The Powering the Economy Act makes three material changes. It moves responsibility for meeting renewable electricity targets from electricity sellers to the Nova Scotia Independent Energy System Operator (IESO) and authorizes the Minister of Energy to set those targets by regulation or directive.
It permits the Minister to require public utilities to enter power‑purchase agreements for electricity from submerged land licence projects. And it adds two new statutes: an Offshore Renewable Energy Revenue Act that imposes levies on submerged‑land renewable projects and a Subsurface Energy Resource Extraction Act that replaces and expands the province's framework for petroleum, hydrogen, geothermal and permanent subsurface storage.
These changes matter because they shift regulatory power toward the Minister and the Crown, create an explicit provincial revenue stream tied to offshore renewables, and supply a single modern statute for subsurface activities (including carbon sequestration and natural hydrogen). The bill establishes concrete financial and compliance mechanics—levy formulas, reporting and audit requirements, criminal and administrative penalties, and broad regulation‑making authority—that will largely be implemented through regulations and ministerial directives.
At a Glance
What It Does
The Act requires IESO to meet renewable electricity targets set by regulation or ministerial directive and lets the Minister order public utilities to buy output from submerged‑land generation under awarded power‑purchase agreements. It enacts an Offshore Renewable Energy Revenue Act with a levy scheme and a Subsurface Energy Resource Extraction Act creating licensing, leasing, monitoring, closure and royalty frameworks for subsurface energy.
Who It Affects
Affected parties include the Nova Scotia Independent Energy System Operator, public utilities (including Nova Scotia Power), developers and bidders for submerged land licences, offshore renewable operators, and any commercial actors seeking subsurface rights for petroleum, natural hydrogen, geothermal or carbon sequestration.
Why It Matters
The government centralizes target-setting and buyer‑of‑last‑resort powers that materially affect project bankability and market structure, while creating a predictable provincial revenue mechanism for offshore renewables and a single, modern regulatory code for subsurface energy activities that replaces older petroleum statutes.
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What This Bill Actually Does
The Electricity Act amendments reassign the legal duty to comply with renewable electricity targets to the Nova Scotia Independent Energy System Operator (IESO) and give the Minister of Energy explicit authority to set targets by regulation or issue directives. That is a governance shift: IESO becomes the compliance locus, but the Minister can both design targets and compel reporting.
The bill also authorizes the Minister to require a public utility to sign power‑purchase contracts for the output of a submerged‑land electricity facility where the Minister has awarded a power‑purchase agreement under a call for applications—an explicit mechanism to create offtake certainty for offshore projects.
The Offshore Renewable Energy Revenue Act (Schedule A) prescribes a two‑stage levy regime tied to submerged land licences. During the first 10 years of commercial operations a per‑megawatt annual levy applies ($7,000 per MW as drafted, subject to regulatory variation).
After year 10 the levy is the greater of that per‑MW amount and a percentage of gross revenue (the percentage to be set in regulation). The Act allows payment in money or in kind, sets reporting and audit obligations, authorizes interest and penalties for default, and gives the Minister power to direct the Regulator to withhold further offshore interests or authorizations from licence‑holders in default.
The enforcement toolbox includes debt recovery as a Crown debt and criminal penalties for falsifying submissions.The Subsurface Energy Resource Extraction Act (Schedule B) replaces and broadens the former petroleum statutes to cover petroleum, natural hydrogen, geothermal heat, pore space for permanent storage (carbon sequestration), and related activities. It establishes a licensing/lease regime for exploration and production, authorizes carbon sequestration licences and long‑term sequestration leases with post‑closure stewardship and potential liability transfer to the Crown on prescribed conditions, and requires data submission, monitoring (including induced‑seismicity assessments where required), and confidentiality periods for submitted data.
The Act also creates administrative tools—vesting/expropriation orders, unitization and coordination powers, obligations to coordinate sequencing and pressure management, penalties for non‑compliance, and broad regulation‑making authority to fill procedural and technical detail.Transitional and consequential provisions are significant. The bill extends the deadline for transfer orders related to moving positions and assets from Nova Scotia Power to the IESO to May 1, 2028, clarifies that curtailment rules apply only to generation facilities that received PPAs on or after March 1, 2024 and that curtailment is calculated on an annual basis, and deems those curtailment clarifications retroactive to October 3, 2025.
The Subsurface Act expressly revokes earlier permits issued under former petroleum laws (subject to limited transitional rights and regulatory exemptions), creating immediate legal and commercial consequences for existing tenure holders. Most operational detail—levy percentages, appeal procedures, reporting formats, technical standards, and fees—will be supplied in regulations and ministerial directives.
The Five Things You Need to Know
The Offshore Renewable Energy Revenue Act imposes an annual levy of $7,000 per megawatt of nameplate capacity for the first 10 years of commercial operations and, after 10 years, an annual levy equal to the greater of $7,000 per MW and a percentage of gross revenue that regulations will prescribe (Schedule A, s.4).
The Minister may require a public utility to enter into a contract to purchase some or all of the output of a submerged‑land generation facility awarded a power‑purchase agreement under the Electricity Act (Part I, new s.25(4A)).
The Subsurface Energy Resource Extraction Act revokes permits, licences and leases issued under the former Petroleum Resources and Petroleum and Natural Gas Acts without compensation, but gives prior holders an exclusive short window to convert holdings to exploration or coal‑gas agreements under the new regime (Schedule B, s.42 transitional scheme).
The Minister can direct the Regulator to refuse to issue or to suspend authorizations under the Accord Act for any person in default of levy payments under the Offshore Act, and levies are recoverable as a Crown debt with interest and penalties (Schedule A, ss.6 and 10).
The Offshore Act and Subsurface Act create criminal and administrative sanctions: falsifying returns is an offence, the Offshore Act carries fines up to $1,000,000 and five years’ imprisonment on indictment (s.17), and the Subsurface Act provides summary penalties up to $100,000 and two years’ imprisonment for contraventions (Schedule B, s.37).
Section-by-Section Breakdown
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Minister sets renewable targets; IESO made legally responsible; Minister‑directed PPAs
The bill replaces Section 23 so IESO must comply with renewable electricity targets set in regulation or by Ministerial directive and imposes reporting obligations. Practically, IESO becomes the named duty‑holder for target compliance while the Minister retains the procedural levers to set target levels and reporting frameworks. Separately, the new subsection added to Section 25 authorizes the Minister to require a public utility to enter a contract to buy output from a submerged‑land electricity facility where the Minister has awarded a PPA—an explicit backstop that can reduce offtake risk for developers but transfers procurement exposure to the compelled utility.
Extend transfer window for NSPI transition to IESO
The Act pushes the deadline to make a transfer order moving positions, employees subject to collective agreements, bargaining units, assets and liabilities from Nova Scotia Power to the IESO from October 24, 2026 to May 1, 2028. That buys administrative time for organizational transition but prolongs the period of uncertainty for workforce and collective‑bargaining arrangements tied to the structural change.
Levy framework, collection powers, reporting and enforcement
Schedule A establishes payment obligations tied to submerged land licences: bid and issuance fees (regulation‑set), the per‑MW levies for years 0–10 and the revenue‑linked regime thereafter, plus rules for payment timing, possible payment in kind, and regulatory exemptions. The Minister can require consolidated reporting from multi‑interest licence holders and may direct the Regulator to withhold further offshore interests or authorizations for persistent non‑payment. Levies are Crown debts and recoverable in court; false filings trigger criminal liability; regulations will set appeal procedures, interest rates, audit powers and confidentiality windows.
Comprehensive subsurface licensing, carbon sequestration and monitoring regime
Schedule B creates a single statute covering petroleum, natural hydrogen, geothermal heat and pore space for permanent storage. It outlines exploration licences and production leases (terms, renewals, exclusivity), authorizes carbon sequestration licences and long‑term sequestration leases with post‑closure stewardship and potential Crown assumption of liability after prescribed closure requirements, and requires data submission, audits, induced‑seismicity hazard assessments where required, and monitoring. Ministerial powers include vesting/expropriation orders, coordination/unitization directions, and the ability to impose sequencing or pressure limits to protect correlative rights. Broad regulation‑making authority fills in technical standards and economic terms (rents, royalties, levies).
Curtailment clarifications, retroactivity and revocation of former petroleum permits
Section 4 clarifies curtailment rules apply only to generation facilities receiving PPAs on or after March 1, 2024 and that curtailment is calculated on an annual basis; Section 9 deems those clarifications effective as of October 3, 2025. The Subsurface Act revokes prior petroleum permits and leases issued under former statutes without compensation (subject to limited transitional conversion rights and possible regulatory exemptions), which immediately alters the legal status of many existing tenure holders unless regulations or exemptions are applied.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Province / Treasury — The Offshore Act creates a new and explicit revenue stream (per‑MW levies and revenue‑linked levies after 10 years) and regulatory levers to collect and enforce payments, improving fiscal capture from offshore renewables.
- Offshore renewable project developers — The Minister’s authority to require public utilities to sign PPAs and the clearer levy and tenure framework reduce market and procurement uncertainty, improving prospects for securing financing (though the levy is a net cost).
- Subsurface project proponents (geothermal, natural hydrogen, carbon sequestration) — They gain a single, predictable statutory pathway for licences, leases, unitization and post‑closure liability transfer that supports project development and third‑party access arrangements for sequestration.
Who Bears the Cost
- Holders of submerged land licences / offshore developers — They bear upfront bid and issuance fees, the annual per‑MW levy and later revenue‑linked levies, plus reporting, audit and potential penalties for non‑compliance.
- Public utilities compelled to buy output — Where the Minister requires a public utility to enter a PPA for submerged‑land output, the utility assumes offtake responsibility that may affect rates or require regulatory recovery mechanisms.
- Existing tenure holders under former petroleum laws — The transitional revocation provision can extinguish older permits without compensation unless specifically exempted or converted, creating legal and commercial exposure for incumbents.
- Landowners and surface occupiers — The Act allows vesting/expropriation mechanisms and ministerial orders for entry where consent cannot be obtained, increasing the risk of compulsory access and administrative expropriation processes.
Key Issues
The Core Tension
The central dilemma is between rapid, centrally directed deployment and revenue capture (Ministerial directives, PPAs, levies and enforcement powers) versus investor certainty, property rights and transparent, predictable rule‑making (detailed regulations, compensation for revoked rights, and stable offtake mechanisms)—the bill solves for agility and fiscal capture but leaves policymaking and legal risk to be resolved in subordinate regulations.
The bill delegates heavy implementation detail to regulations and ministerial directives. The levy percentages, appeal procedures, confidentiality windows, audits and many operational definitions are all left to subordinate instruments; those regulatory choices will determine how burdens are allocated among licence interest‑holders, operators and the Crown.
The Minister’s power to require public utilities to enter PPAs and to issue directives to IESO centralizes market shaping authority in political office, which can accelerate projects but will raise questions about procurement transparency and rate‑making treatment for compelled purchases. The ability to withhold future interests via the Regulator for levy default is a strong enforcement tool, but its exercise intersects with federal Accord mechanisms and could complicate investor recourse.
Transitional revocations of prior permits without compensation are particularly consequential. On one hand, the government clears legal and administrative clutter by bringing all subsurface rights under a modern code; on the other hand, immediate revocation risks legal challenges and investment chill for holders who expected continued tenure.
The Act provides conversion windows and regulation‑driven exemptions, making the regulatory phase critical. Finally, the statutes create multiple overlapping confidentiality and disclosure regimes (data protection vs. public safety and environmental disclosure), and the post‑closure stewardship and liability‑transfer mechanisms for sequestration hinge on technical standards and trust in long‑term monitoring and funding frameworks that are not yet specified.
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