Tidal power application set aside
NSP plans to write-down Annapolis generation station
Nova Scotia Power Inc. (NSP) will have to prove that decommissioning the Annapolis Tidal Generating Station is the “least cost option” for ratepayers before the Nova Scotia Utility and Review Board will approve writing down the remaining undepreciated value of the aging power plant.
In a ruling released on Jan. 13, the review board said it has insufficient evidence to find that the asset is “not used and not useful” and so it declined to approve a proposal by NSP to amortize the undepreciated value and remaining construction work at the generating station, which the company estimates would total $27.7 million over 10 years, from 2021 to 2030.
However, the board left the door open for the electrical utility to reapply to write down the remaining value of the tidal power plant if it also included a decommissioning application. It stated the power company is to report on the status of the matter by Jan. 31, 2023, and it is holding the application in abeyance.
The Nova Scotia government built the causeway across the Annapolis River in 1960 in an effort to control water flow and protect agricultural lands along the river. The dike system protecting farmland along the river had been deteriorating.
Sluice gates were designed to control water flows and storm surges in the Annapolis Basin, and it was also determined that it could enable hydro power generation.
The generating station was built as part of a short-term research initiative involving Tidal Power Corp., the province and the federal government. It was commissioned in 1984 as a "short-term pilot project," according to Nova Scotia Power.
At the time, it was one of only three tidal barrage hydro generating stations in the world. Tidal Power took title to the lands upon which the generating station assets were located and agreed to take responsibility for the operation and maintenance of the sluice gates.
NSP has complained over the past few years that it has experienced operational and maintenance issues with the generating station. In February
2021, it applied to the review board for approval to treat the station as “not used and not useful,” which would lead to the write-down of the undepreciated value of the plant.
The provincial power utility acknowledged that its application to the board, if approved, “would effectively take the generating station out of service and its remaining undepreciated value would be recovered from ratepayers over 10 years.”
If its application to amortize the undepreciated value of the generating station was approved, the power utility indicated to the review board it intended to submit a capital work order after it had better determined the costs to decommission the station.
The board indicated in its decision that it is “not satisfied that the company has provided sufficient evidence to establish that decommissioning of the generating station is the least cost alternative available to N.S. Power. As such, the board is not in a position, at this time, to find that the accounting treatment ... should be approved.”