Hydro budget adds $30M in costs year over year

Ashley Fitzpatrick
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Proposed construction and maintenance spending yet to be approved

The Holyrood power generating station. Nalcor has been increasing its spending in its quest to keep the province’s energy facilities in good running order. — Telegram file photo

The province is spending billions of dollars on the Muskrat Falls project, but that spending is separate from the year-to-year cost of keeping the province’s main power generators up and running.

Newfoundland and Labrador Hydro filed its annual capital budget application for 2014 with the Public Utilities Board (PUB) Aug. 5. The utility wants approval for 96 projects, totalling $98.7 million.

Last year, the proposal was about $66 million worth of work, with $62 million in spending ultimately approved by the regulator.

The 2014 application represents more than a $30-million jump in requested capital spending year-to-year.

It is a next step towards a new normal for Hydro’s annual budgets. From 2008-12, average yearly capital spending was $59.3 million.

Looking 2014-18, the utility is expecting an average annual cost of $162 million for maintenance and upgrades.

For the 2014 capital budget proposal, more than 2,000 pages of detailed documentation was filed with the PUB by Hydro and can be found on the PUB website.

The utility states all of its proposed projects are required, in order to continue to safely provide power to customers — including Newfoundland Power — at the lowest possible price.

Of note, the utility needs to keep up the Holyrood Thermal Generating Facility for use as a key power plant and, as Muskrat Falls comes online, a standby facility until 2020-21. Hydro has provided the PUB with its plan for spending on Holyrood through 2023.

“The Holyrood capital projects contained in this application are necessary to refurbish and renew assets which are at the end of their useful lives, and which must be replaced to maintain reliability through to the completion of the Muskrat Falls development,” the documentation filed with the regulator states.

Outside of the Holyrood plant, proposed capital projects vary in location and purpose.

Plans are being made for the replacement of generating units and upgrades at Hydro’s isolated diesel plants.

Transmission infrastructure is set to be replaced at some sites, including: select tower foundations, power transformers, circuit breakers, insulators, surge arrestors, instrument transformers, disconnect switches, and breaker controls.

The utility is continuing multi-year projects already underway, including the addition of female washrooms to its single-washroom buildings.

The 50 MW power plants at Hardwoods and Stephenville — having operated reliably with little expense for decades — are now beyond their normal life expectancy and need work, Hydro states.

While some multi-year projects being planned will cost into the millions, two stand out above the rest.

One is the addition of a 60 megawatt turbine at Holyrood, requiring about $99 million in spending over three years.

The second is an upgrade of the transmission line corridor between Bay d’Espoir and the heavy power users on the Avalon Peninsula. That has been roughly estimated at $268 million over five years.

The PUB’s review of the Hydro capital budget application is scheduled to run into October.

Hydro also has a multi-year general rate application before the board. That application, requesting a rate decrease for most Hydro customers, is subject to a separate review.



Organizations: Public Utilities Board, Newfoundland and Labrador Hydro, Newfoundland Power Holyrood Thermal Generating Facility

Geographic location: Holyrood, Plans

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Recent comments

  • concerned
    August 22, 2013 - 09:15

    I think this gov. is doing what they want when they want. an where they want they never listen to the people they are onley a bunch of recycled school teachers any way 2015 will thake care of them theirs a lot not running again thank god..for that....

  • Ed. Anstey
    August 19, 2013 - 09:19

    Charles the northeast Avalon would be better off if the rest of the NL ratepayers pays for your dream.

  • Craig
    August 14, 2013 - 14:23

    Sounds like the expenditures that we were told WOULD HAVE to be made if Muskrat Falls did NOT happen are taking place anyway. What a load of crap! Thanks to bill 29 Nalcor and the PC administration can hide the truth. Until after an ABC government is elected in 2015 that is!

    • Fred Penner
      August 14, 2013 - 20:05

      "Sounds like the expenditures that we were told WOULD HAVE to be made if Muskrat Falls did NOT happen are taking place anyway. " Why would the existence of MF change the maintenance plans for the remainder of the power system?

  • Charles
    August 14, 2013 - 10:58

    Oh. Just take the thing down and mothball it. It's an eyesore, a major polluter, and a money pit. The northeast avalon would be better for it!