Federal government delays $500 million bailout for Muskrat Falls Power as it seeks to limit Nova Scotia rate hikes – Halifax

The Canadian government is negotiating a $500 million bailout for Nova Scotia’s privately owned power company, saying the money will be used to prevent big increases in electricity prices.

Federal Natural Resources Minister Jonathan Wilkinson announced today in Halifax that Nova Scotia Power needs the funds to cover increased costs caused by delays in the delivery of electricity from the Muscat Falls hydroelectric plant in Labrador.

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Without the funding, Emera’s subsidiaries would have had to increase rates by 19 percent “in the short term,” Wilkinson said.

Nova Scotia Power CEO Peter Gregg said the deal, if approved by the province’s energy regulator, would keep rate increases “at about the rate of inflation” because costs would be spread out over several years.

The company helped pay for the construction of an undersea electricity transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not provided a reliable supply of electricity for the past five years.

These delays have forced Nova Scotia Power to spend more on its own generation.

This report by The Canadian Press was first published Sept. 16, 2024.