What they said
vs. What really happened
Broken Promises on Record
NDP Defend NSP's Rate of Return, Say No Need to Find Internal Cost Savingsprev nextThat's what we call... A Broken Promise
What they said...Nova Scotia NDP premier Darrell Dexter is on record saying there is no need to force a performance audit on Nova Scotia Power and his government believes the power monopoly’s rate of return is “perfectly normal and reasonable.”
On May 30, 2012, former Nova Scotia NDP finance minister Graham Steele told a business audience in Bridgewater that Nova Scotia Power’s rate of return “… is perfectly normal and reasonable for electrical utilities anywhere in Canada or the United States, and if they don’t get it, then private shareholders are going to say, ‘I’m not going to invest in that company.’”
A performance audit examines the inner workings of a company or organization to identify inefficiencies and areas that can be cut to trim costs – the Nova Scotia Liberal Caucus wants Nova Scotia Power to be subject to such audits on a bi-annual basis.
When Nova Scotia Liberal leader Stephen McNeil asked Premier Darrell Dexter if his government would support this Liberal proposal, Premier Dexter replied, “Mr. Speaker, an audit was done just a very short time ago that looked at these issues.” Though the types of audits currently performed on Nova Scotia Power by the Utility and Review Board are not as thorough as a performance audit, he refused to subject NSP to greater financial scrutiny.
An independent energy expert disagrees with the Nova Scotia NDP government and Premier Darrell Dexter on both counts and says NSP’s rate of return is too high and that there are internal savings to be found.
What really happened...
Lee Smith, a managing consultant with La Capra Associates, released a report that said Nova Scotia Power has no intentions of pursuing “…a concerted attempt to minimize costs, particularly in the near term.”
In addition to failing to find internal savings and cutting costs, Smith also criticized NSP’s rate of return. Smith said the return on equity should be lower than the current 9.28 per cent.
Smith is not the only independent expert criticizing NSP’s rate of return.
All Nova Scotia reported University of Toronto professor Laurence Booth was hired by the Utility and Review Board to examine the rate of return. He concluded the power monopoly’s rate of return should be lower and should be as low as 6.95 per cent in 2013.
Here we have two independent power experts disagreeing with the official view of the Nova Scotia NDP government and Premier Darrell Dexter.
The Nova Scotia NDP need to stop protecting NSP from cost cutting measures and they need to stand up for Nova Scotians instead of defending the power monopoly’s rate of return.
© 2012 NS Liberal Party