Globe and Mail Sat. 8th of MayThis certainly was the culprit:
Emera's tough task: getting off coal
By KEVIN COX
From Saturday's Globe and Mail
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Halifax — Emera Inc. continues to make money from increasingly unpopular coal-burning power plants, but company executives would rather talk about the wind.
The image of whirling windmills churning out pollution-free power is an attractive one for the Nova Scotia utility that is widely known for the smoke from the stacks of its power plants that burn oil and coal.
There is more than image at stake in the debate over how to produce power for the people of Nova Scotia. Emera's main subsidiary, Nova Scotia Power Inc., depends on coal and oil to produce as much as 80 per cent of its electricity.
The company is facing demands from both the provincial and federal governments to cut plant emissions at a time when the price of both coal and crude oil are rising rapidly.
Emera executives talk about the possibility of bringing in large wind turbines and converting plants to run on natural gas, but they know that the alternatives are expensive and would mean hefty and unpopular rate increases. So they are looking for ways to make coal into power cleanly.
"New mines are going to have to be opened and we've got to find new ways to burn it because we can't continue to pollute the atmosphere as we have in the past," Emera president David Mann told reporters after the company's annual meeting.
Mr. Mann, who will retire as Emera president this fall, said the company is converting a power station to burn natural gas and is looking at the purchase of a massive wind turbine for about $10-million. However, he said, the company will be burning coal for a long time.
Jonathan Norwood, an analyst at Halifax-based Beacon Securities, noted in a recent report that shifting to wind or other cleaner sources of power would force the firm to dramatically increase power rates.
"Unless ratepayers are willing to pony up potentially two to three times more for power, which could cripple economic growth in the province, the elimination of coal-fired generation will not be feasible any time soon."
In the report, Mr. Norwood lowered his rating on Emera's stock, saying he now expects it to underperform the market.
Most of the coal-burning stations, which produce 55 per cent of the province's power, were built 30 years ago. Emera is now building a large docking facility at the Strait of Canso so it can receive large shipments of low-sulphur coal from mines in countries such as Russia and Indonesia.
The firm is confident it can switch fuels and use emission-reduction technology to meet the provincial requirements that sulphur dioxide emissions be cut 25 per cent by next year and another 25 per cent by 2010. The company has already met the provincial requirement that it cut mercury emissions by 30 per cent.
Emera comprises two utilities, Nova Scotia Power and Bangor Hydro Electric Co. in Maine. It also owns a 12.5-per-cent interest in the Maritimes & Northeast Pipeline that ships gas from wells offshore Nova Scotia to the U.S. Northeast.
Some environmentalists denounce the coal- and oil-burning plants as dinosaurs that produce 85 per cent of the province's air pollution. Both the provincial and federal governments are demanding reductions in the company's emissions of sulphur dioxide, nitrous oxide and mercury.
Emera shares have been hovering near $18 in the past week after rising as high as $19.80 in March.
Earlier this week, Emera posted profit of $46.5-million or 43 cents a share for the first quarter of 2004, compared with $54.7-million or 51 cents a year ago. Part of the reduction in profit was blamed on the rising cost of oil and coal fuels.
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