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Executives

Jill Hennigar - Manager of Investor Relations

Chris Huskilson - President and CEO

Scott Balfour - EVP and CFO

Bob Hanf - President and CEO, Nova Scotia Power Inc.

Judy Steele - President and COO, Emera Energy Inc.

Gerry Chasse - President and COO, Bangor Hydro Electric Company and Maine Public Service Company

Analysts

Juan Plessis - Canaccord Genuity

Paul Lechem - CIBC

Ben Pham - BMO Capital Markets

Jeremy Rosenfeld - Desjardins

Robert Kwan - RBC Capital Markets

Linda Ezergailis - TD Securities

Matthew Akman - Scotia Bank

Andrew Kuske - Credit Suisse

Emera Incorporated (OTCPK:EMRAF) Q3 2013 Earnings Conference Call November 8, 2013 3:00 PM ET

Operator

Good afternoon ladies and gentlemen and welcome to the Emera Third Quarter Conference Call.

I would now like to turn your meeting over to Ms. Jill Hennigar, Manager of Investor Relations. Please go ahead, Ms. Hennigar.

Jill Hennigar

Thank you. Good morning everyone and thank you for joining us for our third quarter conference call this afternoon. Joining me from Emera are Chris Huskilson, President and Chief Executive Officer; Scott Balfour, EVP and Chief Financial Officer; and other members of the management team.

Emera’s third quarter earnings release was distributed earlier today via Newswire and the financial statements and management’s discussions and analysis are available on our website at emera.com. This afternoon, Chris will begin with a corporate update and then Scott will review the financial results in detail. We expect the presentation segment to last about 10 minutes, after which we will be happy to take questions from analysts and investors.

Please note that all amounts are in Canadian dollars with the exception of Emera’s Maine and Caribbean utilities where segment results are reported in U.S. dollars.

I will take a moment to remind you that this conference call may contain forward-looking information which involves certain assumptions and known and unknown risks and uncertainties that may cause actual results to be materially different from those that are expressed or implied by the comments. Those risks include but are not limited to weather, commodity prices, interest rates, foreign exchange, regulatory requirements, and general economic conditions.

In addition, please note that this conference is being widely disseminated via live webcast.

And now I will turn things over to Chris.

Chris Huskilson

Thank you, Jill and good afternoon everyone. Emera delivered Q3 adjusted net income of $38.4 million or $0.29 per share compared to $43.8 million or $0.35 per share in Q3 of 2012. Year-to-date adjusted net income of $196.4 million or $1.48 compared to $171.9 million or $1.38per share for the same period in 2012. Scott will take you through the details of the quarter later in his remarks.

Beginning with our most recent development on the Maritime Link on October 21st we filed our compliance filing on market priced energy with Nova Scotia utility and review board. We believe this filing address the board’s market priced energy condition through an energy access agreement between Emera, [Novacor] and Nova Scotia Power. The agreement contains the terms and conditions of a commercial arrangement, that will allow NSCI to obtain excess to market priced energy might economically beneficial for our customers.

The agreement provided excess to market priced energy that Novacor has available for export up to 1.8 terawatt hours in each of the years of the agreement which extends to 2041 and for average annual amount of 1.2 terawatt hour per year over the term. The Board is scheduled three days of hearings for November 14th, 15th and 18th to review the agreement and submitted evidence from our company and interveners. Both the filing and the hearing are critical steps for the project as we move towards completing the milestones required to begin construction.

In August Emera entered into a agreement to purchase three combined cycle gas plants in new England. Transaction will add 1050 megawatts to Emera’s generation capacity in the northeast and presents to total investment of $541 million. The facilities, all of which are recent vintage on Bridgeport, Connecticut, Tiverton, Rhode Island and Rumford, Maine. While of these assets will be modestly accretive in the early years, we believe that deliver main for values over the long term. Staying with developments in New England both Massachusetts and some Connecticut recently issued request for proposals for contract of renewals. Over the 565 megawatts of new contracts awarded in Massachusetts, First Wind was successful in capturing more than 50% of the contracts, which still have to be approved by the Massachusetts Department of Public Utilities.

The clean energy will come from the 147 megawatt Oakfield Wind project in Aroostook County Maine and the 186 megawatt Binghamton Wind project in Somerset County Maine. The Northeast wind joint venture which represents our 49% interest in First Wind’s Northeast asset has undertaken a refinancing of its various project and corporate debt facilities into one single facility which will simplify and reduce costs of the JV's overall lending structure. This refinancing will facilitate the repayment of Emera's $150 million loan to the Northeast wind joint venture. We expect the transaction to close early next week.

At Nova Scotia Power, the focus has been on implementing productivity initiatives and cost controlled measures. Although already one of the most efficiently run utilities in Canada, we continue to look at various ways to find cost savings. We are benchmarking different business units with industry peer, looking at potential for contracting of some function, reorganizing several teams to gain efficiencies and have eliminated 80 positions so far this year, mostly to retreation. These are just some of the things we are doing in an effort to reduce the need for rate increases in the future for our customers.

In the Caribbean, we remained focused on finding less price volatile energy sources for our customers and we have proposed a project that would see us moving CNG from the port of Westmount beach in Florida to Grand Bahama. Frontend engineering and design studies are 90% complete and we expect to file the natural gas export application with the U.S. Department of Energy before the end of the year, after which we expect to be in a position to make a final investment decision.

As well, earlier today we announced an upcoming change to our Board of Directors. Our current Chair John McLennan will step down on May 7, 2014, immediately following our Annual General Meeting. And subject to shareholder election, Jackie Sheppard, will assume the role of Chair on the same day. Jackie has been an Emera Directors since 2009 and her extensive knowledge in the energy industry and experience in the corporate executive and corporate director has proven valuable to the Emera Board. John has and continues to provide leadership and counsel to both myself and our management team and has led the Board through a period of significant growth. John will remain on the Board and we look forward to working with both John and Jackie as we make this transition.

Overall, it’s been a good quarter and we're pleased with the progress we've made so far this year. In light of our progress and strong results in October, the Board of Directors approved an increase in the quarterly common share dividend for an annualized rate movement from $1.40 per year to $1.45 per year. This increase reflects the Board’s confidence in our future earnings prospects and the continuing success of our strategy.

With that I'll turn things over to Scott who will give you a more detailed update on our financial quarter results.

Scott Balfour

Thank you Chris and good afternoon everyone. Our third quarter results were released earlier this morning and are now on the Emera website. Emera’s consolidated net income for the third quarter of 2013 was $28.8 million or $0.22 per share compared to $44.7 million or $0.36 in the third quarter of 2012.

As Chris mentioned earlier, when the Q3 results are normalized from mark-to-market gains and losses 2013 adjusted net income was $38.4 million or $0.29 per share compared to $43.8 million or $0.35 per share last year.

Impacting the results this quarter is the $33.9 million loss from discontinued operations that Algonquin Power recorded in their second quarter of this year. The majority of Algonquin’s loss was due to a write-down of its energy from waste facility that was deemed to no longer strategic to its business.

Emera owns 24.4% of Algonquin and accounts for its equity earnings a quarter in arrears to the quarter Algonquin report such earnings. This resulted in a Emera recognizing an after-tax loss of $7 million or $0.05 per share in the third quarter in respect to this loss from discontinued operations by Algonquin.

Also to note, adjusted net income for the third quarter of last year included $2.7 million or $0.02 per share of after-tax gains from the conversion of Algonquin’s subscription receipts into Algonquin common shares. There were no similar gains recognized in the third quarter this year.

Nova Scotia Power contributed $14.4 million to consolidated net income in the third quarter of 2013 compared to $22.6 million in the third quarter last year. The decrease was primarily due to the impacts on AFUDC allowance for funds used during construction and tax expense from a reduced capital spending program this year. And the comparative impact of the reversal of a $5 million receivable allowance in 2012.

NSPI’s rate base and earnings for the full year are expected to remain consistent with those of 2012 and NSPI anticipates earning within its allowed ROE range.

Maine utility operations contributed $9.2 million to consolidated net income in the third quarter of this year compared to $11 million for the same period last year. The lower net income is primarily due to the impact of the expect FERC transmission rate refund for the period from October 2011 to December 2012 as a result of expected rate of return on equity rate reductions for New England transmission owners for which Bangor Hydro -- $1.5 million after-tax provision in the quarter. This provision reflects the impact if the recommendation of the administrative law judge in regards to retroactive refund period is fully adopted by the FERC. The FERC has not yet announced the decision on this rate review for either the retroactive or prospective period.

Caribbean utility operations contributed $11.4 million to consolidated net income in the third quarter of 2013 compared to $7.2 million the same quarter last year. The higher net income was primarily due to operational cost savings in Grand Bahama Power Company and a $1.7 million increase in other income due to the recognition of a regulatory asset in GBPC.

Pipelines contribution $8.2 million in the third quarter this year compared to $6.8 million last year. This increase is due reduced interest expenses. Excluding the effect of mark-to-market adjustments Emera’s services renewables and other investments contributed $2.3 million to consolidated net income in the third quarter of 2013 compared to $7.3 million in the third quarter of 2012. The decrease is primarily due to the $7 million after-tax impact of Algonquin’s loss from discontinued operations as previously mentioned, as well as the comparative impact of the $2.7 million after-tax gains recognized in the third quarter of last year on the conversion of Algonquin’s sub receipts into Algonquin common shares. These affects were partially offset by improved earnings, Emera’s equity earnings in Algonquin excluding the impact of the discontinued operations and as well as from the various Bear Swamp.

That’s all from my financial overview and we will now be happy to take your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from line of Juan Plessis from Canaccord Genuity. Your line is open.

Juan Plessis - Canaccord Genuity

Thank you. You have lowered your 2013 CapEx at NSPI and Maine is that a timing issue that shifts CapEx into 2014 or is that a reduction in planned capital projects?

Chris Huskilson

About half year for Nova Scotia Power, so it’s not a shift, it is part of our program to look at cost throughout the company. And so it’s not a shift in that sense, does that answer to your question?

Gerry Chasse

And this is Gerry Chasse, President of the Maine utility. I would just say that similar to our past history some of the projects that we have done have been large and lumpy. So to a large extent it depends, it is depending on the timing for those projects as to the level of capital in anyone year.

Juan Plessis - Canaccord Genuity

Okay, great. Thank you for that. And just wondering if you could update us on your 2013 capital spending program, you have spent $252 million in total in the first nine months of the year. What do you are planning to spend for the full year? And also why we're on the topic of CapEx and perhaps you can tell us what you’re capital requirements for 2014?

Scott Balfour

So it's Scott, Juan. So I think the best place to guide you in terms of our CapEx requirements would be the Investor Relations slide deck that shows not just a profile for 2014, but beyond that as well. As it relates to 2013 of course the largest component of the balance of your capital spending will be the closing of the purchase of three gas plants in New England, as well as the completion of the capital programs for both Nova Scotia Power and Bangor Hydro, which are also are re-announced, in fact that lower capital program that Bob referred to for Nova Scotia Power is consistent with the plan that we've announced earlier this year. So they are generally on track with that. But for the balance of 2013 really the big component of it is the purchase of the three gas plants in New England.

Juan Plessis - Canaccord Genuity

Okay. Thank you, Scott. Moving on to the Caribbean, what is the proposed legislation in Barbados with respect to the addition of renewable generation and what's about meaningful potential investments for Emera?

Chris Huskilson

Hey John, it's Chris. Just it's really just a re-look at the market there. There is a large strong objective to get some more renewables into the market and to introduce things like some of the pilot programs we've had where we've had net metering and other things on the books already. And so what we're going to end up seeing as was consistent with our strategy, you're going to see a lot more renewable investment occurring in that marketplace. So it really is focused in that area. And we've been working with the Department of Energy and also stakeholders in that market to move that all forward. So we're expecting to see some legislation introduced either this fall or early in the winter. And that will actually implement that approach.

Juan Plessis - Canaccord Genuity

Okay. Thanks Chris. And do you expect any impact from the new 25 year license that was issued at Dominica Electric?

Chris Huskilson

No, I think that was an expected outcome. As we were entering that market one of the things we were doing was spending time with the government. And as you know in that particular situation there are large shareholders of the entity as well. But with the matter of spending time with the government again they were interested in how we might develop and implement renewables in that marketplace. And so there is work going on around geothermal and other initiatives there. So I think that that’s our business as usual in that location.

Juan Plessis - Canaccord Genuity

Okay, great. Thank you very much.

Chris Huskilson

Hey well thanks Juan.

Operator

Your next question comes from line of Paul Lechem from CIBC. Your line is open.

Paul Lechem - CIBC

Hey thanks. Good afternoon.

Chris Huskilson

Hey Paul.

Paul Lechem - CIBC

Just going back on the CapEx question for a second I was just wondering what’s a good pace level of sustaining CapEx for NSPI and the Maine utilities?

Bob Hanf

It’s Bob Hanf for Nova Scotia Power. The answer is about $175 million a year.

Chris Huskilson

For the Maine utilities we would expect about $26 million to $27 million per year for base level of capital.

Paul Lechem - CIBC

So for NSPI the $200 million you’re now expecting to spend this year is just a little bit more than the sustaining level of CapEx. So I was just wondering what kind of programs got pushed out from this year that you are hoping to originally hoping to include in the year, what kind of thing to do referring?

Scott Balfour

We had a very careful review of all of our standing and ensuring that we didn’t violate our safety standard or reliability standard and that we found projects that we could move into the next year without impairing those first two tests and so that's sort of the nature of those decisions and so we’re quite comfortable that we’re going to meet our reliability and our safety standards.

Chris Huskilson

And I think Paul, it’s Chris. The other thing that's changing in the market is as we look at the potential of having maritime link come into the marketplace, it does change how we look at where the generation is going to come from in the future. And so the amount of investments that needs to happen across the fleet and the way our renewals will get integrated changes better, I think that's going to reflect in the future.

The other thing that also should be noted is that Nova Scotia Power has had great reliability result in the last couple of years. In fact, I think last year was the best reliability in 40 years. And so we've been investing in reliability over the period. We believe that we’re in pretty good shape now and so that changes the program as well.

So all of these things get assessed over time and those assessments actually turn into action in a future year.

Paul Lechem - CIBC

With this FERC decision out there, I guess it was recommendation out there, just wondering, does this change your view of investments in made on the transmission side and not just what you have with bank right now but with the Northeast Energy Link down the road, is this changed, if returns on transmission are lower, that change your outlook for building (inaudible)?

Chris Huskilson

I jump into that one. So Paul, I think at the end of the day, the question is whether we are going to get a fair return in the marketplace, it’s too early to tell exactly where the FERC is going to come out on that, but we believe it’s been a fair process. And so we are looking forward to an outcome. And as long as we can raise the capital and see a reasonable return from the investments and we’ll be certainly continuing to work down that kind of a path.

Paul Lechem - CIBC

Last question for me on the Northeast wind, you mentioned I believe there was recent RFPs in New England for renewable that and (inaudible) done quite well on that. Does that mean are there any new projects that they are going to be building that could be vented into the partnership or how should we think about the opportunity there?

Judy Steele

Paul, it’s Judy Steele. So first we entice about a half a dozen projects kind of under at various stages of development I would say that in so we’ll kind of know as we get further along into 2014 which ones will kind be moving ahead first, but the expectation is that they will have additional projects that would meet the hurdle rate inherent in transfer agreement and we would expect to be making additional investment.

Paul Lechem - CIBC

Could expect some clarity on that sometime through mid-14?

Judy Steele

Yeah.

Chris Huskilson

Paul if you just take the two projects that I referred to in the note, that’s about $150 million worth of spending from our perspective and as long as they meet the transfer agreement, then you will see those show up in the joint venture.

Paul Lechem - CIBC

Okay. Are those operating facility already?

Judy Steele

No.

Chris Huskilson

NO, not yet, they are underdevelopment and it would be expected to be operating by the end of 2015.

Paul Lechem - CIBC

I got you. Okay, thank you.

Operator

Your next question comes from the line of Ben Pham from BMO Capital Markets. Your line is open.

Ben Pham - BMO Capital Markets

Just wanted to check the rate filing in fiscal, is that plan for next year?

Chris Huskilson

I think it’s too early to state that, we are doing a very review right now and we will be in a better position in the near future to make that statement.

Scott Balfour

Well, I think then we are under a settlement agreement as we speak in those disclosures, and so I think that’s the guidance you should take at this point.

Ben Pham - BMO Capital Markets

Okay, I was just thinking more beyond that and prepare for that, that’s fair enough. And just on New England, is it just [approval ] to getting facts right now?

Chris Huskilson

All right, could you repeat that?

Ben Pham - BMO Capital Markets

Just on New England acquisition, is it just FERC approval or just what’s then in terms of that you need to take a approval for that transaction done?

Judy Steele

Yeah, fundamentally, it’s FERC approval which we believe is imminent, so we will be expecting to close certainly within the quarter and hopefully within the month of November.

Chris Huskilson

I think Judy, it’s fair to say, Ben, that there was no intervention on the FERC process, so it’s moved along quite well.

Ben Pham - BMO Capital Markets

Just a question is on your liquidity levels and I noticed your cash balances is quite high, just a bit more than lot warranted and then I have seen in the past. And just can you comment or just what your liquidity is right now and there was any meaningful working capital (inaudible) post Q3?

Chris Huskilson

Yes, so at the end of the third quarter remember we have done a medium term note within [cushion] power in the second quarter and it was repaid a day after the end of the third quarter, so first day of the fourth quarter that existing maturity that we effectively refinanced early. So we were sitting with that capital for couple of months, because we did a note issue earlier in the year that we can use to repay the maturity mark-to-market on the first day of the fourth quarter.

Ben Pham - BMO Capital Markets

Okay, great. That's it for me. Thanks.

Operator

Your next question comes from the line of Jeremy Rosenfeld from Desjardins. Your line is open.

Jeremy Rosenfeld - Desjardins

So just going back to Nova Scotia for a second, I'm curious have you at backs talks at all with the political leadership on what they would like to see in terms of changes for the market structure and potential changes for NSPI, what kind of financial impact that might have?

Bob Hanf

So Bob Hanf here. So it's early days, we have not received any proposed legislation to review. We have met with the minister and members of the department and have had very constructive meetings and we very much look forward to working with them on these important matters.

Jeremy Rosenfeld - Desjardins

So, it's still a little bit too early to note definitively where they would like to go and it's kind of something that they are in discussion, which they haven't come with the proposal at this point?

Bob Hanf

It is too early and we look forward to working with them.

Jeremy Rosenfeld - Desjardins

Okay. Just coming back on the discussion around the first wind assets, just want to clarify, you wouldn't necessarily wait for a project to be placed into service before bringing that project into the partnership. So that's now one of the hurdles if I'm understanding correctly?

Judy Steele

You are correct, yes, but there are series of kind of milestones that first wind as a developer has to cross before they’re able to kind of bring the project forward for consideration.

Jeremy Rosenfeld - Desjardins

Okay, perfect. And then maybe you can just clarify something for me, from the provision that was taken as a main utilities, does the provision cover sort of the full estimated impact if the proposed changes in rates were to be enacted or is this sort of a partial provision and then there could be some additional amount that you could take in the future?

Scott Balfour

It’s Scott speaking. So the provision effectively relates to the full impact of the refund period of the retroactive period which is the one that which we have a little more clarity in terms of guidance from the administrative law judge. So yes, it reflects the full impact of that if the FERC accepts the recommendation of the administrative law judge.

Jeremy Rosenfeld - Desjardins

Okay, perfect, excellent. That’s it for me at the moment. Thanks.

Operator

Your next quarter comes from line of Robert Kwan from RBC. Your line is open.

Robert Kwan - RBC Capital Markets

Maybe just go back to Maine here and with respect to the provision you talked as we look forward here, what ROE are you booking the rates now you’re taking essentially change in assumptions in ROE?

Scott Balfour

It’s Scott again, Robert. So at this point, we’ve fully taken the impact to the retroactive period, there is less clarity on what the ROE impact will be if any on the prospective period and so we're continuing to record quarter ends at the existing rate when we have that information and we can reflect that, but for now that’s the best information we have.

Robert Kwan - RBC Capital Markets

Okay. Makes sense, then just turning to funding, can you just, I don’t know if you have any update since we've last spoke on the funding plan for both the New England acquisition and also the base business, timing amounts, is there any change in the way you are looking at the New England acquisition capital structure and then also with what you are doing in the First Wind refinancing and the proceeds that are going to be upstream, does that change as well and if your thoughts on the equity side of funding for those acquisitions?

Chris Huskilson

Certainly the funds from the refinancing of Northeast wind joint venture will be used in contribution towards the financing requirements for the gas plant purchase. The balance of the proceeds required to close would be combination of bridge financing, interim debt financing and internal cash resources. And then in good time, likely early in new year, as it relates to the debt strategy for that acquisition that gives us time to put a permanent financing into place. So we’ll close on that basis and look to optimize to debt financing for that acquisition early in the New Year. As it relates to the balance of financing needs for the corporation, obviously we continue to proceed among the path and we’ve chatted to both before in terms of working to balance our capital structure towards our target and so nothing changed in that regard from previous conversation.

Robert Kwan - RBC Capital Markets

Okay. Just last on kind of a small clean up question, if I am reading and it was isolated through quarter, Bear Swamp, where to business interruption proceeds received during the quarter and were they matured?

Judy Steele

Yes, there were. And they were approximately $3.5 million.

Robert Kwan - RBC Capital Markets

Okay. After tax?

Judy Steele

No, before.

Robert Kwan - RBC Capital Markets

Okay, great. Thanks Judy.

Chris Huskilson

Thanks, Robert.

Operator

Your next question comes from the line of Linda Ezergailis from TD Securities.

Linda Ezergailis - TD Securities

Thank you. Just a follow up question on Bear Swamp, is that the whole proceeds of the business interruption or might there be some more coming?

Judy Steele

No that’s pretty much it.

Linda Ezergailis - TD Securities

Okay. That’s great. Thanks Judi. And another clean up question what might be an appropriate corporate tax rate run rate to you?

Scott Balfour

Yeah. I think 31% would continue to be the appropriate rate we do provide a tax rec table every quarter in the MD&A continue to use that as guidance as well.

Linda Ezergailis - TD Securities

Great thank you.

Chris Huskilson

Thanks Linda.

Operator

And our next question comes from the line of Andrew Kuske from Credit Suisse. Your line is open. Andrew your line is open, you may be on mute. Your next question comes from the line of Matthew Akman from Scotia Bank. Your line is open.

Matthew Akman - Scotia Bank

Thank you very much. Wanted to chat about the deferrals at Nova Scotia Power first deck, I guess one of my favorite topics for 3.30 PM on a Friday afternoon. No seriously though the fuel cost seem to have gone down in the quarter year-over-year obviously they are up for the full year year-over-year and so there has been fam build up, but I am wondering whether that fam is going to start to turn down now that the fuel costs look like they are better on a sort of year-over-year comparison. I don’t know it’s for Scott or who it’s for.

Bob Hanf

Matthew it’s Bob Hanf. I can take that. So as we look to the rest of the year, I think the costs are certainly more aligned with our forecast and so it leaves certainly most of that pain behind us. So I think we are in a good position for the remainder of the year, so I think you captured it Matthew.

Matthew Akman - Scotia Bank

On the rate stabilization regulatory balance of $13, is that expected to go up down or sideways I guess by the end of the year?

Bob Hanf

So we expect it to be flat in Matthew.

Matthew Akman - Scotia Bank

So [MDR] 13 or MDR zero?

Bob Hanf

13.

Matthew Akman - Scotia Bank

Okay, thank you very much, guys. Those are my questions.

Chris Huskilson

Thanks Matthew.

Operator

(Operator Instructions) Your next question comes from the line of Jeremy Rosenfeld as a follow-up from Desjardins. Your line is open.

Jeremy Rosenfeld - Desjardins

Hey, great, thanks. Just one other clean up question; at Grand Bahama in terms of the earnings sharings mechanism, just curious how much was booked last year relative to the, I think it was $1.7 million this year?

Scott Balfour

Nothing booked last year Jeremy.

Jeremy Rosenfeld - Desjardins

Okay, perfect, thanks.

Chris Huskilson

Okay, thank you.

Operator

Your next question comes from the line of Paul Lechem from Credit Suisse. Your line is open.

Andrew Kuske - Credit Suisse

Small technology issue on our end. Just a question as it relates to the New England plants that you are about to close on and your existing power portfolio, what is your expected hedging outlook on I guess the pro forma plans once you actually close the deal?

Judy Steele

So Andrew it’s Judy. I would say that’s under development. I mean generally we would look to kind of hedge out contracts to play up to some extent and leave ourselves put some upside for the days when it's really nice to have. I think what we are going to do is kind of digest the plan and evolve that strategy over the first few months.

Scott Balfour

I think Andrew though from a strategy perspective, I mean we're not buying these things to have market facing activity. Our overall approach is we believe that these plants are well positioned both in the marketplace and also from a timing perspective. We're very happy with what we have paid for these facilities. And we believe that that would create future economic value for us.

The other thing is that Judy’s team does a tremendous amount of work in this marketplace. They are moving around a billion cubic feet of gas a day now. And so that gives them great opportunity to understand how to source gas for these facilities and how to ultimately put producers and consumers together and that's really what the long-term plan is for these facilities. When we can find producers that's interested in supplying and a consumer that's interested in buying, that's really where we want to go. And so that's really where our longer term play is, but for sure, in the very short-term, we're going to be market facing, but that's an early versus the late approach.

Andrew Kuske - Credit Suisse

So I guess just a follow-up to that on a longer term basis, do you see any opportunities to have these plants supply power in the Nova Scotia and we really think about power flowing down from the Nalcor projects and then there is the provisions on market based power. Could you see some power from this facilities flowing back in into Nova Scotia? And then sort of a bigger and broader question also is, is there an opportunity on a longer-term basis to see these plants eventually included in a rate base construct as some coal facilities come offline in Nova Scotia?

Scott Balfour

Well, I think first of all, certainly as the market in the whole region evolves we think that these facilities will be more and more important, because there are coal facilities coming off in the Southern market. As we've seen recently, nuclear plants are beginning to be licensed. And so there is a lot of change happening in the marketplace. And so again from that perspective we think these plants are well positioned.

As it relates to the Maritimes, there is really a big open question right now as to whether or not we have gas supply in the Maritimes or not. We're looking forward to having the Encana project come on and be reliable gas supply in this region, but that even as that happens, it’s a very short-term situation, they maybe there supplying gas for 5, 8 maybe 10 years. And then beyond that it’s uncertain as to where gas is going to come from.

So what we think about these facilities is they provide us with a hedge where we can in fact produce electricity and move electricity versus having to move gas. And so we're in a position where we can watch and participate in the market evolution in this region and participate in the market evolution in New England and it gives us that kind of flexibility.

If we think specifically about Bridgeport and Tiverton, they’re well positioned in their current markets supplied by independent pipelines. And I think that they will continue to be very strong market players in those markets. The Rumford plant is a totally different situation. It’s relatively underutilized facility and ultimately needs to get a higher utilization. And that’s the biggest opportunity in this portfolio right now.

So how we turn that into a much higher participation plant, we’ll continue to be open question for the next in a while, but anything from contracting it locally making it a swing plant for energy coming out of Canadian Hydro or maybe even physically moving the facility, all those things are on the table at this point. And we’ll just move along through time and see what the best approach is.

Andrew Kuske - Credit Suisse

Hey that's very helpful. And then if I may just as one follow-on question. And just an update on title and what you’ve have done there, it’s gone very quiet, I know you have the test projects a while back and just is there anything going on the title side?

Chris Huskilson

It has gone a big quiet although what's going on right now is the feed in tariff is before the Nova Scotia regulator. And so I think most proponents are waiting to see what ends up happening with feed in tariff and where that goes. And then I think once back in place, you will see some more activity occur. We continue to be engaged with a number of supplies, certainly OpenHydro being one of them, but others as well. And if the circumstances are right you could certainly see us investing again in that resource because we do believe in it for the long-term and we just have to get the right circumstances to make that work.

Andrew Kuske - Credit Suisse

Okay. That's very helpful. Thank you.

Chris Huskilson

Okay. Thanks Andrew.

Operator

There are no further questions at this time. I’ll turn the call back to Chris Huskilson for closing remarks.

Chris Huskilson

Okay. Well, thank you very much. And thank you all for your participation in the call today. We’ll be participating in EEI next week and we’re hopeful that we will see a number of you there at that conference. So thank you all very much and enjoy your weekend.

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