Utility board rules N.S. Power was 'imprudent' in not inspecting rusty pipe that caused oil spill

Nova Scotia Power is on the hook for costs associated with an oil spill at its Tufts Cove power plant on the Dartmouth waterfront in 2018.

That's in addition to a fine of $175,000 that was levied by a Nova Scotia provincial court against the corporation after it pleaded guilty to a single violation under the Fisheries Act.

About 24,000 litres of heavy fuel oil was released into Halifax Harbour on Aug. 2, 2018. The corporation blamed a corroded pipe for the spill.

But in a decision released Wednesday, the Nova Scotia Utility and Review Board (UARB) found Nova Scotia Power failed to properly inspect the pipe before the leak.

The utility "did not remove the insulation around it to check for corrosion," the UARB wrote in its decision.

"N.S. Power made this decision despite being aware that the stub pipe would not have been inspected for a long time, and knowing that corrosion in other parts of its heavy fuel oil (HFO) piping system caused it to expand the scope of an ongoing capital project to include the removal of all pipe insulation to allow for a comprehensive pipe inspection."

$2 million in penalties

The UARB finding was part of a broader decision on costs the utility was claiming as part of its Fuel Adjustment Mechanism (FAM) which ensures customers pay the true cost of fuel used to produce electricity, not an estimate.

The board said Nova Scotia Power was "imprudent" and disallowed $157,921 in additional cost and another $1.8 million that would, the board said, have been returned to customers as excess earnings if not for the expenses related to the spill.

The board estimates that the total cost to the utility will be in the neighborhood of $2 million, plus interest. However, the board said to put that in context, Nova Scotia's total FAM costs for the period covered in this audit is $1.5 billion.

In a statement, a spokesperson for Nova Scotia Power said they are reviewing the UARB decision. "We operate facilities across the province and take our responsibility to protect the environment very seriously," Jacqueline Foster wrote. 

"We have taken steps to reduce the risk of incidents moving forward by implementing a risk-based inspection program which meets recommended standards related to inspections and maintenance of infrastructure carrying fuel."