10/23/2013 03:47 EDT | Updated 12/23/2013 05:12 EST

Hearings on Maritime Link commercial agreement to be held in early November

HALIFAX - Nova Scotia's energy regulator says it will hold hearings next month on a commercial agreement aimed at satisfying its concerns about the proposed $1.5-billion Maritime Link project.

The hearings will be held at the offices of the Utility and Review Board in Halifax from Nov. 6 to 8.

Earlier this week, Nova Scotia energy company Emera said it had met conditions outlined earlier this year by the board by reaching a commercial agreement with Nalcor Energy, Newfoundland and Labrador's Crown-owned utility.

The Maritime Link involves building a subsea cable that would link Nova Scotia with Newfoundland, allowing Nova Scotia to buy energy generated by the Muskrat Falls hydroelectric plant, which is under construction in Labrador.

In July, the board said Emera (TSX:EMA) would have to ensure that Nova Scotians have access to the best price for surplus electricity from Muskrat Falls based on market conditions.

The regulator concluded that if that condition was met, the Maritime Link would represent the cheapest energy solution for Nova Scotia, but only by a narrow margin.

Ed Martin, the chief executive of of Nalcor, said in an interview on Wednesday that the latest deal is a "win-win situation."

"We've worked hard to read what the Utilities and Review Board is seeking. Our goal is to meet those needs. ... We've worked extremely hard to see what's good for Newfoundlanders, what's good for Nova Scotians," said Martin, who was attending an awards night in Halifax.

Chris Huskilson, the chief executive of Emera, also said in an interview he is confident the deal will meet the board's requirements.

"We think the agreement we've arrived at very strongly meets the condition," he said.

The board confirmed Monday that a subsidiary of Emera will hold a technical conference to explain the agreement Monday at the Westin Hotel in Halifax.

A panel of experts from Emera will respond to questions from the board and intervenors. However, a board spokeswoman said it was unclear whether the conference would be open to the public.

Todd McDonald, spokesman for the Lower Power Rates Alliance of Nova Scotia, said it appears Emera has altered the proposal it originally submitted to the board earlier this year, raising questions about how much electricity Nova Scotia will actually get from Muskrat Falls and whether the original price predictions will hold.

Huskilson said the new arrangement does use a forecast that predicts lower energy consumption by Nova Scotia, but he said the lower forecast was what the board called for.

He also said the agreement's assumption of a smaller amount of market-priced energy won't change the existing forecasts for what the project will cost Nova Scotians.

Huskilson said the new deal still means the Maritime Link will result in electricity price increases of less than one per cent annually for five years, and will then cause rates to fall.

"That is still consistent and still what we believe about the project," he said.

McDonald said he also has questions about how water levels in Labrador will affect the price and amount of electricity Nova Scotia can buy.

Martin said Nalcor is confident with its projections of surplus, market-priced electricity being available from Labrador.

"Confidence would be an understatement," he said.

"It's there, it's guaranteed to be there, it's going to be there. Hands down, it's a fact."

Nalcor Energy has a 35-year deal with Emera (TSX:EMA) to supply Nova Scotia with 20 per cent of the energy from Muskrat Falls in exchange for paying 20 per cent of the costs of the $7.7-billion project.

However, opponents of the deal have questioned how much it would cost Emera to buy energy in excess of the 20-per-cent block for which it has already negotiated an annual price.

According to Emera's latest filing, submitted Monday to the board, its so-called Energy Access Agreement with Nalcor "provides commercial assurance that (Emera) will be the first potential Nalcor customer to have access to market-priced energy that Nalcor has available for export."

The agreement is subject to the board's approval, but a spokeswoman for the board said it was unclear when a final decision will be made.

The agreement extends to 2041. Emera and Nalcor Energy are aiming to have power flowing from Muskrat Falls in 2017.