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Russell Wangersky: Clock ticking for Holyrood… or not?

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.

This year, 2017, right now, was supposed to be the one — the year that the Holyrood Generating Station was supposed to be taken out of full-time service, and only used for backup power for five years or so.

At least, that’s what Nalcor’s original plan said, the one that promised we’d have Muskrat Falls power by 2016, not by the 2021 or so when power’s expected now. If the Holyrood plant was to keep going, Nalcor claimed, it would need a $20-million a year, five-year restoration project.

With the current delays, the plant’s going to be in operation for five more years than was expected, while we buy oil to power it and repair its inevitable issues, while, at the same time, Muskrat Falls runs up ever-more interest debt during construction.

Shutting Holyrood, you have to remember, was always a key selling point — getting rid of the pollution of burning oil, getting rid of the cost of fuel, getting rid of the need for an extensive cleanup costs needed to meet possible new air pollution standards.

So why talk about this now?

Well, because, reading the tea leaves, some of the province’s biggest electrical users aren’t only concerned about Muskrat Falls failing to meet even its new schedule, but also about whether Newfoundland and Labrador Hydro is going to keep putting money and fuel into Holyrood to keep it operating well into the future.

That concern is raised in questions posed by the province’s major industrial power customers in response to Hydro’s 2018 capital program, a behemoth of $206.2 million worth of work the utility wants to do next year.

Six of the industrial customers’ 11 questions are about Holyrood — specifically, asking for a commitment that the facility is closing. (In those questions, “base loading” means operating the plan to generate power as an integral part of the generating system.)

“Please confirm that based on Hydro’s most recent information and assessments, the forecast use of the Holyrood Plant (Units 1, 2 and/or 3) for some base loading is expected to end by no later than June 2021, or if it is expected to continue to be used for forecast base loading purposes, post 2021, please provide the projected levels of base loading of the Holyrood plant for 2022 and subsequent years,” the industrial customers ask.

“If the Holyrood plant is expected to continue to have a base loading function - from 2022 onwards, has Hydro, in its Capital Plan, taken fully into account the capital projects necessary or prudent to maintain that function from 2022 onwards? If not, what are the capital projects that can be foreseeably expected to be necessary or prudent to maintain Holyrood’s base loading function from 2022 onwards?”

“If the Holyrood plant is expected to continue to take delivery of fuel, for power production purposes (excluding the 100 MW gas turbine deliveries) from 2022 onwards, has Hydro, in its Capital Plan, taken fully into account the capital projects necessary or prudent to take, store and handle such deliveries from 2022 onwards? If not, what are the capital projects that can be foreseeably expected to be necessary or prudent to maintain Holyrood’s ability to take, store and handle such deliveries from 2022 onwards?”

One thing’s for sure: the industrial customer group clearly wants Newfoundland and Labrador Hydro firmly on the record about its future plans. And the answers will be fascinating.

The biggest single savings from building Muskrat Falls was supposed to be shutting down an expensive, aging Holyrood station.

Just imagine if we end up both paying for Muskrat, and continuing Holyrood for some indefinite period as well. It really doesn’t bear thinking about.

 

Russell Wangersky’s column appears in 35 SaltWire newspapers and websites in Atlantic Canada. He can be reached at rwanger@thetelegram.com — Twitter: @wangersky.

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