Hydro V-P says capital budget about reliability

Ashley Fitzpatrick afitzpatrick@thetelegram.com
Published on August 22, 2013

Newfoundland and Labrador Hydro is getting ready for questions — from industrial power customers, the consumer advocate, members of the public and the Public Utilities Board (PUB) — on its proposed capital budget for 2014.

The utility wants to spend $98.7 million on maintenance, equipment and new construction projects during the coming year.

The work is detailed in more than 2,000 pages of documentation filed earlier this month with the PUB.

“We don’t want to be doing something unless it’s absolutely required,” said Hydro vice-president Rob Henderson, in an interview with The Telegram Wednesday.

The PUB will decide this fall if the utility’s decisions on what is absolutely required are reasonable.

Spending is spread across Hydro’s assets, from power poles to safety gear to equipment at large power stations like Bay d’Espoir and Holyrood.

“Holyrood is an old facility in terms of it’s over 40 years old,” Henderson said, noting it has moved beyond the lifespan of a typical thermal power plant.

“We look at it to make sure the plant is running reliably into the future, up to the point that the Muskrat Falls power becomes available to the system.”

The plant will be kept on standby into the 2020s, he said, to allow for any hiccups in the new assets associated with the Lower Churchill.

Spending on proposed work at Holyrood is separate from the multibillion-dollar budget for the Muskrat Falls project.

“It’s important to note that plant is going to be expected to run as hard as it has in the past in the next few years because we’ve got significant load growth between now and Muskrat Falls coming into service. So that plant’s demand will be up,” Henderson said.

The capital budget includes projects at the more than 20 diesel-powered remote systems on the island and in Labrador. This includes replacement of a diesel generator at Mary’s Harbour and the upgrade of a unit at Port Hope Simpson, exchanging a 455kW unit for a unit with a 725kW capacity.

An automatic fire suppression system will be installed in the diesel plant in Nain. The Hopedale plant will get upgrades as well.

For $823,000, the utility will overhaul seven diesel engines in 2014, in facilities on the Labrador coast and in Francois and McCallum.

Henderson was asked if this should be taken as a sign options for alternative power supplies like wind, small hydro and solar have been abandoned for the isolated systems.

“No. Absolutely not,” he said.

“We’re constantly looking at other alternatives. We’ve got studies underway that are looking at options for alternative energy sources for the coast of Labrador. These decisions to go where we are right now, is to meet that short-term demand.”

Hydro has to be able to deal with Vale’s new processing plant at Long Harbour coming online, in addition to expanding residential and commercial loads on the Avalon Peninsula.

Henderson confirmed the PUB will be presented with a separate application later this year regarding a significant new piece of transmission infrastructure — estimated at $268 million over five years — for a new line between the Bay d’Espoir and the Western Avalon.

There will also be an application to add a gas turbine at Holyrood.

Hydro also has a multi-year general rate application before the PUB. That application, requesting a rate decrease for most Hydro customers, is subject to a separate review.


Where N.L. Hydro plans to invest money

Not all of Newfoundland and Labrador Hydro’s capital spending for the year will be on power poles, or at the Holyrood or Bay d’Espoir power stations.

Within the documents filed by Hydro with the Public Utilities Board, The Telegram found several interesting projects proposed for the coming year. All have yet to be approved by the regulator.

* The Paradise River dam

Hurricane Igor damaged infrastructure around the province, including at the eight-megawatt Paradise River hydro station on the Burin Peninsula. Of greater concern there, was how high water levels reached during the storm. Heavy rain resulted in overtopping the site’s concrete arch and water ran to within 0.4 metres of the top of a six-metre high earth fill dyke at the reservoir.

Hydro wants to raise the height of the earth fill embankment by 0.6 metres, as recommended by engineers, in consideration of future storms.

If approved, the construction is expected to cost about $100,000 and be undertaken in August 2014.

The road to Cat Arm

The drive to the relatively isolated, 127-megawatt Cat Arm hydro plant runs along the shore, off Route 420 near Jackson’s Arm, on the Northern Peninsula. “An 80 metre section of this road near the powerhouse at Devil’s Cove is seriously deteriorated and requires upgrading,” Hydro states.

The solution proposed is to upgrade armour stone and add more rock fill between the road and the water, to protect against erosion that will otherwise threaten the drive.

The work will have to go through environmental assessment and is expected to cost $764,000 over two years.

* Holyrood elevators

This is admittedly a part of the proposed spending on the Holyrood Thermal Generating Station, but Hydro says two elevators at Holyrood are not in proper working order and cannot be relied upon in an emergency.

More specifically, “both elevators have seen an increase in downtime and have stalled when travelling between floors while transporting Hydro personnel or contractors. While there were no reports of physical harm in these incidents, there is a risk of severe injury or loss of life.”

It wants an overhaul of the elevators, at an estimated cost of $533,000 in 2014.

* Stephenville plant upgrades

The gas turbine power plant at Stephenville is more than 38 years old. While not used much for power generation, it is a power backup and synchronous condenser for the island power system.

“In recent years it has experienced sudden failures to major pieces of equipment and one failure resulted in a 10 month forced (site) outage,” Hydro stated in its budget application.

Upgrading the site will require about $3 million in 2014, but a three-year program for refurbishment is said to give the plant 15 more years of life.