04/08/2014 04:18 EDT | Updated 06/08/2014 05:59 EDT

Nova Scotia's premier defends efficiency bill in face of opposition criticism

HALIFAX - Premier Stephen McNeil found himself Tuesday defending legislation that would remove an energy efficiency fee from energy bills as Nova Scotia's opposition parties said the bill does not meet a Liberal promise to require Nova Scotia Power to cover the costs of efficiency programs.

The promise to remove the efficiency fee from power bills — branded by the Liberals during the election campaign as an unaffordable "NDP tax" — and force Nova Scotia Power to pay for efficiency programs was a key commitment in the party's platform.

Legislation introduced Monday would remove the fee from power bills as of Jan. 1, but it would also allow Nova Scotia Power to download the costs to customers of running efficiency programs over eight years beginning in 2016.

McNeil was asked by reporters outside the legislature whether there was a substantive difference between what was promised and what was in the legislation.

"Not at all. We will be reducing power rates by the efficiency tax coming (off) this Jan. 1," he said. "The only way the efficiency programs will be purchased is if they provide even further savings for ratepayers in this province."

McNeil also pointed out that Nova Scotia Power has agreed to pay $37 million over the next 10 years to upgrade all low-income electrically heated homes in the province.

He was asked whether that program was a compromise because the government realized the effect of forcing Nova Scotia Power to pay for efficiency programs would eat significantly into its annual profit.

"It was part of the conversation through the Department of Energy," he said. "It was paramount that we ensured there were programs available to make sure low-income Nova Scotians ... would be able to reduce some of their energy costs."

Progressive Conservative Leader Jamie Baillie said he doesn't buy McNeil's rationale, adding that the premier guaranteed voters during last fall's campaign that Nova Scotia Power would pay for efficiency programs out of its profits.

"Not one dollar is going to come out of their profits," said Baillie. "Every dollar is going to come back out of our rates and that's a broken promise."

NDP energy critic Frank Corbett said while power bills may be cheaper for an interim period once the fee is removed, consumers will gradually pay more as the cost of paying for efficiency programs is recovered through power rates.

"It will have the effect of taking the efficiency fee off, but the reality is it will still be paid for by ratepayers," Corbett said.

Efficiency Nova Scotia says the fee is about $5 per month for a typical residential customer.