Nova Scotia Power to spend $20M on generator that is about to retire

Nova Scotia Power plans to spend millions of dollars to refurbish one of its coal-fired generators just before retiring it to meet a legislated requirement to phase out use of the fossil fuel.

The issue arose at a public hearing in front of the Nova Scotia Energy Board about the utility’s request to change power rates for its customers, which wrapped up Tuesday afternoon.

“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,” said Roland Deveau, vice-chair of the board.

The amount Deveau referred to is just one piece of the forecasted spending for Lingan 2, one of four units at the Lingan generating station in New Waterford, Cape Breton. An additional $2.4 million is also on the horizon, for a total of $20.8 million. 

The refurbishment is expected to happen in 2026 and 2027. Company officials said the plan is to shut down Lingan 2 in 2028.

Jonathan MacIntosh, director of enterprise asset management at Nova Scotia Power, told Deveau he shared the frustration, which is why the company has been delaying doing the work. But it cannot put it off any longer, he said.

Nova Scotia Power initially planned to retire Lingan 2 in the early 2020s, but the date has repeatedly been pushed back because of growth in electricity demand and delays to new renewable energy generation. MacIntosh pointed to the slow pace of completing Muskrat Falls and some local onshore wind farms.

MacIntosh said two key components of Lingan 2 are now subject to failure, which would have “massive impacts on the plant and it could have collateral damage on the [other units].”

“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,” he said.

The costs are baked into Nova Scotia Power’s application to set new power rates for 2026 and 2027. However, approval of the new rates isn’t an explicit approval to spend $20.8 million on the coal plant. The company will have to make a separate application to the board for that expenditure.

Vincent Musco, a partner at energy consultancy firm Bates White, said it’s not clear that spending that sum of money to keep Lingan 2 online is justified.

Musco is one of several outside experts the board is consulting with to assess Nova Scotia Power’s rate application.

He said that conceptually, the need for cyclical repairs to power generating equipment “makes sense,” but the amount proposed for Lingan 2 is substantially higher than recent years. In its submission to the board, Bates White noted spending on Lingan 2 in 2023 and 2024 came in under $1.7 million.

“It’ll be very important for the board to be comfortable that the unit is truly needed,” Musco said at the hearing this week.