Could Nova Scotia Power revert to public ownership again?

CBC

6 hours ago

Nova Scotia Power was privatized in 1992 by the Progressive Conservative government of Premier Donald Cameron in a move viewed as a way to control the province's deficits and debt servicing costs.
In the wake of a massive data breach that affected the utility this spring, there have been renewed calls from some people for the province to buy back the utility and make it provincially owned once again.
There is precedent for power utilities being removed from private ownership in the United States.
Ursula Schryver is a senior vice-president at the American Public Power Association that represents publicly owned utilities throughout the U.S., with more than 55 million customers.
She spoke to CBC Radio's Information Morning Nova Scotia about the process of returning a utility to public hands and the challenges involved.
Their conversation has been edited for clarity and length.
Q: You refer to the process of making a power utility into a public not-for-profit as "municipalization." What are the advantages of municipalizing a utility?
The overarching benefit and tenant of public power is local control and local decision-making. With public power utilities, the community and citizens have input on the priorities of the utility, whether that be investing in upgrades to the system, keeping rates low, or adding more renewable energy to their portfolio, or really just providing whatever services the community desires. Public power utilities are governed by local elected officials, either city councils or elected or appointed utility boards. So citizens have a say in how the utility is operated.
They can participate in public meetings or even vote the elected officials in and out of office if the utility isn't being run in a way that reflects community priorities. That typically leads to lower rates because you don't have stockholders where you're sending money away. All the money goes back into the community. Public power utilities have high reliability because the crews live and work in the community.
Q: What has to happen to municipalize a utility especially given that the current owner may not want to give it up?
Typically the municipalization effort starts with a leader or a group of individuals that pushes forth the idea because of dissatisfaction with the status quo. So then a community will do a feasibility study to look at whether it is financially feasible. Could it make sense? Is it financially feasible? Is it legally possible? Then they look at the evaluation of the system to determine how much the system is worth. At that point there is a lot of community education just to get people to understand what the purpose is and what the benefits are. And then there will typically be a referendum where people decide, vote whether to continue on.
Q: What are some cons that might come up to counterbalance the benefits?
The biggest drawback and challenge is the industrial utility not being a willing seller and fighting the effort. And they will, they'll spend a lot of money and the process will be dragged out through legal proceedings. Because obviously if the community takes over the utility, that is lost revenue, lost customers for the investor utility. So the biggest drawback is it takes years for these efforts to come to fruition. But you know, there have been 20 utilities that have formed in the last 25 years. So it happens. It just takes time, it takes commitment and a willingness of the community to really understand what the benefits are and evaluate it appropriately.
Q: Have some of these municipal utilities run into debt issues or have had to increase rates monumentally? Those are two things that come up whenever people muse about turning Nova Scotia Power back into a public utility.
Having a public power utility allows you to focus on the issues that are most important to your community. So if keeping rates low is a priority, then that will be the focus.There's been situations like Winter Park, Fla., formed 20 years ago now and they had issues with reliability. So when they took over the system, they invested the money back into the system. They moved their lines underground and really focused on the reliability. Other communities are looking at environmental efforts or renewable energy. So they invest their money there. And so maybe there it may go up a little bit. It really depends on the interests of the community and what you want your focus to be.