Hydro preparing for future needs

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I am writing in response to Russell Wangersky’s column on Sept. 1, “Muskrat Falls will eventually be our only option.”

Mr. Wangersky implies that Newfoundland and Labrador Hydro is not adequately planning to address our province’s current and future electricity needs.

This is inaccurate and misleading to the people of this province. On the contrary, Hydro has been engaged in comprehensive, long-term planning for many years and our focus on future planning is driven by our commitment to provide a safe, reliable and least-cost supply of power to our customers.

Our provincial electricity system is aging, with much of this infrastructure built in the 1960s and ’70s at a time when electricity use in the province was rapidly increasing.

With some of this key infrastructure reaching the end of its useful service life, strategic long-term planning and capital investments are essential to continue providing a secure power supply.

Investments in the electricity system are made in a strategic manner following our annual, five-year and 20-year capital plans. These plans facilitate long-term planning to ensure a continued supply of safe, reliable electricity well into the future.

Our planning follows internationally accepted best practices for generation and transmission infrastructure, which determines the timing of replacements and upgrades.

Hydro’s five and 20-year capital plans are reviewed and updated annually as new information becomes available regarding our infrastructure

and future load demands. What Mr. Wangersky’s column failed to recognize is that these strategies are about doing the right work, at the right time, for the right reasons.

Through our ongoing planning process Hydro continually evaluates the condition of the electricity assets. This determines the right time to replace assets to maintain their reliability and keep operating costs down.

The gas generators at Hardwoods and Stephenville are examples where our engineers decided that replacement of these units was not necessary at their normal end of life based on an assessment of their condition, supply of parts and manufacturer support.  

In the past five years, Hydro has invested more than $300 million in our provincial electricity system and we expect to invest an additional $75 million annually for the next 20 years to maintain electricity assets across the province.

These are significant investments driven by a requirement to upgrade, repair and replace aging components of the province’s electricity infrastructure, as well as needed additions in generation and transmission infrastructure to meet future electricity demand and load growth.

These investments are usually independent of decisions on future generation supply options such as Muskrat Falls.

However, where they are affected by future generation supply options, care is taken that both a reliable, low-cost supply is maintained in the short term and the longer-term costs of supply options, including Muskrat Falls, are not significantly impacted by these short-term decisions.  

Our long-term supply planning and investments are driven by evaluating all available options to ensure we have safe, reliable generation and transmission infrastructure in place to continue providing least-cost, reliable electricity to Newfoundlanders and Labradorians. This evaluation includes the possibility that the hydroelectric facility at Muskrat Falls will soon be sanctioned.

Are all of our eggs in one Muskrat Falls basket, as Mr. Wangersky suggests?

No.

But as the largest power utility and the primary generator of power in the province, it would be reckless to dismiss the possibility of such a significant energy resource when planning for our province’s future electricity demands.

People expect their electricity system to be reliable now, and in 10 and 20 years from now.

Hydro is committed to delivering exceptional service to our customers and taking carefully planned, prudent actions to make sure that the lights come on and remain on when consumers want it.

The hard-working people at Hydro have done considerable work to ensure we provide Newfoundlanders and Labradorians with safe, reliable power in an affordable and environmentally sustainable way, today and in the future, and will continue this work for the long-term benefit of our customers.

Jim Haynes is vice-president, regulated

operations, with Newfoundland and

Labrador Hydro.

Organizations: Newfoundland and Labrador Hydro

Geographic location: Stephenville

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Recent comments

  • Cyril Rogers
    September 12, 2012 - 09:09

    The problem with NL Hydro, as I see it, is that they now have two masters, NALCOR and government, dictating their agenda and therefore likely to be derailed in terms of their real mandate. It is obvious that the government is the pilot and NALCOR the co-pilot while poor old NL Hydro is a mere flight attendant. That is not meant to be a slight on flight attendants, by the way, but Hydro can't even change the bathroom configuration of its buildings without seeking the approval of the PUB. In defence of Hydro, I do believe they have good people working there....my concern is that they are being stymied by big brother.

  • Winston Adams
    September 12, 2012 - 08:28

    Jim, it is generally accepted elsewhere that the lowest cost of energy going forward is from energy efficiency. It's in the range of 1/3 the cost of new generation plants of any kind, so probably 1/4 the cost of expensive Muskrat falls. Efficicnt heating here has the potential to rollback 600 MW of demand, with 400 practical when staged over 8 or 10 years. This would allow 2 decades or more before demand again becones a problem. Of course, you are not mandated to follow this method, although the government has signed on to 20 percent reduction by 2020 as part of the Efficiency action plan, But there is no yearly targets, and you plan only 2/10 of 1 percent saving from energy efficiency per year. And of course you do NOT USE best methods for forecasting demand as to end-use methods, to verify efficiency saving means. Example , compact lights and efficient fridges save energy in our climate only during the 2 months of summer. In winter , spring and fall their lower energy use means the electric baseboard heaters must stay on longer to compensate. So Take Charge program misleads to suggest otherwise.

  • Cold Future
    September 12, 2012 - 08:05

    Good article. However the mention of the money losing giveaway at Muskrat which will come on the backs of consumers in this province to subsidize sales of power into the mainland takes away from all of the good sound planning mentioned. Get the Muskrat off the table. Consumers here cannot afford to subsidize rates for our mainland friends, some cannot even afford to pay the present rates.

  • Cold Future
    September 12, 2012 - 08:05

    Good article. However the mention of the money losing giveaway at Muskrat which will come on the backs of consumers in this province to subsidize sales of power into the mainland takes away from all of the good sound planning mentioned. Get the Muskrat off the table. Consumers here cannot afford to subsidize rates for our mainland friends, some cannot even afford to pay the present rates.

  • W Bagg
    September 12, 2012 - 07:32

    I'm sick of hearing the current administration and now publically owned corps keep pulling out the aging infrastructure excuse. First off, we are flush with cash, lots of it, money is no excuse, the current govt has been around for almost a decade, time cannot be an excuse anymore. If this is still being used as an excuse, then the planning within govt and these publically owned corps is deficient. As soon as the money became available, the planning should have been done already, so this aging infrastructure should have had been replaced and the maintenance started about 5 years ago. Stop blaming the past, and start taking accountability. This appears to be the new fad. At some point you, you'll have to do something. The current admin has done 3 things by my account, settle the doctors dispute, bring in secrecy bills, and try to ram MF thru. Nothing else, certainly not constructive stuff anyway.

  • incredible
    September 12, 2012 - 07:00

    Mr Haynes has a good message, which I am sure most of it is true. However, when it comes to looking at all options Hydro have failed, which is why we are still waiting on the government to release the reports on alternatives such as LNG and Grand Banks gas. If the folks at hydro had followed their own gated management process they would have looked at all options back in 2007 prior to the DG1 decision, and definetly prior to DG2 in the fall 2010. The ommissions on their part have delayed the decision to sanction MF. They tried to blame the indecision of the PUB, but the work was not done. But more importantly we have 400 million committed on Muskrat Falls, when there has been no definitive study to establish that it is the lowest cost. I do not believe this is the fault of Hydro / Nalcor. It is the dream of a number of politicians which have driven this option, without consideration of the final rates which will have to be born by the people of the province. It is a scandal what has happened, and I am sure it will be the subject of a royal commission someday in the future. Engineering and Politics do not integrate well. If I worked at Nalcor I would be maintaining my cover your b$t file.