Riverport Electric Light Commission AGM

Building maintenance is a minimal cost however the building is no longer in use by the Commission. Without staff to operate the building, maintenance costs are irrelevant. The building is no longer suitable for use as a utility office and RELC no longer has the staff to operate it. Concerning sale price, there has been interest expressed in purchasing the building, however it is difficult to predict the likely proceeds of sale. Eliminating the ongoing liability for the building and enabling this property to be otherwise utilized to the benefit of the community provide compelling rationale for its sale.

As outlined in the Riverport Electric Light Act:

Right to vote 

s15.   At all public meetings to be held under this Act every owner of property within the district who is duly qualified to vote thereon at the date of any such meeting for the election of a Municipal Councillor for the Municipality of Lunenburg, shall be an elector, and the right of voting shall be restricted to such electors.

The Riverport Electric Light Act anticipates that votes will be carried by a majority of those present at a duly advertised meeting and the Commission has made every effort to adhere to this legislative requirement. Preparation of a list of electors was deemed to be an unnecessary and costly process, whereas all those present who elect to participate in voting at the meeting are considered to be attesting to their eligibility (this was outlined at the AGM and will be outlined again at the special meeting) and attendees will be required to sign in  and indicate thereon whether they are eligible to vote. This record can then be used to determine the number of eligible voters at the meeting. Furthermore, the Municipal Clerk cannot provide a list of eligible electors since this information is returned to the Province after a Municipal election. Attendance at the meeting is considered necessary for voting, and per the legislation it is a majority of those present and eligible to vote whose support is required for passage of a resolution.

The 'Electric Utility Partnership' document on this site relates to this agenda item. Since the resolution to be put forward at the July 23rd meeting is as follows:

WHEREAS the Riverport Electric Light Commission was established in

1920 with governing legislation which has gone largely unchanged

since that time; and,

WHEREAS the structure of the Commission as established in the

Riverport Electric Light Act has become unsustainable and alternatives

may offer improved long-term sustainability;

THEREFORE BE IT RESOLVED that the Commission explore options for

structural change and propose a resolution in this regard to a future

meeting of the membership.

...then the options for Structural Change are yet to be discussed among the RELC Commission and customers. It is hoped that this platform discussion area will assist in these discussions alongside resident meetings.

RELC has contractually committed to purchasing energy from the Ellershouse Windfarm but did not invest in the project.

There is little information available to the current Commissioners, however we do not currently have particular cause for concern regarding fraud or embezzlement in prior years (despite the turnover of staff and Commissioners). The 2022-23 audit which as carried out by Belliveau Veinotte found no evidence of fraud. Belliveau Veinotte has also been contracted to conduct the 2024-25 audit which will be made publicly available on completion.

RELC Treasurer Merrill Zinck’s financial report to the July 24^th AGM noted higher than typical costs for the period including regulatory costs (which related to the General Rate Application process with the Utility & Review Board, a process which had not taken place for over 15 years) and management wages (which related to the full-time manager position, now discontinued in favour of lower cost services from Town of Mahone Bay), as well as the noted capital spending. The majority of the shortfall can be attributed to capital spending without financing in place.

Has there been a cost analysis regarding continued operations vs allowing the concession to be bought/subsumed? Only on a preliminary basis but this analysis will certainly be undertaken and publicly reported presuming the membership sees fit to pass the resolution in this regard on the 23^rd.

In regard to cost effective repairs and upgrades, RELC has increased capacity in project management, external financing and communications through the current arrangement with Mahone Bay – but without significant capital financing capability RELC won’t be able to move forward with needed investments. A primary motive for structural change would be to improve our capacity for capital financing.

There are currently 890 customers in RELCs territory with 34 (3.8%) solar installs.

Certainly sale of excess renewables to Nova Scotia – should such an opportunity ever exist for RELC – is an option; as an independent utility RELC is well-positioned to partner with private renewable developers.

Costs per KWh for customers are outlined in the report by the Treasurer. Average Nova Scotia Power customer rates are slightly lower than RELC’s today (~5%). While Nova Scotia Power rates are likely to increase in the future, so are RELC’s, as discussed at the AGM. Electricity purchased from the Ellershouse Wind Farm is priced lower than electricity from Nova Scotia Power – which it displaces – so RELC customers benefit from these savings (though not enough to offset economies of scale between RELC and Nova Scotia Power). 

RELC’s major accounts payable are for purchase of power supply from Nova Scotia Power and AREA (Ellershouse Windfarm), and for services - operational, administrative and financial services needed for day-to-day operations - shared with the Town of Mahone Bay. When the current Commissioners became aware of significant outstanding balances owed to AREA and Mahone Bay, resulting in a large part from capital spending undertaken by RELC without financing leading to a cash shortfall, we reached out to these partners and requested they consider converting the outstanding debts to longer term loans; they are currently waiting on the borrowing resolution put forward at the AGM to be voted on at the July 23rd special meeting, to confirm RELC's ability to proceed in this direction (in the meantime, interest is being charged on the outstanding balances.

The RELC Board of Commissioners is seeking approval to obtain $1,000,000 of long-term financing, approximately $600,000 of which is required immediately in relation to prior and current year capital spending.  This initial amount will be repayable over 10 years at an interest rate of 6%, which translates into yearly principal and interest payment of approximately $78,000.  With regards to future capital purchases, it is anticipated that the Commission will be able to obtain external assistance to cover 50% of the expenditures.  The remaining $2,000,000 would need to be funded internally and RELC's legislative borrowing limit (of $1,000,000) would need to be increased to permit this. Based on the current situation further rate increases would be required to cover this amount, which could be paid back over as much as 30 years, depending on financing.  

Nova Scotia power also passes on capital costs to consumers, but these are spread out across a larger customer base. If capital requirements would push RELC customer rates further above Nova Scotia Power’s rates than can be justified by the benefits of local ownership, this would certainly support the case for an alternative structure or for pursuing the possible sale of RELC assets to Nova Scotia Power, and as such this is one of the primary motivations for the resolution put forward for a vote on July 23rd, concerning exploration of structural options.

Nova Scotia Power’s customer rate structure does have some differences from RELC's, including some customers being charged on a demand basis, but that being said, RELC Treasurer Merrill Zinck has assessed average Nova Scotia Power customer rates to be slightly lower than RELC’s today (~5%). While Nova Scotia Power rates are likely to increase in the future, so are RELC’s, as discussed at the AGM. Electricity purchased from the Ellershouse Wind Farm is priced lower than electricity from Nova Scotia Power – which it displaces – so RELC customers benefit from these savings (though not enough to offset economies of scale between RELC and Nova Scotia Power).

RELC has traditionally billed monthly but can consider switching to bi-monthly billing. We are currently transitioning our billing platform with theintention to re-introduce a portal for customer payments and will be in a position to consider the billing cycle when this transition is complete. We would not however anticipate substantial savings in switching to bi-monthly billing, though it may be preferable to some customers.

In fact, RELC is doing exactly that: at the June 24th AGM a resolution was introduced (to be voted on at the July 23rd special meeting) seeking the support of ratepayers to investigate scenarios for restructuring, which - presuming the resolution is approved - will result in a report containing the various information you've indicated would assist with consideration of these different scenarios, to be presented to a future special meeting.