PUB halts Hydro budget review

The Board of Commissioners of Public Utilities has halted its review of Newfoundland and Labrador Hydro's proposed capital budget for 2013.

The Public Utilities Board (PUB) decides how much of the spending set out annually by Hydro, for planned construction and maintenance work, gets approved.

The review process begins with Hydro filing a detailed budget proposal. Requests for further information can then be filed by those with a stated interest in the case. The questions and calls for supporting documentation are provided to Hydro for response.

In the review of the 2013 budget, Hydro has responded to more than 200 requests for information. The requests come from the PUB, Newfoundland Power, the Consumer Advocate and representation for the island's industrial customers. That said, two requests - both for specific documentation - have not received a response.

"Consideration of Hydro's application will be suspended pending the receipt of the responses to these requests for information and/or a further application from Hydro regarding the requests for information or application status," stated a letter sent out by the PUB this week.

One of the outstanding items asks for, "copies of both the pre-2011 and the 2011 Canadian Dam Association guidelines, pertaining to public safety around dams and associated waterways." It was filed by the industrial customers and relates to a proposal to add new signs and barriers around Hydro assets.

The second item is a request from the PUB for an updated report on "Generation Planning Issues."

"We are working on this report now and will submit it to the board once it is complete. There is one additional (request) outstanding which we are reviewing as well," a representative for Hydro stated, responding to questions from The Telegram Friday.

"There is enough time in our process and timeline to accommodate the additional work we're completing.," the Hydro representative said.

Hurdles ahead

Documents filed for the review to date suggest Hydro will be ultimately challenged on several of its proposed construction projects.

For example, the utility has proposed a 15-year construction program to add female washrooms to 60 of its facilities. If approved, the work is to start next year at a cost of $250,000 for the year.

The project is not sitting well with Newfoundland Power.

"Hydro has not yet completed an assessment of its facilities to determine where work is required to be completed; the order in which facilities will be completed; or what facilities will be completed in 2013," states an Oct. 3 filing by that utility.

Newfoundland Power also challenged Hydro on the question of whether or not it investigated the possibility of getting an exemption to Occupational Health and Safety regulations requiring the washrooms to be made available.

Hydro has pointed to a phone call with a provincial representative on June 28, 2012.

"The enforcement officials' interpretation of the (regulations) indicated that no allowance would be granted and that if male and female workers are expected to conduct work at the facility then separate washrooms are required."

Questions were also filed around Hydro's proposal to include some detailed front end engineering and design (FEED) work in its capital budgets going forward. Hydro has stated it wants to do more engineering earlier on, providing firmer and more accurate cost estimates to the board.

In creating the 2013 budget proposal, $229,700 was spent on FEED. The 2013 budget proposes $472,100 be approved for work to help with the 2014 budget.

"The FEED costs associated with those projects that are not approved as capital expenditures by the (PUB) will be expensed by Hydro," the Nalcor Energy subsidiary has stated.

In a long-term forecast of spending, Hydro has predicted its total capital costs will increase from around $66 million in 2013 to $112 million in 2014 and more than $150 million in 2017. That spending is not part of the Lower Churchill development.

"There are no projects in the plan to facilitate or accommodate the transmission of Muskrat Falls power. The costs noted above are driven by asset condition, system operating conditions and load growth," Hydro has stated.

afitzpatrick@thetelegram.com