make officials do that.
In Nova Scotia, we have no such power.
Public pressure can sometimes move the needle slightly (although it rarely does). Politicians can legislate around the edges and have some impact.
But Emera essentially gets to do what Emera wants to do.
Companies pursuing profit is not an inherently bad thing. I mean, I write for a business news publication, I’m all for the capitalist enterprise; I’ve seen how private businesses can create efficiencies, drive the economy, make goods cheaper.
I can’t blame Emera for looking out for its shareholders. But what worries me is when those shareholders’ priorities are pitted directly against average Nova Scotians.
The brute forces of capitalism don’t belong anywhere near the public services essential to people’s health and survival. I don’t want executives more beholden to shareholders than the public making decisions that affect who’s with or without power.
Because if the choice is between spending more to ensure the lights stay on in East Dalhousie, or letting those folks sit in the dark to give a better return to their shareholders, I don’t trust the execs to make the right choice.
And if they make the wrong choice, nine percent of my power bill goes directly into their pockets, anyway.
It’s probably too late to take back Nova Scotia Power and make it a public utility again.
But Emera’s pursuit of profit above the wellbeing of its customers should be blazing in the mind of every politician, every time they even think about privatizing a public service.
Feedback? E-mail Trevor Nichols: [email protected]