EMERA INC. 9
Stakeholdersand Stakeholder Perspectives
EmeraInc. is a geographically diverse service and energy company that hasits headquarters in Halifax, Nova Scotia. At the end of the year2014, the company approximated its assets at $10.19 billion andrevenues of $2.97 billion. The main investments the company isheavily investedin include thegeneration,transmission, and distribution of electricity transmission of gasand utility energy services. The company is currently offeringservices in Canada, the United States of America and in theCaribbean, where it already has a presence in four countries.
Giventhe huge size of the company, it also follows that it has severalentities that get affected by its activities. These entities,also called stakeholders, are diverse and wide,and repeatin every country that the company offers service and productsin.The main stakeholders are employees, shareholders, governments,customers, suppliers, contractors, and other organizations, whichinclude competitors, environmental groups, and internationalorganizations.
Employeesrefer to all people that offer their manpower to the generation ofthe company’s services. Currently, most of the company’semployees are unionized. Following the expiration of a previouscontract, the company got intoanew contract with over 900 unionized employees, which would last formore than fifty-six months. Estimates place the percentage offull-time and term employees currently serving the in the Emera laborforce to be at 51%. Other contracts also continue to expire, althoughthe company continues to maintain active talks with labor unions toavoid employee disruption.
Shareholdersrefer to people who invest their money ina company by buying its shares on the stock market. Since is a big company, it has a couple hundred of shareholders who have aninterestin the way the company operates. As a big company, the level ofinvestment by various shareholders varies a lot. Some have hugeinvestments into the company while other has small numbers of shares. has both individual and corporate shareholders, whocontrol its operations.
Theoperations that isinvolvedwith entail crossing paths that are sensitive to the governments ofthe countries that the company operates. The company produces,transmits, and distributes electricity and gas, via lines. In doingso, it comes in contact with local, regional, and nationalauthorities in Canada, the United States, and the Caribbean.
EmeraInc. operates in local communities where its operations affect theway of life of the people around it. The communities are both ruraland urban in nature. The communities also speak different languages,but English is the most prevalent in the US and Canada. In theCaribbean, there are many other local languages, although Spanish isspokenby a significant number of people.
Customersare among the most important stakeholders for The companysells its electricity to both individuals in homes and businessentities. Governments and local authorities also buy electricity from For instance, in Canada, several local and municipalgovernments buy electricity from and resell it toconsumers in their neighborhoods. The company also has internationalconsumers in the US and the Caribbean.
Suppliersto provide workers’ clothing, industrial parts,vehicles, and building materials. A government policy that came intoforce in 2011 also required a branch of , called NovaScotia Power to buy renewable energy developed by community-basedorganizations. The policy is called Community Feed-In Tariffs(COMFITs).
Contractorsare hired to handle various tasks such as supply materials, buildcertain infrastructure, handle production, transmission, anddistribution of electricity in a given area, and provision ofservices on the company’s sites. Contractors vary in size and canbe individuals or business entities. Other organizations also formmajor stakeholders, especially competitors. only has onemajor competitor in the region it serves, that is, Nalcor. Otherorganizations include consumer organizations such as ACORN(Association of community Organization for Reform Now), which fightfor the rights of the people.
Perspectivesof Various Stakeholder Groups
Consumersare dissatisfied with the various issues that are facing at the moment. Even though they had taken the issues considerablywell in the past, the final straw seems to have resulted from theincreases in price. According to ACORN Canada (2012), people areprotesting the latest application by the company to raise the cost ofelectricity. They carried placards and posters that communicated themessage that the company was bleeding the people of the province bysteadily raising prices. Following the application for a six percentrate increase over a period of two years, the company would haveraised the cost of electricity seven times in eleven years. Theincrease in cost was scheduled to go into effect in January 2013 andJanuary 2014 (Empty_byline, 2012). Angry protesters demand of theNova Scotia government to stop the increases in electricity cost andto take back what rightfully belong to the people. The crowds gatheraround the company’s and government buildings as they shout. Fromthe protesting, it is clear that consumers are angry about theincrease in prices, which are beingdrivenby huge annual profits the company makes and the generouscompensation packages given to its top management team. Consumers arealso demanding Emera Inc.to startinvesting more inthe province and improve its efforts towards the generationof clean energy. Another important stakeholder that participated inthe protesting is ACORN. ACORN is responsible for organizing a lot ofthe riots that wereundertakenby consumers, which implies that it is in opposition to what thecompany is doing. ACORN calls ’s monopoly and pricecontrol as power corporation’s grip on the people of Nova Scotia.
Consumeradvocate component within the Nova Scotia Utility and Review Board isalso highly opposed to what is doing and calling onthe companyto lower its rates on electricity. A consumer advocacy spokesperson,John Merrick, claimed that the increases in cost were just abeginning and that “there’s more where that came from becausecosts are beingdeferreduntil after 2015.” The advocacy is sound and clear with members ofthe component fueling public anger against with claimsthat Nova Scotia could be the province that is paying the highestrates forelectricity in the whole of Canada. Nova Scotia Power has disputedthose claims stating that Halifax has the fourth highest rates in thewhole country. The author at thechronicleherald.ca seems to thinkthat are insignificant in comparison to the company’s size andannual income.
TheNova Scotian government has taken note of the complaints raised bythe citizens of the province and isinvolvedin taking certain measures that will see that the claims are stopped.The government is more interested in stopping monopoly in electricitythat is currently enjoying in the province. Over theyears, the government has set policies that have made it mandatoryfor the company to buy renewable energy that is produced locally bycommunity-based organizations. The new policy wasestablishedin 2011 and called Community Feed-In Tariffs. This wasaimedat lowering the cost at which sells its electricity toconsumers. In addition to that, the government has introducedprojects such as the Muskrat Falls project, in which most power hasbeengivento Nalcor in order to keep ’s monopoly in the energyindustry within the region. There have also been considerations toimport power from other jurisdiction to compete with Emera in theregion. In simpler terms, the government intends to reduce monopolyas a strategy of lowering costs of energy to consumers (Nova ScotiaPower, 2015).
Competitorshave taken a major initiative in exploiting the incentives that thegovernment is enacting to increase their production and gain morecontrol over the contended market. A lot of independent renewableenergy producers have come up and are producing electricity andselling it to
Employeesare adhering to the company’s long-standing strategy of producingmore power, gaining more market, and remaining the main power companyin the region and beyond. The top management isaggressively involvedin strategies that further the company’s ambition beyond itscurrent borders. Recently, the company stated that it intends toinvest more in the Caribbean and the US. This can be seen with therecent deal to buy TECO energy. With the acquisition of TECO Energy, hopes to diversify into other areas and products to reducebeing over dependent on Nova Scotia interms ofits annual incomes.
Theproblem in the case of seems to be a normal one where acorporation is trying to make high profits at the expense of itscustomers. has kept applying cost increases on itsconsumers over a period of eleven years with hopes that stretchingthe increases over time would not benoticed.And if they werenoticed,they can be attributed to changes in economic situations over time.However, that is not what happens consumers notice the increases andthey take off to the streets to voice their concerns and urge thegovernment and the company to do something about the situation.Executives in the company are beingpaidtoo much and whatever the reason that is happening that way is notvery clear.
EmeraInc. Rob Bennet, the president and CEO of Nova Scotia Power wasearning $1.15 million a year in 2012, which was an increase of 23%over the previous year’s salary. Similarly, Chris Huskilson, thepresident and CEO of , which is the parent company of NovaScotia, was pocketing $2.99 million a year. The company does not alsoseem so determined to invest more in renewable energy, which can besaid to be a tactic to keep profits going through the roof everyyear. The company has tried to adapt to the situation by diversifyinginterms ofproducts and geographical reach, but most of its income isstill tiedto Nova Scotia province (Empty_byline, 2012).
Thebest way to combat this situation is to analyze the impact of eachstakeholder and make decisions that are intended to satisfy thestakeholder. Stakeholders should bearrangedinterms ofpriority and served in the same order. Consumers are an importantpart of any business and as such, their concerns need to beaddressed. I think that the company should consider keeping consumerssatisfied by reducing the cost of electricity. Canada is a developednation,and the outcry of consumers will attract a lot of attention fromother stakeholders, worst of all the government, which will be forcedto formulate solutions to the problem. Some of those solutions can bevery damaging to the company. Secondly, the company should considerrelinquishing its grip over the market in some areas to allow healthycompetition. It should encourage small producers to produce moreenergy and sell it to the company. This would create competition,which would eliminate the supposed monopoly power the company isclaimed to have already. The third option is diversification ofproducts, services, and geography. There is always never a betterstrategy of ensuring maximum growth and profitability of a firm thandiversification in products and coverage. Geographical diversityexposes the company to new markets and challenges, which make it moreprofitable, innovative, and aggressive in achieving goals andsurviving in the new markets.
Itis the responsibility of the government to ensure that there is faircompetition in its industries. Leaving a single company monopolizethe market, hence dictating prices and interactions with clients isfalling short onits duty. In the case of Nova Scotia, the government should encourageand if possible fund competition. The government should enactpolicies that limit the power of on the market andencourage entry by new firms and growth by those that already exist.The government should also start its production project to competewith and create an alternative for consumers. Thegovernment can perform better researchthus, itwill be able to create more options forrenewable energy. The last option the government has is to split into two or three competing firms to enhance competition,which will ultimately drive electricity costs down (Kaysen &Turner, 1959).
ACORNCanada. 2012. Chronicle Herald: Groups gather to protest power ratehikes, executive salaries. 24/11/2015 fromhttps://www.acorncanada.org/content/chronicle-herald-groups-gather-protest-power-rate-hikes-executive-salaries
Empty_Byline.(2012). Nova Scotialate investing in energy security.Retrieved 24/11/2015 fromhttp://thechronicleherald.ca/opinion/95851-nova-scotia-late-investing-in-energy-security
Kaysen,C., & Turner, D. F. (1959). Antitrustpolicy: An economic and legal analysis(No. 7). Harvard University Press.
NovaScotia Power. (2015). Monopoly status. Retrieved 24/11/2015 fromhttp://www.nspower.ca/en/home/about-us/how-we-operate/monopoly-status.aspx