Premier Tim Houston tabled legislation at Province House on Wednesday that would force a rethink of how Nova Scotia Power is regulated, asking the independent Nova Scotia Energy Board to examine a performance-based model that links the utility’s earnings to measurable outcomes.
What the review would examine
The government says the current system — a cost-of-service model — allows Nova Scotia Power to recoup approved operating costs and capital investments, plus a return on equity. The proposed alternative, performance-based regulation, would tie portions of the utility’s income to specific performance markers such as customer service and reliability.
“We want to examine whether changing how Nova Scotia Power earns its income will result in better service and better accountability to Nova Scotians, to communities and, really, for our growing economy,” the premier told reporters.
Under the legislation, once the bill is passed the Nova Scotia Energy Board would have 30 days to prepare for the review. The government has said the board’s report must be made public within 60 days of receiving it. The bill does not set a firm deadline for how long the review itself would take.
Why the government is proposing the change
Mr. Houston framed the move as an effort to drive better service and accountability from the province’s largest electricity utility, and to ensure regulation keeps pace with the needs of Nova Scotians and the province’s economy. Government officials point to comparable exercises in other jurisdictions — including Ontario, Alberta, New York state and Hawaii — as precedent for exploring performance-based approaches.
The premier said he is not concerned a review would damage Nova Scotia Power’s credit rating, arguing the approach has been used elsewhere and is therefore "expected and normalized in the markets." Beyond that assurance, the government did not outline immediate changes to rates or to the utility’s existing financial arrangements.
How the two regulatory models differ
At a basic level, the two models steer the utility’s incentives in different directions:
- Cost-of-service: Recovers approved operating expenses, capital costs and returns on equity; traditionally used to ensure utilities can finance investment and operations.
- Performance-based: Links profits to measurable outcomes such as reliability and customer service, with the goal of incentivizing efficiency and improved service delivery.
| Feature | Cost-of-Service | Performance-Based |
|---|---|---|
| Primary focus | Cost recovery and investment stability | Service quality and efficiency |
| Incentives | Predictable returns tied to approved costs | Rewards or penalties tied to specific metrics |
What could change for customers
The government has framed the review as exploratory: the Energy Board will study whether a shift could produce better outcomes for customers. Any decision to adopt a new model would rest with the government after the board’s review is complete and public.
For ratepayers, implications could include a shift in how price adjustments are determined, new performance incentives or penalties that affect utility profit, and potentially different priorities in investment decisions — for example, more emphasis on reliability projects and customer-facing improvements. The legislation itself does not mandate immediate rate changes.
Next steps and timeline
If the bill passes, the Energy Board’s preparatory window is limited to 30 days, while the government commits to publishing the board’s findings within 60 days of receiving them. The length of the review, the scope of evidence the board will consider and whether hearings will be held were not specified in the legislation introduced Wednesday.
The government will ultimately decide whether to change the regulatory model. Until then, Nova Scotia Power continues to operate under the familiar cost-of-service framework, while the province signals a willingness to reassess how the utility is held accountable to customers and communities.
This story will be updated as the Energy Board’s timetable and the government’s plan for public engagement become clearer.
