A new piece of legislation was introduced to the Nova Scotia Legislature on September 9, 2026, which could significantly alter Nova Scotia Power's earnings model through a newly proposed Performance-Based Regulation (PBR) model. This bill, referred to as Bill 263, is set to revolutionize the financial framework governing Nova Scotia Power by tying a portion of its earnings to the reliability and effectiveness of the utility service it provides.

The Performance-Based Regulation model emphasizes the connection between a utility's earnings and its performance on several critical factors, including reliability, customer service, operational efficiency, affordability, and advancements in clean energy transition. According to the PBR framework, utility providers may encounter financial consequences if they do not meet established performance targets, while also being incentivized with additional rewards for surpassing these targets.

Historically, Nova Scotia has utilized a cost-of-service model, where utility providers earned revenue based predominantly on their operating costs, with the expectation of a profit margin relative to those costs. This transition to a Performance-Based model reflects a shift towards aligning utility earnings with the quality and reliability of services provided, a practice already adopted in various jurisdictions worldwide, such as Ontario, Alberta, New York, the United Kingdom, and New Zealand.

Nova Scotia's Premier and Minister of Energy, Tim Houston, articulated that the changes stem from widespread concerns among residents about the lack of value for money they perceive in their electricity costs. He noted, “Many Nova Scotians are feeling the pressure of higher electricity costs, but don’t feel they’re getting good value for what they pay.” This statement underscores the province's commitment to modernizing the electricity system while ensuring accountability and better service for Nova Scotians and their communities.

Review Process

The Nova Scotia Energy Board is responsible for evaluating the proposed PBR model through a thorough 30-day review process. Key factors that the board will consider during this evaluation include:

• Protection of ratepayers and maintenance of reasonable electricity rates.
• Performance measures related to sustainable development, energy efficiency, and emissions reductions.
• Performance measures concerning efficiency, cost-effectiveness, safety, reliability, resilience, innovation, and overall customer satisfaction.
• The impact of the new model on different categories of electricity customers.
• Assessment of Nova Scotia Power’s ability to earn a fair rate of return and how the new earnings model would affect capital spending, cost recovery, and associated risks.

Following the board's review, recommendations will be made to the provincial government, which will then analyze the findings and decide on subsequent steps for the legislation. Importantly, the new PBR model will not alter the established policy that allows utility providers to pass fuel costs directly to ratepayers, ensuring that consumers remain informed about how utility expenses are handled.

For further information regarding the Performance-Based Regulation model, a detailed fact sheet is available for public access. This legislative initiative serves not only as a potential framework for enhancing service delivery but also as part of a broader strategy aimed at fostering a more sustainable and efficient energy landscape in Nova Scotia.