For 75 years, Trenton, N.S., has hosted a coal-fired generating station, but the plant must switch to another fuel by 2030 or shut down. About a third of the town's revenues come from the plant, and the mayor says that means Trenton has an uncertain future.
Trenton Mayor Alec Dove says the town needs answers to plan for the future.
The power plant shuts down, the utility stops paying into the town’s coffers and either taxes surge or the town disincorporates.
That’s the worst-case scenario, according to Trenton Mayor Alec Dove, come 2030 when Nova Scotia reaches a statutory deadline to stop burning coal for electricity.
“It weighs heavily on me,” Dove said in an interview.
For 75 years, Trenton has been home to a coal-fired generating station, which staffs about 90 people and contributes a large portion of the town’s revenues. In lieu of property taxes, Trenton receives an annual payment, which this year was more than $1.6 million, accounting for 28 per cent of total revenues.
“It is not easy for a town of this size to recoup that kind of money,” said Dove.
Property taxes would have to rise by 50 per cent to make up for a total loss of the grant in lieu, he said.
Trenton Mayor Alec Dove says the worst-case scenario for the town is a total loss of the grant it receives in lieu of property taxes for hosting the power plant. The annual payment accounts for nearly a third of Trenton's total revenue.
Nearly five years ago, the province set in law a 2030 deadline for weaning off coal, but the details of how it will play out in Trenton, population 2,400, are still unclear.
Dove said he’s spoken to officials with the electric utility, the electricity system operator and the province and his takeaway is that the town is “going to lose something.” Whatever that is, he said he needs to know soon so the town can prepare.
A possible conversion
Nova Scotia Power is considering switching Trenton to different fuels, primarily biomass. A spokesperson said the utility has done a preliminary assessment of a conversion, similar to what NB Power is pursuing at its Belledune facility, but it won’t make a decision before the grid operator completes the next integrated resource plan (IRP) — a long-range planning document for the power grid.
Public documents related to that planning work show that if a conversion proceeds, it would only be applied to one of the two coal units, cutting its generating capacity in half.
Dove said he’s asked officials whether that would mean the grant in lieu is also cut in half, but in response has heard only “crickets.”
Energy Minister Marco MacLeod said he shares the mayor’s anxiety. His riding of Pictou West is adjacent to the Pictou Centre riding, which includes Trenton.
“That's very close to my community as well, and there's folks from my community that work there,” he said in an interview.
Nova Scotia Energy Minister Marco MacLeod says he shares in the mayor's anxiety about Trenton's future, but he cannot yet say what will happen to the coal plant or the grant money the town receives.
But when it comes to the future of the power plant, MacLeod said, “the answer is we just don't know yet.” Plans will start “firming up” at the end of this year when the IRP is expected to be complete, he added.
Even then, the answer to Trenton’s future is not entirely based on whether the plant is generating electricity.
Property value
The grant in lieu program works like this: Instead of paying municipal taxes on its assets, Nova Scotia Power pays a lump sum to the provincial government and the province redistributes the money to municipalities. This year about $24.5 million was redistributed. The amount rises annually with inflation.
According to the Municipal Affairs Department, the municipal affairs minister chooses the redistribution method, in consultation with the Nova Scotia Federation of Municipalities.
Currently, the calculation for apportioning the money is based on what share of Nova Scotia Power assets a municipality hosts, the department said.
Trenton split on town's future as coal plant set to close
Its planned 2030 shutdown will lower emissions but slash local revenue, forcing town leaders to seek new income. The CBC's Taryn Grant reports.
The responsibility for valuing properties belongs to the Property Valuation Services Corporation. In a statement, PVSC said there is “no fixed relationship” between a power plant’s electricity output or capacity and its value.
But, it continued, “Because future operational decisions regarding any facility are unknown, PVSC cannot speculate on how potential changes to operations may affect future assessments.
“Any future assessment would depend on the characteristics, market conditions, and circumstances of the property as they exist on the applicable valuation dates.”
Dove said he cannot see the assessed value remaining the same if the plant isn’t pumping out electricity.
If it isn’t a power plant, “It’s just a piece of steel … a hunk of junk,” he said.
Lessons from Annapolis Royal
Annapolis Royal faced a similar conundrum when Nova Scotia Power stopped using a tidal turbine in the town in 2019.
“Every year since, we've been waiting for the other shoe to drop,” said Mayor Amery Boyer.
The town has continued to receive its grant in lieu, but Boyer said she expects payments to come to an end in the next couple of years with the formal decommissioning of the plant.
In the meantime, the town has been gradually adjusting its finances by divesting surplus lands, focusing on population growth and tapping into more outside funding — such as project grants from other government levels — rather than using tax money, she said.
Boyer said in recent years the town has lessened its dependence on the grant from more than 15 per cent of total revenues to less than 12.5 per cent.
She said the overall lesson has been to diversify.
“If you're a one-horse town, you're going to be at risk."
Dove said Trenton is developing a 10-year plan that will include strategies for diversifying revenue streams.
Differing opinions
Not everyone in Trenton shares the mayor's concerns about the future of the coal plant, including one of his town hall colleagues.
Coun. Scott Cameron said he doesn't expect the province to meet the 2030 coal deadline — though the energy minister says the province is on track — but even if it does, he fully expects the plant to continue operating using different fuels.
"I disagree with the mayor when he said that the town's going to die," Cameron said.
He noted Trenton has survived the loss of industry before, including a railcar plant that shuttered in 2007.
"Well, that's been closed for a few years now. We're still here," he said.
But Cameron does agree Trenton needs to look for different ways to bring in money. He said he sees opportunity to increase the town's population and therefore its tax base.
"What this town needs is more residential dwellings. There's land in Trenton and we have to start focusing on that,"
