The tolling agreement guarantees the operator's profit and passes all fuel, carbon, and interconnection cost risk to ratepayers — with confidential pricing that may never be published.
The proposed gas plants are not being built by a public utility. They are being built and operated by a private company under a tolling agreement - a contract where IESO Nova Scotia (acting for ratepayers) pays a fixed monthly fee for the right to dispatch the plants, plus all variable costs when they run.
The monthly payment has five components:
On top of these recurring payments, ratepayers also absorb:
The Fixed Capacity Payment is partially indexed to inflation: 20% is adjusted annually by the Consumer Price Index, with the remaining 80% fixed. The contract runs for 20 years from the Commercial Operation Date, but IESO can unilaterally extend it to the 26th anniversary (Section 9.1(b)), and can request a further extension to the 27th anniversary that applies automatically unless the generator objects within 10 business days.
With a target COD of 2029, the initial contract runs to 2049. With extensions, it runs to 2055–2056. The lease contains four 5-year automatic renewals beyond the initial 20-year term, potentially extending to 2069.
All pricing in the draft Tolling Agreement is redacted. IESO Nova Scotia has not published any estimate of the total cost to ratepayers. The following estimate is derived from typical North American capacity pricing for new-build gas peaker plants.
For a single 300 MW plant, if the Fixed Capacity Price falls in the range of $15,000–$25,000/MW-month (typical for new gas peakers in North America), the fixed capacity cost alone is $4.5–$7.5 million per month. For two plants, that is $9–$15 million per month, or $108–$180 million per year - before a single megawatt-hour is generated. Over 25 years, that totals $2.7–$4.5 billion in capacity payments alone. All fuel costs, carbon costs, and variable O&M are additional.
The tolling agreement is structured so that essentially all financial risk falls on ratepayers, while the operator's profit is guaranteed.
The Fixed Capacity Payment covers the generator's capital recovery, return on equity, and fixed operating costs. It is paid monthly regardless of dispatch. The generator receives the same capacity payment if the plant runs 0 hours or 8,760 hours in a year. The minimum availability threshold before triggering a default is only 70% (12-month rolling average).
| Risk | Who bears it | Source |
|---|---|---|
| Fuel price increases | 100% ratepayers - full pass-through | Tolling Agreement, s. 7.6 |
| Carbon price increases | Ratepayers - carbon costs included in fuel pass-through | Tolling Agreement, s. 7.6 |
| Electrical interconnection overruns | Ratepayers - actual vs. estimated difference passed through at $35/MW-month | Tolling Agreement, s. 7.7 |
| Gas interconnection costs | Ratepayers - passed through via GIC Adder | Tolling Agreement, s. 7.5 |
| Increased dispatch (mission creep) | Ratepayers - no cap on operating hours; all additional fuel/carbon costs pass through | Tolling Agreement (no dispatch cap provision) |
| Plant underperformance | Shared - operator faces Non-Performance Charge, but 70% availability threshold is low | Tolling Agreement, s. 7.3 |
The operator has no incentive to minimize fuel consumption, because ratepayers pay all fuel costs. The operator has no exposure to gas price volatility. If natural gas prices spike - as they did across North America in 2022 - ratepayers absorb the increase in full. As Canada's carbon price reaches $170/tonne by 2030, every hour of operation becomes more expensive, and that cost is passed through.
There is no domestic-use-only clause and no export prohibition in the draft Tolling Agreement. The only assurance that dispatched power will serve Nova Scotia load is verbal. This is the same structural gap that the Conservation Council of New Brunswick flagged in the Tantramar contract.
Nova Scotia ratepayers are being asked to pay $3–5 billion over 25 years for capacity that could, under the contract as written, be dispatched to serve interprovincial or export demand. IESO Nova Scotia has exclusive dispatch authority (the "must-offer" structure means all available capacity must be offered when called), but nothing in the tolling agreement restricts where the power goes once it is generated and enters the grid.
This matters because Nova Scotia is connected to New Brunswick via the Maritime Link and New England via the Maritimes intertie. Power dispatched from these plants can flow across those connections. If it does, Nova Scotia ratepayers bear the fuel and carbon costs of generating power consumed elsewhere.
Across the border in New Brunswick, NB Power is pursuing a remarkably similar project: a 500 MW gas and diesel plant at Centre Village in the Tantramar region, built by Missouri-based ProEnergy. The Tantramar project is further along and offers a preview of what Pictou County can expect - including the same cost secrecy problems.
| Feature | Tantramar (NB) | Marshdale / Salt Springs (NS) |
|---|---|---|
| Capacity | 500 MW (10 turbines) | 2 x 300 MW (up to 600 MW) |
| Contract type | Power purchase agreement | Tolling agreement |
| Contract term | 25 years | 20–27 years |
| Builder/operator | ProEnergy / Rigs Energy Atlantic (Missouri, USA) | To be determined by RFP |
| Construction cost | Over $1 billion (confirmed at EUB hearing) | Unknown (all pricing confidential) |
| 25-year total cost | Undisclosed (VP refused to give "ballpark" figure) | Undisclosed (classified as Mutually Confidential Information) |
| Rate impact | ~5% in first full year | Unknown |
| Regulatory review | NB EUB multi-day hearing with interveners | No regulatory review of procurement |
| Export restriction | None identified (flagged by CCNB) | None |
At the NB Energy and Utilities Board hearing in February 2026, NB Power's vice-president refused to provide even a ballpark figure for the 25-year cost. Professor Andrew Secord challenged this directly: "Is it going to cost them $100 million, $50 million, $500 million, $2 billion, $6 billion? What are we talking about here?"
The 25-year agreement with ProEnergy contains confidential filings accessible only to parties who signed confidentiality agreements. Nova Scotia's procurement has the same structure - but without the hearing where the question can at least be asked under oath.
IESO Nova Scotia has signed a preliminary deal to purchase 100 MW from the Tantramar plant over 10 years. IESO president Johnny Johnston declined to disclose financial terms. NB Power has stated that the NS deal would reduce the effective price to NB ratepayers through fixed cost sharing - meaning Nova Scotia ratepayers are effectively subsidizing New Brunswick's gas plant costs while also paying for the Marshdale and Salt Springs plants.
New Brunswick is building a similar gas plant at Tantramar using the same class of technology (ProEnergy PE6000 refurbished aeroderivatives) under a similar tolling agreement. The NB Energy and Utilities Board held multi-day evidentiary hearings (February 9–13, 2026) with public interveners — the Conservation Council of New Brunswick, a university professor, the NB Lung Association, and others — examining the contract terms under oath before the project could proceed.
Nova Scotia's Energy Board will review IESO's cost recovery application under Section 30 of the More Access to Energy Act. The scope of that review — and whether it will include the kind of pre-commitment prudency scrutiny that New Brunswick's EUB conducted — has not yet been tested. The MAEA is new, the Energy Board is new, and no energy resource supply contract has gone through this process yet.
Nova Scotia's approach to pricing transparency is an outlier among Canadian electricity procurements.
In June 2025, Ontario's IESO published individual contract prices for all 13 winners of its Long-Term 1 (LT1) procurement. The public can see exactly what each facility will cost ratepayers per megawatt, compare bids, and evaluate whether the procurement delivered value. This is the standard in Ontario for all major electricity procurements.
NB Power's Tantramar contract prices are confidential, but the NB EUB process means that interveners with signed confidentiality agreements can access pricing, and NB Power executives can be questioned about costs under oath at public hearings. The EUB has the authority to reject the contract if it finds the costs imprudent.
Article 8 (Confidentiality) of the draft Tolling Agreement classifies all pricing as "Mutually Confidential Information." The agreement itself can be published, but the pricing exhibits (Exhibit B) cannot. IESO Nova Scotia has stated it "may choose to publish" pricing after the contract is awarded - a discretionary commitment, not a binding obligation.
The confidentiality provisions in Article 8 of the Tolling Agreement survive termination of the contract. Even after the agreement ends, the pricing terms remain classified. Injunctive relief is available to the parties without the need to prove damages (Section 8.4).
The two sites have different land arrangements, both detailed in Section 13.3 of the Tolling Agreement:
The Marshdale land is owned by IESO. During construction, the generator leases it for $1.00 per year (Lease footnote 3). Within 30 days of Commercial Operation Date, IESO is required to transfer freehold title to all IESO Owned Lands to the generator for $1.00 (Section 13.3(b)). The generator takes title subject to existing encumbrances but free of any IESO mortgages. Upon conveyance, the lease terminates. Public land, acquired by a Crown corporation using public funds, permanently conveyed to a private company for one dollar.
The Salt Springs land is not owned by IESO. It is held under an existing head lease (the Coady lease). Within 30 days of COD, IESO assigns the Coady lease to the generator, who assumes all of IESO's rights and obligations under it. This is a lease assignment, not a freehold transfer — the generator becomes the lessee, not the owner.
Nova Scotia ratepayers are being asked to commit $3–5 billion over 25 years to pay a private company for two fossil fuel plants. Under the contract as drafted:
New Brunswick, facing the same decision with a similar project, held a regulatory hearing where costs were challenged under oath before the contract was signed. Ontario publishes every contract price. Nova Scotia "may choose to."