It goes without saying that this province’s Public Utilities Board is a trifle cautious.
It’s meant to be.
The board is supposed to methodically examine the investments and dangers of utility practices. They’re meant to operate as a devil’s advocate. It’s an exchange for utilities getting set rates of return on their investment — essentially, guaranteeing their income.
And that’s why, when the provincial government, all those years ago, referred the Muskrat Falls project to the board for review, the government was careful to ensure that the review was hemmed in with all sorts of caveats. The board could look at only two options. The board could only look at early estimates. The board had limited time. And the list goes on. (That’s also why, in the end, the board said it could not give a definitive decision on whether Muskrat Falls was the best choice.)
That’s also why the legislation setting up Nalcor Energy specifically exempted the company from review by the PUB, with the law saying, “The corporation is not a utility as defined by the Public Utilities Act and that Act does not apply to the corporation.”
In recent months, the board has been marching along at its usual methodical pace, examining everything from when and whether Muskrat Falls will be able to deliver dependable power, to looking at ways to reduce the massive impact on electrical consumers.
Not only does slow and steady win the race, it also sometimes can prevent major investment mis-steps by starry-eyed politicians, if it’s allowed to.
And that’s why it’s worth watching not only what the PUB decides, but what evidence it is looking for.
And this week, it made an unusual request of Newfoundland and Labrador Hydro.
It asked the utility about ongoing problems with the Labrador-Island Link (LIL), the power line that is supposed to bring power to the Avalon. The LIL has been hugely delayed by the fact that contractors have not been able to develop working software to run the powerline.
More precisely, in a letter dated Oct. 22, the PUB required Hydro to provide “an assessment of system reliability with respect to alternate scenarios for LIL availability, including no availability and varying Holyrood Thermal Generating Station availability in the 2021 to 2023 timeframe.” The PUB also said that the assessment is of “an urgent nature.”
The board doesn’t ask questions or require public utilities to provide sworn evidence on a lark.
To break that down a little: the PUB isn’t asking Hydro to explain what it will do if the LIL has intermittent software issues during the next two to three years (something that Nalcor boss Stan Marshall has already testified is likely, given the ongoing software development delays).
The board is asking for Hydro to explain what it will do to guarantee the supply of power if the LIL isn’t available at all until 2023. Not partial availability — no availability.
The much-delayed LIL was supposed to be in service (after the latest delay) in July 2020.
The board has also asked Hydro to take into account the “varying availability” of the aging Holyrood power plant to take up the slack if the LIL isn’t available.
And the PUB has given Hydro only until Nov. 15 to provide that assessment.
Keep in mind: a consultant to the PUB has already testified in board hearings that, when it comes to the LIL’s operation, “we’ve lost confidence in the ability to have faith in a firm date. There have just been too many, too many misses. The problems are still pretty substantial.”
To repeat: the board doesn’t ask questions or require public utilities to provide sworn evidence on a lark. And in regulator-speak, these questions are just about as pointed as the PUB gets.
It may be an overabundance of caution on the PUB’s part, making sure to cover every single possible base.
But I doubt it.
Russell Wangersky’s column appears in SaltWire publications across Atlantic Canada. He can be reached at email@example.com — Twitter: @wangersky
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