Nova Scotia Power bond rating downgraded by credit rating agency DBRS Morningstar

The agency says the downgrade is due to what it calls the ‘deterioration in the regulatory environment for the firm’

CITYnews halifax\ Canadian Press

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HALIFAX — A prominent credit rating agency has downgraded the bonds of Nova Scotia’s electrical utility amid the company’s conflicts with the provincial government.

In an announcement published on Tuesday, DBRS Morningstar dropped the rating one notch to BBB high from A low for Nova Scotia Power, an Emera Inc. subsidiary. The agency said the downgrade is due to what it called the “deterioration in the regulatory environment for the firm.”

Early last month, Nova Scotia’s Progressive Conservative government capped power rate increases over the next two years to 1.8 per cent — excluding increases linked to fuel costs and energy efficiency programs.

The rating agency said the rate caps are a problem because of the “significant investment” needed to phase out the utility’s coal-fired generation plants by 2030.

DBRS Morningstar said the utility can improve its rating if the provincial government doesn’t interfere in the next rate increase application.

The province’s Department of Natural Resources and Renewables released a statement Wednesday saying it has a responsibility to protect ratepayers.

“It is up to (Nova Scotia Power) to manage its relationships with its stakeholders,” the statement said.

“We expect them to work within their considerable resources to produce power that is affordable, reliable and clean. We are controlling what we can control to protect the ratepayers of Nova Scotia.”

This report by The Canadian Press was first published Dec. 21, 2022.

The Canadian Press