Nova Scotia Considers Linking Utility Earnings to Performance

Nova Scotia is considering a new regulatory system that would tie part of an electric utility’s earnings to the quality of service it provides.

Bill 263 directs the Nova Scotia Energy Board to study a performance-based regulation model. Measures could include reliability, customer service, affordability, efficiency, safety, resilience and progress toward cleaner energy.

A utility could face financial consequences when it misses established targets and earn incentives when it meets or exceeds them.

Nova Scotia has traditionally used a cost-of-service model. That approach allows a regulated utility to recover approved operating and capital costs while earning an authorized return.

The Energy Board has 30 days to review the proposed model and submit recommendations to the provincial government. The review must consider ratepayer protection, reasonable rates, service quality, capital investment and the utility’s opportunity to earn a fair return.

The proposal would not change the existing practice of passing approved fuel costs to customers.