Nova Scotia Power Allocates $20.8 Million for Coal Plant Refurbishment

Nova Scotia Power has announced plans to invest $20.8 million to refurbish its coal-fired generator, Lingan 2, shortly before its scheduled retirement. This decision arises amid ongoing public hearings before the Nova Scotia Energy Board, where the utility is seeking approval for new power rates for its customers. The spending is particularly controversial given the impending phase-out of coal as a fuel source.

During the hearing, Roland Deveau, vice-chair of the board, expressed frustration over the projected expenditure, stating, “It’s frustrating that ratepayers might have to spend $18.4 million on something that’s gonna be retired in the next year or two.” This figure represents a significant portion of the costs associated with Lingan 2, which is one of four units at the Lingan generating station located in New Waterford, Cape Breton.

The refurbishment is scheduled for 2026 and 2027, with plans to retire the unit by 2028. Company officials indicated that the refurbishment is necessary to maintain the integrity of the unit, as critical components are at risk of failure. Jonathan MacIntosh, director of enterprise asset management at Nova Scotia Power, acknowledged the frustration surrounding the timeline but emphasized the urgency of the refurbishment to avoid potential operational failures.

Nova Scotia Power had initially targeted the early 2020s for Lingan 2’s retirement, but increasing electricity demand and delays in the rollout of renewable energy sources have pushed this date back. MacIntosh cited the slow progress on projects like Muskrat Falls and various local wind farms as contributing factors to the extended timeline. He noted, “These are the risks that we have been managing since its proposed retirement date. But now we need to go and open the machine to continue to validate its integrity.”

The proposed costs for refurbishing Lingan 2 are included in Nova Scotia Power’s application for new power rates for 2026 and 2027. However, the approval of these rates does not guarantee authorization for the $20.8 million refurbishment, which will require a separate application to the board.

Vincent Musco, a partner at the energy consultancy firm Bates White, raised questions about the justification for such a significant investment in Lingan 2. He remarked that while cyclical repairs to power-generating equipment are generally warranted, the proposed costs are markedly higher than those in recent years. According to Bates White, expenditures on Lingan 2 in 2023 and 2024 were below $1.7 million. Musco stated, “It’ll be very important for the board to be comfortable that the unit is truly needed.”

The timeline for retiring Lingan 2 is now closely linked to the completion of new fast-acting generators, which are under the purview of the Independent Energy System Operator (IESO). The IESO is expected to solicit bids this year for contracts to establish one or two natural gas power plants in Pictou County, though the exact timeline for these projects remains uncertain.

As Nova Scotia Power navigates these complex challenges, the decisions made in the coming months will significantly impact both energy policy and consumer costs in the region. The energy board’s evaluation of Nova Scotia Power’s spending plans will be a critical factor in determining the future of coal in the province and the transition to a greener energy grid.