PUB pressed to look long-term in outage investigation

Ashley Fitzpatrick
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The fire alarm blared only briefly, but long enough to force an end to the incessant typing and hushed conversations inside the packed Board of Commisioners of Public Utilities (PUB) hearing room at the Prince Charles Building on Torbay Road in St. John’s Wednesday morning.

Public Utilities Board (PUB) chairman and CEO Andy Wells arrives on the bench at the PUB building on Torbay Road on Wednesday morning to begin proceedings into the Investigation and Hearing into Supply Issues and Power Outages on the Island Interconnected System in relation to last month’s ongoing blackouts and power outages. — Photo by Joe Gibbons/The Telegram

A gathering of the power-minded was called by the PUB so the regulator might hear from all-comers before deciding what to include in its review of system reliability and its investigation into the rolling blackouts and unplanned outages on the island of Newfoundland from Jan. 2-8.

The blackouts affected individual people, heavy industry and small businesses. A representative of one of those businesses, Nu-Quest Distribution, was explaining the stresses, calling for the PUB to take a long-term look at reliability, when the alarm sounded.

“There’s a joke there somewhere,” quipped PUB chairman Andy Wells, “but I just haven’t found it.”

The PUB has already begun its look into the power outages, most recently hiring the Liberty Consulting Group for on-the-ground investigations. The same consultant was used by the Nova Scotia utilities regulator after unusual outages in that province in 2004.

 

Newfoundland Power vs. Hydro

The utilities and individual presenters at the PUB’s meeting were focused on how far the regulator’s questions, extending from its investigation, will reach.

The session resulted in a clear divide between Newfoundland and Labrador Hydro and everyone else. It showed the PUB has an important decision to make: look at how the island’s power supply will be secured with Muskrat Falls power online, or look only at the outage events and the island’s supply of power for the next few years.

For its part, Newfoundland Power has asked for the long-term view.

“We want to make it clear Newfoundland Power is not questioning the decisions to develop Muskrat Falls or to build the Maritime Link ... those decisions have been made,” said Ian Kelly, speaking on behalf of the utility.

“What the Board should examine is how reliability and security of supply will be assured after the commissioning of Muskrat Falls and after the decommissioning of Holyrood.”

Newfoundland and Labrador Hydro said taking the long view will make the PUB’s review more complex, time consuming and have the PUB tackling issues not be in play for some time.

“With respect to the fifth (issue) proposed by Newfoundland Power, regarding the potential review of measures to ensure reliability after commissioning of Muskrat Falls and the Labrador-Island Link, we believe that matter is beyond the appropriate scope of this review,” said lawyer David MacDougall, speaking on behalf of Newfoundland and Labrador Hydro.

Time is a consideration, according to the island’s industrial customers — including Corner Brook Pulp and Paper and Teck Resources — who had a representative on hand to say there is a need to come to conclusions quickly on issues of an immediate nature, allowing time for the utilities to take action on any PUB directives before the next winter season.

“What we would like to do is look at what caused the issues that we had during the outages that we experienced at the beginning of January, fully understand those and explain those to the public and learn from it, see how we can improve,” said Rob Henderson, vice-president of Newfoundland and Labrador Hydro, speaking to reporters.

He acknowledged any broadening of the review to include a look at power supply with Muskrat Falls online will require additional presentations and the participation of other subsidiaries of Nalcor Energy. Hydro has control over existing power generation assets including the Holyrood power plant, but has no ability to speak authoritatively on decision-making around Muskrat Falls power, the Labrador-Island Link or the Maritime Link.

 

Presenters want broad scope

For his part, businessman and blogger Des Sullivan, who has long been engaged in the debate around the Muskrat Falls project, expressed a sense of difficulty in understanding how the PUB could look at system reliability without getting into discussion of the province’s $7.7-billion elephant in the room.

“The question of security and reliability in relation to the risks associated with a long-distance transmission line from Muskrat Falls to the Avalon Peninsula has a direct bearing on any planning decision regarding Holyrood,” Sullivan said, also saying reliability of the power system extends beyond the topic of Holyrood.

“Does Nalcor have a back-up plan if the Labrador-Island Link goes down? I think that’s a fundamental question that requires the deliberation of the PUB in the coming weeks,” he said.

And reliability - of the utilities and their decision-making, as much as their equipment - was identified as a topic for consideration.

“We have a prevailing environment of uncertainty here which needs to be dealt with,” Sullivan said.

Presenters Ron Penney and David Vardy — a former deputy minister of justice and former PUB chairman respectively — were of like mind, with Penney calling Hydro’s position on the scope of the review very disappointing.

“We believe the Board needs to re-visit the discussion of transmission line reliability that occurred during the Muskrat Falls reference hearing,” Vardy said.

As an intervenor, former MHA Danny Dumaresque has reserved the right to ask questions of presenters once the PUB has decided on what will be covered and main hearings for the review begin.

He told The Telegram he wants, in the process of the review hearings, to get more information on the planning and decision-making around the Muskrat Falls project.

And if the PUB rules it out of bounds?

“Of course it will be a major disappointment. It will be, I believe, a rejection of the demands by the people because, except for Newfoundland (and Labrador) Hydro this morning, there was nobody else in this room that thought we should stop the inquiry and investigation at the blackout and the leading up to the commissioning of Muskrat Falls,” he said.

Other presenters included: lawyer Keith Morgan on behalf of Nu-Quest Distribution; Curtis Mercer and Jack Parsons for K&P Contracting and Heat Seal Limited; Cabot Martin and both Peter Miles and Bernard Coffey on behalf of the provincial Liberals. Written submissions were also accepted, including one from the provincial NDP.

The written submissions and transcripts will be posted online at: pub.nf.ca. Future hearings, yet to be scheduled, will be webcast live at the same site.

"The Board will use no information in making its determinations that the public does not have access to," Wells promised.

He said the PUB will provide more information on what will be included in its power review in the next seven to 10 days.

“Its got to be recognized that there’s some complexity to trying to scope out what an inquiry like this is going to be looking at,” said Consumer Advocate Thomas Johnson, who suggested the PUB may need to begin to venture beyond the immediate.

“You’re getting a clear signal from the Board that they’re probably going to be looking at phasing, so the first thing’s first in terms of looking at the immediate concerns, the immediate winter period,” he said. “That makes perfectly good sense, particularly in light of the most recent events.”

Meanwhile the provincial government continues to consider the scope of its own power system review. Further information on that review is expected by Feb. 20.

 

afitzpatrick@thetelegram.com

Organizations: Newfoundland Power, Nu-Quest Distribution, Newfoundland and Labrador Hydro Liberty Consulting Group

Geographic location: Muskrat Falls, Newfoundland, Holyrood Nova Scotia

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Recent comments

  • Corporate Psycho
    February 06, 2014 - 20:50

    What is NL Hydro worried about?

  • Winston Adams
    February 06, 2014 - 10:29

    Why is this story online under the Business section, and not the local News section? Is this not of prime interest to all, not just business? I seldom click the Business section, although I own a business. This should be NEWS.

  • WInston Adams
    February 06, 2014 - 09:51

    I read all the transcripts that are online. The power companies representatives and the consumer advocate are all lawyers, billing for time at 150 dollars per hour or more, all paid for by the average homeowner through their power bills. And the PUB has two lawyers there, I guess who are staff. This inquiry will benefit the presenters lawyers to the tens of thousands of dollars. This failure is largely an engineering failure, whether through issues of reliability, maintenance, poor efficiency/conservation measures, or poor planning or forecasting, or money spent on Muskrat and neglect of our island assets. Interesting that no engineer spoke to these issues. The engineering failures are being filtered and screened by the legal minds, part to deflect blame and protect the guilty. Nfld Hydro frame thier issues with this in mind. Example, they say one of the issues is "would a third transmission line to the Avalon have prevented the blackout and rotating outages" The CEO of Nalcor , Ed Martin, has stated that a third line would have made no difference. It is likely that a third line would not have "prevented" the blackout, but would certainly have made a difference in length and severity of the outages and therefore the suffering of our citizens from the cold, damages and inconvenience. Other presenters have suggested this would have made a difference. Yet Nfld Hydro now attempts to protect the integrity of the CEO who obviously was untruthful when he said a third line would have made no difference. Likewise, would more wind generators in service have made a difference? Certainly they would. About 2 percent of our energy is wind. Manitoba Hydro has said technically we can handle 10 and up to 15 percent. Other consultants would likely indicate more that that. The power companies will make a lot of these arguments as legal discussions to help avoid shining the light on their own engineering deficiencies.