New­found­land Power shut out of re­view: pres­i­dent

Peter Al­teen says he ex­pects more in­vest­ment needed

The Packet (Clarenville) - - Editorial - BY ASH­LEY FITZ­PATRICK ash­ley.fitz­[email protected]­gram.com

New­found­land Power pres­i­dent Peter Al­teen says the de­ci­sions re­sult­ing in the Muskrat Falls hy­dro­elec­tric pro­ject, in­clud­ing the de­ci­sion to limit a re­lated re­view by the util­i­ties reg­u­la­tor, were driven by politics and not con­cern for ratepay­ers.

“The politics shut us out of the process,” he told re­porters fol­low­ing tes­ti­mony Mon­day, Dec. 17, at the Muskrat Falls In­quiry in St. John’s, re­peat­ing a point he also made on the stand.

Al­teen said New­found­land Power had se­ri­ous con­cerns re­lat­ing to cost and re­li­a­bil­ity be­fore Nal­cor En­ergy’s hy­dro­elec­tric pro­ject on the Churchill River was sanc­tioned at the end of 2012. But he said New­found­land Power was never mean­ing­fully con­sulted by the provin­cial govern­ment. He ac­knowl­edged New­found­land Power never wrote to the premier or oth­er­wise flagged ob­jec­tions it had to the re­stricted Pub­lic Util­i­ties Board (PUB) process re­view­ing the Muskrat Falls plans, sug­gest­ing the com­pany didn’t be­lieved there would be much point to the ges­ture due to lack of con­cern about their po­si­tion to that point.

Al­teen said the com­pany did raise con­cerns with the PUB at the first op­por­tu­nity — af­ter the rolling black­outs and power outages on the is­land in Jan­uary 2014, now com­monly known as DarkNL.

“There wasn’t a lot of in­for­ma­tion avail­able to New­found­land Power (be­fore) and, be­cause of that, New­found­land Power had real prob­lems just get­ting an in­formed opin­ion as to what was go­ing on around it,” he said of the Muskrat Falls hy­dro devel­op­ment. “In ret­ro­spect, ab­sent in­for­ma­tion, New­found­land Power is go­ing to be re­luc­tant to ex­press an opin­ion be­cause we like to think that our rep­u­ta­tion is such that we speak fac­tu­ally. So no, we don’t re­gret what we’ve done in the past and we’re con­tent with how we han­dled the sit­u­a­tion.”

Cost, re­li­a­bil­ity not set­tled

New­found­land Power re­mains con­cerned with costs it will be passed down, now with the added strain from over­runs on the megapro­ject. And he noted there are un­re­solved is­sues of re­li­a­bil­ity un­der in­ves­ti­ga­tion by the PUB.

Al­teen specif­i­cally tes­ti­fied the Mar­itime Link is — by cur­rent un­der­stand­ing — tech­ni­cally ca­pa­ble to pro­vide a 300-megawatt backup to the is­land sys­tem power im­ports, if it comes to that, but com­mer­cial ar­range­ments for power are still be­ing worked on by Nal­cor En­ergy. The big­ger is­sue right now, he said, is the chal­lenge of trans­mis­sion into the Avalon Penin­sula, to the bulk of the en­ergy de­mand, if the Labrador-Is­land Link goes down with­out the Holy­rood plant still in op­er­a­tion. The plan was to de­com­mis­sion Holy­rood once the Muskrat Falls hy­dro­elec­tric plant comes on­line.

“Even if you get it, the 300 MW of sup­port (from the Mar­itime Link), we’re still go­ing to have prob­lems on the Avalon Penin­sula, be­cause there are trans­fer ca­pa­bil­i­ties as­so­ci­ated with the AC trans­mis­sion sys­tem if the DC link, the Labrador-Is­land Link, is down,” he said, point­ing to lim­its on what the lines can carry.

“The abil­ity to get enough power across those lines, main­tain­ing volt­age, is very hard in win­ter peak con­di­tions,” he said, adding New­found­land and Labrador Hy­dro has been fil­ing on the is­sue to the PUB within the last two weeks and dis­cus­sions are ongoing.

Al­teen said trans­mis­sion could be beefed up, new gen­er­a­tion added or a com­bi­na­tion of the two. On an im­por­tant note for ratepay­ers, any new trans­mis­sion or new gen­er­a­tion would mean ad­di­tional costs above and be­yond the ex­ist­ing Muskrat Falls pro­ject costs.

The re­li­a­bil­ity is­sue was not well un­der­stood by New­found­land Power be­fore the pro­ject’s sanc­tion­ing, Al­teen said, based on lim­ited doc­u­men­ta­tion and op­por­tu­nity to test as­sump­tions.

“We were not fully aware of all of this. I don’t think it had been fully mod­elled at that time, but I don’t know,” he said.

Al­teen said the PUB re­view in 2011-12 in­clud­ing the Muskrat Falls pro­ject op­tion for new power for New­found­land was un­usual in its lim­i­ta­tion to two al­ter­na­tives, and time­line for the re­view, among other things.

New­found­land Power, a For­tis sub­sidiary, is the main elec­tric­ity dis­trib­u­tor for cus­tomers in New­found­land and Labrador. The com­pany has some of its own gen­er­a­tion ca­pa­bil­ity, but re­lies on New­found­land and Labrador Hy­dro (and Nal­cor En­ergy) for the ma­jor­ity of the power de­liv­ered to cus­tomers.

Al­teen said New­found­land Power is ex­pect­ing new doc­u­ments from the PUB in Jan­uary that will pro­vide in­for­ma­tion as a jump­ing off point for more in-depth dis­cus­sions around cus­tomer rate mit­i­ga­tion. A re­view process spe­cific to rates, in­clud­ing han­dling Muskrat Falls costs, has been re­ferred to the PUB by the Lib­eral govern­ment. An in­terim re­port is due to the govern­ment in Fe­bru­ary 2019, with a fi­nal re­port due in Jan­uary 2020.

Al­teen said New­found­land Power wants to be in­volved in the re­view process.

“I think there’s a big pre­sump­tion that all of the Muskrat Falls costs can or should be re­cov­ered from elec­tric­ity cus­tomers. I’m not a be­liever that that course will be a rea­son­able course in the end. But it’s go­ing to take some time be­fore we get to a so­lu­tion, I think, that is more cus­tomer­friendly or af­ford­able for our cus­tomers. We’re com­mit­ted to help seek that,” he said.

JOE GIB­BONS/THE TELE­GRAM

New­found­land Power pres­i­dent Peter Al­teen tes­ti­fies Mon­day at the Muskrat Falls In­quiry in St. John’s.

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