Sugar-coated

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Sometimes, diplomacy is a gentle little dance — it’s especially so when you’re dealing with friends, neighbours or even family members. How do you explain, for example, that you don’t agree at all with your spouse’s plans for your family vacation?

You have to tread lightly, mind your words — in fact, choose those words carefully to prevent the possibility of long-term bruised feelings.

The same might be true if you are operating a business that’s hopelessly intertwined with another. What if you’re a retailer who has issues with your sole supplier, but you’re also a retailer who knows you will be dealing with that sole supplier for a long time into the future?

You’d be pretty careful about how you explained those issues publicly; you’d certainly be circumspect.

So let’s have a quick look at Newfoundland Power’s circumspect and precise report on Blackout 2014, and where the province’s electrical system is heading, from a report they filed with the Public Utilities Board on March 24.

“… the series of major system disruptions which occurred on the island interconnected system in January 2014 raise potential questions concerning the adequacy of protection and control at the bulk system level. Protection and control systems are intended to operate in a way that isolates defective or malfunctioning electrical equipment and prevents widespread system impacts. The series of major system disruptions during January 2-8, 2014 suggest that protection and control systems may not have operated as they should.

“Over the longer-term, different considerations will apply. The proposed decommissioning of Holyrood generation is a central consideration. Holyrood is the key generating station on the eastern part of the island interconnected system. The eastern part of the system is also the location of the largest and fastest growing loads.

“Following the commissioning of the Labrador in-feed and the Maritime link, virtually all of the key generating resources serving the island interconnected system are proposed to be located outside the eastern part of the system.

“It is not clear how long-term reliability and security of power supply will be maintained at that time. Greater backup generating capacity on the eastern part of the island interconnected system would have likely reduced the electrical system and customer distress experienced in January 2014. Whether increasing backup generating capacity on the eastern part of the island interconnected system will be necessary to ensure long-term reliability and security of power supply is also a key consideration.”

Another polite point from the report?

“Nalcor planning decisions which could clearly impact reliability on the island interconnected system may need to be revisited.”

Now, we don’t have to be as polite as Newfoundland Power. What the company is saying, minus the sweet frosting of politeness and deference for their partner in the electrical business, is that they’re not sure how the system can be expected to be reliable when power has to come from such great distances without any backup.

A company with years of experience supplying power on this island is essentially saying the Labrador line isn’t good enough, and power security for a large number of people might depend on new generation sources on the Avalon.

And that is a whole different picture than the one Nalcor and the provincial government have been selling.

Organizations: Newfoundland Power, Public Utilities Board

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  • Maggy Carter
    April 10, 2014 - 09:32

    NALCOR’s plan to decommission Holyrood by 2020 was a major plank in its business case for Muskrat Falls in July, 2011. NALCOR needed to convince the PUB and the public of the reliability of that assumption. Without it, the projected cost of the Isolated Island option would have increased by one billion dollars or more. Without it, NALCOR could not have argued that the Muskrat/Labrador intertie was the least cost option. It is almost certain that Holyrood’s generating plant will not be dismantled – it will be modernized. As NL Dark demonstrated, the large, heavily concentrated population of the Avalon Peninsula is extremely vulnerable to any extended power interruption. What amounts to a 1200 kilometre extension cord from Muskrat Falls, increases that risk exponentially. Climatic extremes, harsh isolated terrain, and the prospect of iceberg scour all pose dangers to that line. But the risks go well beyond the loss of the Island infeed. NALCOR has exposed Newfoundland taxpayers to major financial consequences in the event of its failure to deliver power to Nova Scotia under the terms of its contract with EMERA. The risk of interruption is inherently greater in the dead of winter when other sources of supply are also under heavy demand. The cost of spot market power to replace any lost generation from Muskrat could be quite high. None of these considerations are really new of course. They have been known to NALCOR and government from the get-go. The implausibility of NALCOR’s assertions to the PUB was among the reasons the province’s regulatory agency refused to give Muskrat its blessing. What is new perhaps is that NL Dark – a ‘crisis’ that led to the resignation of a premier and the near collapse of a government – has exposed Muskrat as a high risk, prohibitively expensive gambit. The question that only time can answer is how long have NALCOR and government known that maintaining and upgrading the Holyrood generating station would prove an essential element of its great power scheme.

  • Maurice E. Adams
    April 10, 2014 - 06:59

    What then will the cost implications of inadequate reliability be with respect to our legal obligations to Nova Scotia? If we can't provide the power, we have to spend billions to build more generation, provide the power from some other sources, and/or pay damages. The Muskrat dam should be scrapped, buy the cheap surplus power from HQ (until 2041), and build a tunnel and to take an upgraded transmission line.

    • a business man
      April 10, 2014 - 08:19

      Frankly, I like the fact that Newfoundland has legal obligations to Nova Scotia. I like that fact that if Newfoundland cannot provide enough power, Newfoundland will have to spend billions to build more generation, or provide an alternative source of power, and/or pay for damages. Frankly, the terms of the agreement suggest that Nova Scotia's interests are more important that Newfoundlanders. As a Newfoundlander, I agree with this. I want Nova Scotia to have cheap power, and I am okay with Newfoundland paying for it. I understand why Newfoundlanders are upset about this deal too. I would be as well if I did not have buisness interests in Nova Scotia. But since I do, I put my interests first when deciding that I am okay with Newfoundland having an obligation to provide power to Nova Scotia. I am just happy that I could vote for the Newfoundland government that is supporting my interests in Nova Scotia.

  • Corporate Psycho
    April 09, 2014 - 20:43

    We're being had for the benefit of a few special interests.