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So, how exactly is Nalcor going to try and put lipstick on this pig?

Earlier this year, the Liberty consulting group issued a report saying the January blackouts on this province’s electrical grid were cause by two things: Newfoundland Hydro’s failure to have enough generating assets online, and issues with the operation and maintenance of the transmission equipment.

To say the report was downplayed by Nalcor Energy boss Ed Martin is hardly an understatement.

Here’s what he said at the time.

“I think it’s important for everyone to be looking at it from the perspective of what has been achieved. I think our people have done a tremendous job. I came in here seven-plus years ago. The first thing I noticed was the people were fantastic, no question about that. But the second, third and fourth things I noticed at the time was somewhat troubling,” Martin told The Telegram after the release of the Liberty report. “The safety performance, to me, was unacceptable for an operation of this size. The age of the assets and the asset management processes and the work that was being poured into them for their age was not enough, not acceptable. The third thing was I could see a looming decision coming with respect to demand growing and more generation being required, and I knew we had to get down to business and make some decisions.”

Martin said the major items have since been addressed, pointing to an overwhelmingly positive change on key safety indicators, plans in the asset management room and the sanctioning of the Muskrat Falls hydroelectric project.

Now, the province’s Public Utilities Board has released its own interim report, and the document is blunt.

“The board is able to conclude at this stage that the following caused or contributed to the outages:

“‰ Hydro’s deferral of scheduled preventive maintenance and testing of key transmission system equipment, including the 2013 scheduled and recommended testing and maintenance on the transformer and circuit breaker at Sunnyside, which failed.

“•Hydro’s failure to properly execute repairs and maintenance.

“•Hydro’s failure to ensure the availability of qualified resources and vendor support.

“•Hydro’s failure to procure critical spare parts for its generation assets.

“•Hydro’s decisions on timing of generation asset repairs, notably the Hardwoods and Stephenville gas turbines.”

Even more blunt? How about: “The status of Hydro’s supply assets leading into the winter was a major contributing factor to the generation shortfall in December. Neither extreme weather nor other unusual events were significant factors in the January 2014 system events and outages,” and “The board is satisfied that Hydro’s asset management decisions contributed to the nature, extent and duration of the outages. The board has particular concerns in relation to the deferral of preventive maintenance and testing, especially given that at least two of the equipment failures in January 2014 are associated with deferred maintenance and testing.”

The PUB is clearly not looking at things “from the perspective of what has been achieved.” In fact, it’s looking at things from the perspective of what it is ordering Newfoundland Hydro to do. And it’s given the utility a lengthy, precise schedule on what it is to do and when.

It’s hard to find words to explain just how significant it is that this province’s major power generator has been put on a very short leash by its regulator.

But one thing’s for sure: it’s not the sort of thing that any utility would want to admit to any of its fellows.

Organizations: Nalcor Energy, Public Utilities Board, The Telegram

Geographic location: Stephenville

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Recent comments

  • Winston Adams
    May 20, 2014 - 10:09

    Extreme weather was the cause of the 2013 outage, salt contamination causing flashovers at Holyrood and incoming transmission lines to Holyrood. This is documented on numerous pages of Hydro report in the Appendix of the events. The contamination lasted 9 hours.Guess no one reads that. As for 2014, to say that no unusual event were significant factors..... well that is yet uncertain. Two large power transformers were damaged and the cause is yet not determined. There was acetylene gas present in the oil, which is an indicator of arcing. The transformers were only loaded to half of its rated capacity, so it was not overloaded. Arcing can be a result of recent or past accumulative damage of GISs (geomagnetic induced currents). There are a number of factors pointing to this, but it may not be conclusive. That these problems occur in about 3 years out of 11, would make it unusual but not extremely so. They not often cause transformer damage, but transformers are most vunerable, and GICs were the cause of the great blackout of the northeast USA in 1989, including Hydro Quebec. These issues were monitored as far back as the 1970s when I did outage analysis for Nfld Hydro. I am not sure if Hydro has neglected the monitoring of GICs, compared to other utilities (given we encounter perhaps the highest currents from this in North America.) . It seems premature to conclude that an unusual event did not cause or contribute to the transformer damage, and hence the outage of 2014. Are GICs unusual. Compared to wind, ice loading and salt contamination , yes. Who but a half dozen engineers in Nfld have even heard of GICs being an issue for power reliability. Unusual , yes. Proven for this damage, no. But surprising that Liberty or Hydro did not state if GICs was being assessed. They merely say the gas analysis should be further assessed. Good reason too, for Hydro to be vague. It has far reaching implications for the reliability of the Muskrat Falls transmission line. WInston Adams , Logy Bay

  • Dolf
    May 18, 2014 - 18:48

    How to put lipstick on this pig? Blunderdale and Kennedy took care of that via legislation before they jumped ship. The traitors!

  • Cashin Delaney
    May 17, 2014 - 10:04

    Vale outlined much of this deficiency, for free, to all the concerned entities, before the winter. Vale is some smart, and would never make this mistake. NALCOR is also some smart - they really have a lot of smart smart smart people- and would never make the mistakes vale is in court for. Maybe it is all stratagem? Can some explain this salutary neglect? Is it all just happy coincidence that everyone is up in every other's business but their own?

  • Cyril Rogers
    May 17, 2014 - 09:45

    It appears that the PUB finally found its voice after the departure of Danny Williams. Coincidence? I think not! Unfortunately, they did not go far enough when they refused merely to come to any conclusions about the folly that is Muskrat Falls. To be sure…they were brave to even state that they did not have sufficient information to make a decision….but they may as well have gone all the way over the cliff because the sorry spectacle that was Dark NL forced them to come out more forcefully. The whole situation calls for drastic changes at the top…and the first priority for any incoming administration should be to get rid of the NALCOR brass, at a minimum.

  • GeoffChaulk
    May 17, 2014 - 08:27

    Well, with findings like these - leaders of any corporation, especially those providing essential services to the public, would resign. If there was/is no resignation by key leaders, the board must act. To fully restore public confidence, its time to clean house at NL Hydro....

  • Maurice E. Adams
    May 17, 2014 - 07:16

    I think the PUB has made it clear that it was NOT a lack of EXISTING generation capacity, but Nalcor's failure to have our already EXISTING capacity "available" and properly maintained and online that contributed to the outages. That is also evidenced by the PUB placing having our EXISTING generation and transmission system up to scratch by Dec. 2014 as the first priority (and the acquisition of a new 100 MW generation as the last priority) as an indicator that we already had sufficient generation capacity --- if it had been properly maintained.

  • DWB
    May 17, 2014 - 05:37

    According to the provincial government, the same geniuses at Nalcor are "world class, head hunted experts". And we are trusting them to run the Muskrat Falls development???? Makes me shudder!