Comments on NB Powers Future

My name is Chris Rouse with New Clear Free Solutions. We would like to submit our fully integrated resource plan for consideration for your 2017 IRP process. We would like to be assured that this plan be presented to the government of NB as one of their choices in long term planning approval.

This is a link to our latest version of the IRP.

New Clear Free Solutions 2017 Integrated Resource Plan 

In general, renewable energy is the same or lower cost than the fossil fuel and nuclear options. Given that these options are currently less expensive or similar cost there is no need to wait or defer their implementation, and there is no need for significant long term rate increase like currently planned by NB Power. Deferring the transition will only cost more in the long and short run, and is denying NB much needed jobs. It is a false choice to ask NB Brunswicker’s if they are willing to pay more for green energy when it is less expensive.

Our plan has been misunderstood as only investing into renewables and not looking at energy efficiency and conservation. Our plan has also been misunderstood as ignoring the other sectors that make up NB emissions such as industry and Transportation. This is not true. There is $4.7 billion in our plan to be invested in these areas and was the “Dividend” column in our previous plans.  This is a fully integrated resource plan for New Brunswick and not just for the electricity sector. NB Power is responsible for both the generation of electricity as well as efficiency programs, and as such we believe the best way to invest the Carbon Tax is through our publicly owned utility for the benefit of all New Brunswicker’s.

Some of the money will be used to invest into electrode boilers which is at least a 30% efficiency gain and has huge emissions reductions and will save industry in energy costs compared to what they are currently paying. This is the only credible method for eliminating the emissions from this sector without the extensive use of biofuels. Biofuels is a limited resource and we should be conserving it and using other methods first. The increase in electricity sales will also help with NB Powers bottom line and help keep rates low and stable The approximate cost to supply all industry in NB with an electrode boiler is approximately $200 million dollars.

The money will also be used to invest in the shift to electric transportation. This has another huge efficiency gain of more than 30%. At $300,000 per electric school bus and approximately 1200 school busses, $360 million of the 4.7 billion could be used to buy all new electric school busses. There are also approximately 1200 commercial busses. An electric commercial bus is approximately $300,000 more  than a normal fossil fuel bus which we can incentivise at a cost of another $360 million. We can also use some of the revenue to incentivise the shift to electric cars and provide the infrastructure to make the shift like fast charging stations, and home charging stations.

Investing in these efficiencies have large emission reductions and benefits NB Power through increased sales and leads to lower overall energy cost for ratepayers while also maintaining low and stable rates. Investing in efficiency that reduces electricity consumption will make rates higher, choke the cash flow needed to make the transition, generally bad for business and only benefits those who get the efficiency. Also we have a very low carbon grid, already at around 75% carbon free, using less electricity has very little environmental benefits. Due to the high price of gasoline the shift in electric transportation should end up with consumers paying less overall energy cost. If we want to save money using efficiency the transportation sector is the place to do it in.

We should also use some of the money to invest in efficient government buildings that will make them more affordable. We all benefit from an efficient government. We can also offer low interest loans that can be paid back with energy savings and this should starting with low income families first. We can invest into efficiency but too much too fast creates a big problem, and it should not be the focal point of our long-term plans like the current RASD program.

We think NB Power should not be trying to change human behavior to accommodate their grid, although we do believe in education that may help integrate renewables. We object to time of use pricing as NB Power is telling me I must pay more to eat and shower at my normal times. NB Power should be focusing on demand side management technology that is transparent to the user and doesn’t require behavior changes such as are award winning Power Shift Atlantic program, which NB Power has now defunded.

There is also ample money for climate change mitigation as the effects of global warming have already begun to affect New Brunswick.

We also think that people generating their own electricity is a large issue for NB Power especially if  rates keep rising like currently planned. We suggest NB Power adopt the solar city business model for people who want to generate their own power. We also think the community power be limited as NB Power is community power. However, if there is a program most community energy projects are 70% debt financed and this source of financing should be the Carbon tax so that we all benefit.

We would like NB Power to consider all our evidence, IR’s and testimony from the EUB matter 336 as part of this submission, as we made our detailed concerns very well known to senior management during that process. We requested that the board order NB Power to have a detailed stakeholder consultation with us, but their final decision has yet to be released. We would very much welcome and request a more detailed consultation about the IRP with NB Power. Interventions are by nature confrontational and we hope that our critique is not taken personally as it is meant to help and in the public’s best interest

Both economic experts at the hearings thought that the best way to get NB Power out of the financial troubles was a large immediate rate increase because of the compounding nature of it. The carbon tax gives this large initial influx of cash recommended by them while keeping electricity rates low and stable.

We request that an option to phase nuclear out by 2030 be considered in the IRP. As stated by NB Powers own expert at the EUB hearings, the closing of Point Lepreau for any number of reasons poses a large financial risk on the Province. NB Power should be examining the potential early retirement of Lepreau. Nuclear technology has underperformed in every aspect of building and operating a generating plant and lifespan should not be overestimated either. From cost over runs, schedule delays, poor performance, increase ongoing capital cost and issues with waste and safety still not adequately addressed, NB Power has no logical reason for pursuing nuclear. It is an industry in decline and NB does not have enough money to prop up this failing industry. Given the recent bankruptcy of Toshiba there is currently not even any technology to buy. We cannot afford to be another nuclear guinea pig in NB. There is no technical need for nuclear power and we already have too much baseload. We request that geothermal be used to replace any base load requirements, as it is the same or less cost and more scalable to the size of our needs. According to the 2014 IRP we have a comparable geothermal resource to California.

As pointed out during the EUB hearings we have concerns with the fundamentals of NB Powers current business plans starting with NB Powers lack of vision, IRP methodology and concerns with the three strategic objectives and general management of our publicly owned utility. These concerns were mirrored by almost all interveners.

We also have the impression that NB Power is not properly using its strategist software and this software is largely responsible for our concerns with NB Powers three key strategies. Given the recent property tax software creating significant issues in the province we are also concerned with misunderstood software at NB Power.  We object to NB Power blindly following the directions given by this piece of software.

We request that NB Power assess return on investment and not only the lowest cost option for this IRP process. The results of the IRP are currently being misrepresented as Net Present Value which they are not. Not considering lost revenue for the RASD program is a huge problem with the current 2014 IRP. While the RASD program claims to have saved approximately $450 million over 25 years it did not consider the lost revenue from the 2TWh of efficiency that the program enabled. This is approximately $200 million per year in lost revenue every year to save $450 million over 25 years. Lost revenue puts undue pressure on rate and jeopardizes the legislated requirement of low and stable rates.

We also object to the use of 100% debt financing for the WACC in the strategist software. NB Power should be using the actual capital structure in their modeling and using 0% ROI for their equity.

If NB Power would like to optimize the Carbon Tax and Investment plan we have submitted we recommend that NB Power use a WACC of 0% in their strategist software.

We strongly object to the focus on debt repayment. Even NB Powers own economic expert agreed that debt repayment should only be done with any money that is left over. Debt repayment is the tail wagging the dog. NB Power has a legislated equity target and not a debt reduction target. There should be no focus on debt repayment. NB Powers current focus should be return on investment. Our largest financial risk in the province is the performance of Point Lepreau and debt repayment does nothing to mitigate this risk. We risk paying down a bunch of debt to build equity then losing all the equity when Lepreau has to be shut down for one reason or another or our coal plant has to be shut down. Paying down debt is essentially investing in the bad past investments that NB Power has made that are causing all the risk.

Thank you for this opportunity to submit our thoughts on NB Powers future.

Regards

Chris Rouse

New Clear Free Solutions

Nuclear Safety Engineer Has Very Serious Concerns With Point Lepreau

Sunil Nijhawan is a nuclear safety engineer with decades of experience with Candu Reactors. He developed the software that is used to assess accident progression in Candu reactors. He is also pro-nuclear, as are many of the interveners that regularly have very serious concerns with our regulator the CNSC.

His intervention identifies two very serious problems with safety devices that are meant to protect people and the environment from radiation, but do to poor designs pose significant risks to the unsuspecting public.

He points to safety relief valves that are not sized properly and as a result will allow the primary heat transport system to uncontrollably over pressurize during a station blackout. The best-case scenario this design flaw will destroy the reactor from a pressure tube failure, but the radiation is contained (Three Mile island). The worst-case scenario is the steam generators fail and there is an early containment bypass with huge releases of radiation(Chernobyl/Fukushima).

His other concern is related to the amount of Passive Auto-catalytic recombiners (PARS). These are devices that do not require power to operate and they use a catalyst to turn Hydrogen into water. These are meant to prevent hydrogen explosions like the three reactors in Fukushima. While this sounds like a great idea he has found that there are not enough of them to handle the amount of hydrogen that will be produced. The catalyst get very hot if the concentrations get too high. It has been found during testing of these devices that when exposed to too high of concentrations of hydrogen they shoot flames out of the bottom of them and will become the ignition source of the hydrogen explosion with no way of turning them off. He contends we would be safer without them.

I have a lot of concerns about every aspect of nuclear power, but the concerns brought fourth by Sunil are what keeps me awake at night. If you have the stomach for it please read his submission where he discusses step by step what will happen during a station blackout at Point Lepreau. We should all be very concerned that the safety of the province relies on NB Power keeping the power on at Lepreau.

LEPREAU Relicensing intervention submission -27 March 2017 , Sunil Nijhawan

 

 

 

 

 

 

 

 

 

 

When A Safety Limit is Exceeded Move the Safety Limit

New Clear Free Solutions Intervention NB Power Licence Renewal April 3 2017

Please see click the above link to New Clear Free Solutions intervention on the Licence Renewal for Point Lepreau.

The intervention focuses on a seismic safety limit that was exceeded and then the limit was subsequently changed so that is wasn’t exceeded. The intervention also focuses on the transparency issues.

 

 

New Clear Free Solutions Responds to Interrogatories From NB Power and Energy and Utilities Board

As part of the rate hearing process all participants get to ask questions on the evidence that we have submitted. Below are links to our responses to NB Power and Energy and Utilities Board Interrogatories (questions) on our evidence.

New Clear Free Solutions Response to NB Power Interrogatories

ncfs-response-to-nb-power-irs-on-ncfs-evidence-january-31-2017

New Clear Free Solutions Response to Energy and Utilities Board Staff

ncfs-response-to-board-staff-irs-january-31-2017

Common Sense Economics for the Public’s Utility -Nuclear Power In New Brunswick

common-sense-economicsThis powerpoint was originally made by Sharon Murphy from PEACE NB, for the Energy and Utility board’s hearings of NB Power’s request for a 2% rate hike in Jan 2017. However, the theme of the power point, that nuclear power is not economically sensible, is bigger than just the rate hearings. This presentation has been altered slightly from the original version which focused on rates. It is imperative that the New Brunswick public is informed as to where their money is going and how much of their money is being spent irresponsibly.  This powerpoint was designed to be self explanatory so the message would be easy to understand without notes or a presenter.

 

Link to Power Point

nuclear-power-not-in-nb

 

 

New Clear Free Solutions Questions Public Interveners Experts On Public Interest

In New Brunswick we have a Public Intervener that intervenes in NB Power rate increase hearings and is supposed to be looking out for public interest and fight to keep rates low and stable. In this hearing however the public intervener hired an expert to review NB Powers rate application and he is suggesting the board put priority on NB Power profits over keeping rates low and stable and that NB Power should consider asking for even larger rate increases to make up for poor performance at Point Lepreau.

NB Power may need bigger rate increase, says intervener’s expert

http://www.cbc.ca/news/canada/new-brunswick/nb-power-rate-increase-intervener-consultant-1.3939999

We discovered that the whole basis of his evidence was based on his wrong interpretation of the Electricity Act. He interpreted the act in his evidence as saying “rates should be kept low as possible and should be stable and predictable” but the legislation ACTUALLY states “rates shall be maintained as low as reasonably possible and shall be stable and predictable” There is a huge difference in legal and regulatory meaning between should and shall. A Shall statement is a requirement and a Should statement is only guidance and is not a requirement.

To read our Interrogatories on the public interveners evidence click the link below.

 

pincfs-ir-jan-24th-2017-doc