Jerome Kennedy (left), minister of Natural Resources and Gilbert Bennett, Nalcor's vice-president of the Lower Churchill Project, speak to reporters at Confederation Building. — Photo by Keith Gosse/The Telegram
Provincial Natural Resources Minister Jerome Kennedy has been repeating the question for months: “Do we need the power?”
The question is in relation to the $7.4-billion Muskrat Falls hydro project and, on Wednesday, his department and Nalcor Energy offered up an answer on paper.
According to the forecast for power need, a block of power once being sent to the province’s paper mills has been freed up, and there are fewer people living here.
On the other hand, those who are living here are demanding more power than ever before and quickly eating away at the power available.
“We have had 28,800 new houses constructed between 2002 and 2011, with 86 per cent of them using electric heat,” Kennedy told reporters during an afternoon news conference at the House of Assembly. The paper stated 85 per cent.
“Since 2006, we’ve averaged over 3,000 homes a year with the maximum of 3,600 in 2010.”
Industrial demand has gone down, but “we have more homes, we have less people in the homes, we have bigger homes, we have younger families and we have more electric space heating,” Kennedy said.
The latest forecast is predicting a need for more power on the island as early as 2015, noted Nalcor vice-president and Lower Churchill lead Gilbert Bennett.
He said new turbine generators will be used to avoid outages and bridge any gaps between the island’s power demand and supply before Muskrat Falls and the Labrador-island link come online.
Bills and demand
The release of the demand forecast follows on the heels of predictions on what power bills will be with and without Muskrat Falls.
The power bill numbers are dependent on the island using, in total, 40 per cent of the power being produced by the dam at Muskrat Falls.
Opposition parties had suggested power bills could run higher than projected, if the forecasted demand for power falls short of what is actually used.
Bennett said bills could go slightly higher, but would not reach the level of what people might see if Muskrat Falls was not built.
He added Nalcor’s forecasts have been conservative on demand, so as not to overproject and suggest a need for power if no such need exists.
Bennett’s claim on the forecast was confirmed in the latest review of the project by Manitoba Hydro International (MHI). MHI stated the predictions might be low, considering the fact the forecast assumes no new industrial customers to 2029, outside of Vale with its processing facility at Long Harbour.
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In a filing with the Public Utilities Board (PUB) related to its proposal for a general rate increase — still before the regulator — Newfoundland Power stated it has had more than 17,000 participants in energy conservation programs since 2009.
“General customer interest in conservation has also increased in this period. Visits to the takeCHARGE! website increased by almost 50 per cent,” reads the filing.
Both Kennedy and Bennett said a push on energy conservation measures, demand management, would not be enough to deal with the demand the province is facing.
“But conservation, demand management, I think can be ... an important tool I think and, (Nalcor CEO) Ed (Martin) spoke about this yesterday, it’s something we certainly encourage. But it’s not going to be, as it was put forward in the past, a way to solve the energy deficit which we’re going to face,” Kennedy said.
Bennett said conservation measures were included in the demand forecast.
Opposition members challenged the conclusions on conservation.
“It doesn’t seem like there has been any measures to take (conservation) into account,” said Liberal MHA Andrew Parsons.
“We’ve got some numbers to consider, but certainly one of the most important ingredients in this demand forecast — you have to ask the question about conservation. We haven’t seen anything about any conservation programming or anything that could affect the need for Muskrat Falls,” said NDP MHA George Murphy.
Murphy spoke about considering “aggressive” measures, suggesting it might be a better option, if paired with wind power or small hydro.
Aggressive conservation measures would require significant spending on incentivizing conservation, or legislation, having the consequence of potentially driving up costs for homeowners on new homes, or with required renovations.