Investing for resilient power services
Recent months have seen a tilt in policy discussions around the energy transition, notes Scott Balfour, President and CEO of energy company Emera: “There’s now more focus on the reliability and affordability aspects.”
Emera is investing in both goals, for the benefit of its 2.5 million utility customers in Canada, the U.S., and the Caribbean.1
Emera’s companies serve territories where extreme weather events are not unusual. Its Canadian base, home to Nova Scotia Power, is beset by winter storms, while Florida – served by Emera’s Tampa Electric and Peoples Gas – suffered extreme damage in the last hurricane season.
Emera’s is investing heavily in “storm hardening” to protect its services, says Balfour. Schemes include vegetation management to prevent trees hitting lines during high winds, and ‘self-healing’ circuitry that automatically redirects power from other regions if a service is cut.
“It can be as simple as replacing smaller pole infrastructure for sturdier poles, replacing wood poles for concrete or steel, and strengthening the transmission system,” Balfour says.
Going underground is another protective measure: over half of Tampa Electric’s power lines are now below the earth. “We’re undergrounding about 100 miles of distribution infrastructure every year,” Balfour adds.
AI and drone technology are also being used in combination, allowing more efficient inspection of transmission lines to detect repair requirements earlier.
“We’re undergrounding about 100 miles of distribution infrastructure every year.”
Scott Balfour, President and CEO, Emera
Balancing affordability and resource
Meanwhile, Emera is also harnessing tech to offer more affordable energy. The most advanced smart meters now being deployed in Nova Scotia and Tampa provide valuable detail, Balfour says.
“We get data every 15 minutes in terms of customer usage,” he says. “Through AI tools, there can be estimates as to usage within a customer’s home – how much is coming from the fridge, air conditioning, or heating. That helps customers to use their own energy a little more efficiently.”
With soaring demand from electrification of items such as transport and heating, and the growth of data centers, ensuring resource adequacy will be key.
“How we continue to make these investments – in more generation, in smarter and reliable grids – while balancing that against affordability continues to be a challenge for the industry, and one that we’re pretty focused on,” Balfour says.
Strategic shifts for investor appeal
Balfour, who took the top job in 2018, has recently overseen several notable shifts in strategy. Emera is in the process of selling New Mexico Gas Company, which it had owned for a decade, to Bernhard Capital for $1.25 billion.2 The transaction was designed to simplify Emera’s portfolio and focus on its highest-returning assets, he says.
The firm also became the first Nova Scotian company to list on the New York Stock Exchange – “a prideful moment,” according to Balfour, which brings it into line with the majority of its Canadian peers on the TSX 60. “It’s really about expanding our investor base,” he says.
Last year saw higher balance sheet ratings pressure, which Balfour says Emera has largely addressed. What hasn’t changed is the company’s focus on investing capital on its customers’ behalf.
“That customer invested capital is helping to drive earnings growth and cashflow growth, improve the balance sheet, and create the opportunity to continue to invest on behalf of customers,” he concludes.
Amid soaring electricity demand and the imperative for decarbonization, energy companies are also being expected to deliver reliable and affordable supplies. Emera has both goals in hand, according to Scott Balfour, CEO and President of the Canada-based utilities provider. In this episode of RBC Capital Markets’ Powering Sustainable Ideas podcast, he sets out Emera’s strategic vision and recent milestones on the path to sustainable growth.
