Powering the future: Green choice program regulations

By Nancy Rubin, K.C. and Lauren Agnew

The long-awaited Green Choice Program Regulations (N.S. Reg. 155/2023) were released by the provincial government on September 8, 2023, offering some clarity into the practical implementation of Nova Scotia’s Green Choice Program (the “GCP”). The purpose of the GCP is to allow large energy users in the province to “subscribe” to renewable energy from independent power producers via Nova Scotia Power Inc. (“NSPI“). The new Regulations were expected to set out participant eligibility, the application process, the billing structure, costs and credits, and program standards and timelines for the procurement and commencement of renewable energy supplies under the GCP.

While the published regulations don’t offer an abundance of detail on each of the expected topics, they do formalize much of the information that was previously made available by the independent procurement administrator, Coho.  A timeline for the project is available on the Nova Scotia Green Choice website, which also offers updates and answers to frequently asked questions for both participants (i.e. large-scale energy consumers) and proponents (i.e. renewable energy suppliers) among other resources.

Participant eligibility

The Regulations define the categories of eligible participants in the GCP: commercial customers or public institutions with a minimum load of 10,000 MWh/year, an aggregated partnership of public institutions that cumulatively meet the 10,000 MWh/year threshold, along with each partner having no less than 1,000 MWh/year.

Eligible participants must further be in good standing with NSPI, only subscribe to electricity that is wholly generated and delivered within the province, and be a customer whose account is located wholly within NSPI’s service territory.

Application process

There will be a 20-day intake window for applications from potential GCP participants, currently estimated to open in December 2023.

Participants can apply to enroll up to 120% of their previous year’s consumption.  The minimum subscription term is five years, renewable every five years, for a total term not exceeding 25 years.

Interestingly, the Minister’s criteria in evaluating applications include whether the applicant has made public climate change or emission reduction commitments, and/or the long-term economic viability of the participant or the accuracy of its energy consumption modelling, among other factors.

Applicants will be notified in writing of their acceptance, deferral or rejection from the program within 45 days of the intake window closing. Formalized subscription agreements, including the terms and conditions of participation in the GCP, are estimated to be executed by June 2024 once the price of the energy is confirmed, no later than 90 days prior to commercial operations beginning. Subscriptions to the GCP are assignable.

Fees, benefits, and credits

Section 12 of the Regulations states that the only costs that Participants will incur are the fixed administrative costs from NSPI, which are not to exceed $1.00 per MWh of eligible subscribed electricity, up to a total of $100,000 per participant per year.

Unfortunately, the billing structure for energy costs and credits under the GCP outside of administrative costs has still not been clarified by the Regulations. The most recently available draft of the participant guide (July 2023) states that the costs and credits for the GCP will sit as a rider on the regular utility bill, simply reflected as two additional line items. The cost of the energy itself will be determined by NSPI and be included in the terms of the subscription agreements to be provided closer to the commencement of the renewable energy supply. The credits are to be calculated based on the direct avoidance of the carbon tax, but again this is not explicitly outlined in the Regulations.

The Regulations provide a definition of “Renewable Energy Certificate” (“REC”).  The GCP fulfils provincial mandates of 40% renewable energy by 2020 and the upcoming target of 80% by 2030.  Under the Regulations, while participants will own the title to all RECs, they will be registered by NSPI and retired immediately.

The program’s associated costs, fees, benefits and credits may be reviewed by the Minister no later than five years after the Regulations take effect.

Proponents

Power Purchase Agreements (“PPAs”) will be extended to successful bidders with new wind or solar energy projects. A draft Request for Proposal (“RFP“) and PPA are currently available for public review.  It is contemplated that a portfolio of five to seven proposals totaling 1,100 – 1,500 GWh (maximum capacity of 150 MW) will be selected.   As part of their bid, Proponents must include a proposed fixed energy rate of no more than $65/MWh, and a commercial operation date before December 31, 2027.  If selected, the proponent’s renewable energy project will become the supplier for GCP Participants, and this Energy Rate will be incorporated into the PPA with NSPI as a fixed price for the duration of the 25-year term.

The current timeline estimates that the submission window for RFPs will close in mid-April 2024, with selected Proponents being notified of their successful bids by July of the same year.

Overall, the Regulations formalize some of the parameters that expectant parties have been waiting to see, and do not contradict any of the information made available to date. However, much of the nuance of the GCP’s execution will still have to be determined by the Minister and NSPI’s ratemaking procedure. Coho invites interested parties to contact them via the website form to request to be added to the GCP mailing list for direct updates.

This update is intended for general information only. If you have any questions on the above we would invite you to contact the author or any other member of our Energy Group.

Click here to subscribe to Stewart McKelvey’s Thought Leadership.