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N.L. Hydro proposes $206.2-M capital budget in 2018

Projects within Newfoundland and Labrador Hydro’s annual capital budgets will maintain the Holyrood Thermal Generating Station and ultimately transform it from a main power-production facility to a system supporter.
Projects within Newfoundland and Labrador Hydro’s annual capital budgets will maintain the Holyrood Thermal Generating Station and ultimately transform it from a main power-production facility to a system supporter.

The capital spending at Newfoundland and Labrador Hydro — on everything from generator repairs to new vehicle purchases — passes through an annual approval process at the Public Utilities Board (PUB).

Spending is watched closely, as utility costs get factored into power rates. More money spent on maintenance and upgrades leads to more being requested from ratepayers. At the same time, capital work is required to maintain service and reliability.

For 2018, Hydro has proposed $206.2 million in spending. It’s not a historic high.

It covers 68 new projects, plus cash requirements for already-approved, multi-year projects. The list includes, but is not limited to: maintenance work at the Holyrood power plant; upgrades for isolated diesel-power plants on the Labrador coast; and a transmission connection between terminal stations at Muskrat Falls and Happy Valley-Goose Bay.

The PUB is reviewing the plans.

 

Shifting budgets

The capital budget in recent years has generally run higher than in the early 2010s and prior to that. In 2011, as reported at the time, there were objections filed with the PUB from the consumer advocate and various industrial power users based on forecasted increases in capital spending by Hydro, expected to reach roughly $150 million in 2014-15.

This spending is, after all, separate from direct spending on the Muskrat Falls project, with costs there also set to hit ratepayers.

At the time, the PUB stated it was concerned with what it would mean for power rates.

The latest five-year forecast suggests Hydro’s capital program is at least not set to continue to rise.

“The total investment of capital in transmission and rural operations facilities will begin to see a reduction in expenditures after 2018, primarily as a result of the completion of major transmission projects, including the upgrade of the transmission line corridor between Bay d’Espoir and Western Avalon, the installation of the transmission line between Soldiers Pond and Hardwoods, and the proposed 2018 project for interconnection between Muskrat Falls and Happy Valley,” the submission states.

By 2020-21, the province’s power system — the Hydro infrastructure — will be expected to make the switch from a large amount of diesel-fuel power from Holyrood during peak demand to mainly hydroelectric power.

Hydro delivers power directly to industrial, utility and household customers in Newfoundland and Labrador, while also acting as the main supplier for Newfoundland Power.

 

afitzpatrick@thetelegram.com

 

 

Newfoundland and Labrador Hydro annual capital budgets

• 2013 — $84.8m (actual)

• 2014 — $204.7m (actual) 

• 2015 — $125.1m (actual)

• 2016 — $203.9m (actual)

• 2017 — $271.3m

• 2018 — $206.2m

• 2019 — $146.7m

• 2020 — $165m

• 2021 — $143.3m

• 2022 — $147.7m

(Source: Newfoundland and Labrador Hydro 2018 Capital Budget Application; nlhydro.com)

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