Hydro applies for more spending

Ashley Fitzpatrick
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Third line from Bay d’Espoir latest in capital projects outside of Muskrat Falls financing

As of this morning, the Board of Commissioners of Public Utilities (PUB) has a proposal in front of it for another major capital spend on the part of Newfoundland and Labrador Hydro.

The latest request from Hydro to the PUB is for the approval of construction of a new, third power line between the Bay d’Espoir area and the power hungry Avalon Peninsula.

The estimated cost for the power line is $291.7 million. Hydro has suggested the line, if approved, would be in service for 2018.

The line had previously been put before the PUB, but was taken off the table, with Hydro stating the focus at the time would have to be getting the proposed Muskrat Falls hydroelectric project through final approvals. Hydro noted it would need the new power corridor from Bay d’Espoir to the Western Avalon only as Muskrat Falls power comes online.

It has been suggested the new corridor could be used in funneling backup power from Nova Scotia to the Avalon Peninsula, should there be a failure in the line feeding power from Muskrat Falls to the provincial capital and surrounding communities.

As previously reported, the PUB is already in the midst of considering a rushed review of a proposed $119-million spend for a new fuel-burning power generator to be placed beside the Holyrood power plant before the coming winter.

In comparison to the proposed expenditures on the new generator and now the line from Bay d’Espoir, Hydro’s capital budget for 2014 is $98 million.

The cost of acquiring the new generator is predicted to cause a 2.3 per cent increase in power rates. There has been no similar prediction for the added impact of the line from Bay d’Espoir, though costs for the unprecedented builds for Hydro are only to be applied as the generator and then the line come into service.

In a recent interview, Hydro president Ed Martin noted there will be some staggering in terms of impact on ratepayers in that regard, since the new turbine is expected to be in place and operating this December, while the new line from Bay d’Espoir will come four years down the road.

“Upgrading this vital corridor between the Bay d’Espoir and Western Avalon Terminal Stations is essential in terms of providing additional capacity, relieving congestion and enhancing the resiliency of the current transmission network,” said Rob Henderson, vice-president of Newfoundland and Labrador Hydro, in a statement issued on filing the application for the line.

“We are moving forward with strategic and major capital investments to modernize our assets, build a robust electricity grid and to ensure Hydro provides the best possible service to our customers over the long term,” he said.  

“The next five years will see a major transformation of the province’s electrical system.”

In addition to these projects, Hydro is significantly increasing its planned annual capital spending and building a new power line from Churchill Falls to Labrador West — all costs to be recovered through ratepayers with the expectation of rate hikes.

Organizations: Western Avalon Terminal Stations, Newfoundland and Labrador Hydro

Geographic location: Muskrat, Nova Scotia, Holyrood Labrador West

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