Emera says Nalcor 'hasn't been clear' about Muskrat Falls timeline

The CEO of Halifax-based Emera Inc. distanced his company Tuesday from risks associated with the troubled Muskrat Falls hydroelectric project in Labrador, while at the same time downplaying delays at the megaproject.

"Nothing has really changed. We are at the same place we were originally and we are continuing to proceed," Chris Huskilson, president and CEO of Emera, told analysts in a conference call on Emera's first quarter results.

The Muskrat Falls project is designed to supply energy to 220,000 homes. Emera is a partner in the project, committing to fund 20 per cent of the overall cost by building the $1.5-billion Maritime Link, which will ship electricity to Nova Scotia through a subsea cable from Newfoundland.

Last month, Ed Martin, the long-time CEO of Nalcor the Newfoundland Crown corporation building the hydro development resigned, as did the entire corporation's board.

Muskrat Falls under review

A new Nalcor CEO, Stan Marshall, was brought in to take over. He promptly said Muskrat Falls is under review.

"Obviously, Nalcor has a new CEO and we are looking forward to working with Mr. Marshall and we think the relationship will continue," Huskilson said.

"Fundamentally, we have to look at it through the Maritime Link and it is on time and on budget right now and we look forward to that being in service in late [2017]."

Huskilson was repeatedly asked about Muskrat Falls, including Emera's exposure.

'We haven't taken any risk'

"We are not constructing either the generation facility or the transmission in Labrador or Newfoundland and so we haven't taken any risk, relative to those projects, at all. We have taken risk relative to the Maritime Link project; that is the project we are controlling and in fact building," he said.

"As it relates to the timing of the generation, Nalcor hasn't been clear about what they believe the timing is at this point. I think what we know is it is somewhat delayed and so we're planning around that."

Project delays

In Nova Scotia, Emera subsidiary Nova Scotia Power has submitted an application for a three-year rate stability plan. Nova Scotia Powerhas told regulators it expects a slight delay in the arrival of Muskrat Falls, from January 2018 to April 2018.

Consultants hired by the regulators say amore prudent expectation would be arrival in the spring of 2019.

Questions have also been raised about the impact of any Muskrat Falls delay on NSP's ability to meet legislated requirement to increase its use of electricity from renewable sources to 40 per cent by 2020.

The utility is counting on Newfoundland and Labrador Hydro for 10 per cent of its electricity supply. Huskilson told analysts Nova Scotia Power's2020 renewable requirement will be met.

Timing isn't clear

Huskilson said he is awaiting an update from Nalcor on the latest cost and timing for Muskrat Falls.

"I don't think the timing is completely clear right now. I think that's something Nalcor wil update when they are ready to do that. Obviously we look forward to that update."

In its 2016 first quarter results, Emera reported a drop in net income or profits to $44 million, compared to $160 million in the first quarter of 2015.

The company blamed acquisition costs associated with its purchase of Florida utility Teco Energy, lower revenues from subsidiaries such as NSP due to a warmer winter, and currency fluctuations.