Media Release March 05, 2019
New Clear Free Solutions
MLA’s and Public petitioned to Save the Climate Change Fund siting huge economic, social and environmental benefits found in newly released Integrated Resource Plan.
On March 5, 2019 New Brunswick’s solutions-based organization, New Clear Free Solutions, wrote to all MLA’s to petition them to save the Climate Change Fund from being repealed from the Climate Change Act. In support of the petition the organization has also released their new Integrated Resource Plan (IRP) showing the many economic, social and environmental benefits that the fund can provide.
Chris Rouse, the main author of the plan states “Not only is this really good environmental policy, but our business plan shows it will also provide huge economic benefits to the province”. Rouse is also encouraging members of the public to also write their MLA’s and party leaders to show support for the framework in the newly released plan as well as asking MLA’s to vote against repealing the Climate Change Fund.
Rouse argues that the climate change fund can co-exist with the federal plan, as it does not introduce any new cost to consumers, which is the reason the federal government did not approve it. “By not approving it, the federal government did not mean we have to get rid of it, as they have no jurisdiction to do so.” Given that there is no cost to consumers, the climate change fund would still be in line with all party’s election commitments -even the commitment of “No Carbon Tax”. That is because it is a fund, not a tax.
An Integrated Resource Plan (IRP) is a comprehensive decision support tool and road map for meeting a utility’s objective of providing reliable and least-cost sustainable electric service to its customers while addressing the substantial risks and uncertainties inherent in the electric utility business. It is essentially the utility’s long-term business plan.
New Clear Free Solutions’ plan is a comprehensive visual document intended to guide the public and official decision makers through the critical decisions that need to be made in developing an IRP for New Brunswick. It is also intended to provide an alternative and comparison to our current business as usual (BAU) IRP. The document shows that private investment is not in the publics’ interest.
The alternative IRP examines the business case for a public investment of the Climate Change Fund revenue through our publicly owned utility into renewables, efficiency and fuel switching. It is consistent with current legislation including the Electricity Act and Climate Change Act that came into force in April 2018. It has the objective of transitioning 95% of our total energy needs to renewables using our own local renewable energy resources. This displaces most of our carbon energy cost that is external to our economy and redirects these funds back into the province.
Conclusions from the alternative IRP:
- There are no technical or economic barriers to the transition to a low-carbon economy.
- Publicly investing the Climate Change Fund revenue into renewables, efficiency, and fuel switching will provide significant benefits to the economy, environment and the New Brunswick society.
- The investment coupled with the reinvestment will provide all the capital needed to transition to a low-carbon economy.
- Publicly investing the Climate Change Fund revenue will keep rates low and stable.
- Publicly investing the Climate Change Fund revenue will pay huge dividends to the province and hence all New Brunswickers not just a select few.
- Publicly investing the Climate Change Fund revenue will get NB Power out of debt.
- Publicly investing the Climate Change Fund revenue will significantly reduce our emissions.
- Publicly investing the Climate Change Fund revenue will create many jobs and create a huge multi-decade construction boom.
After extensive research and consultations, New Clear Free Solutions has determined that most New Brunswickers want a strong economy and clean energy at low rates provided by NB Power. Given that renewables are now the least cost option, this alternative plan gives the people of New Brunswick what they want. The IRP that exists currently is the problem, not the Fund. We can seize the day, vote to keep what works and change what doesn’t.
Links to MLAs are provided below so that community groups and the general public can send a message to their MLAs and party leaders to vote against repealing the Climate Change Fund and show support for the framework used in this IRP.
Links to Additional Information
Links to Additional Information
New Clear Free Solutions has submitted evidence to the Energy and Utilities Board that NB Powers Integrated Resource Plan [IRP] is putting the Province at risk of the Federal Government putting an additional gas tax on New Brunswickers, and is driving electricity rates up.
Click Link to Read Evidence New Clear Free Solutions Matter 375 Evidence January 18 2018 New Clear Free Solutions Matter 375 Evidence Web
Chris Rouse, who submitted this evidence and has asked to be qualified as an expert at the hearings and states:
“It is not the new carbon tax policy that the federal government won’t like, it will be NB Powers IRP. We need to show them in September how we can significantly reduce our emissions without any additional tax slapped on us. NB Power’s IRP will not satisfy the Federal government, and if we get an additional gas tax it will be NB Powers fault. “
Using information provided by NB Power Mr. Rouse supplied the following graphs to the utilities board. They show that all of this extensive energy efficiency the Utility has been promoting, using ratepayer money, has almost no effect on emissions when compared to doing nothing. NB Powers grid is 75% carbon free so the effects of efficiency are minimal.
Chris also asked the utility how their ratepayer funded Reduce and Shift Demand programs was going to affect its bottom line. The information from NB Power showed that over the next 10 years the Utility is going to loose almost $700 million in net earnings and negatively affect its Corporate objective of earning enough money to reach a 20% equity target.
Lost earning equals higher rates, so Mr Rouse also asked the utility if ratepayers would still need a rate increase if the Utility Board does not approve NB Powers efficiency programs. The results show we could go 3 years, equaling a 6% rate increase, with no rate increases and reduce debt even further than the current plan.
NB Power asserted in its evidence that rates will be higher but customers bills will be lower due to the efficiency.
Chris’s concerns about these programs increasing rates was supported by the evidence submitted by the public interveners consultant. He identified issues with NB Powers way of thinking. Mr Kenecht states in his evidence:
“The primary implication is the converse of that described above for “minimize rates,” namely that the “minimize cost” test may very well result in higher rates, resulting in cross-subsidies from non-participants to participants.” Kenecht then goes on to recommend NB Power update its IRP.
Mr. Rouse was also concerned about the cross-subsidization and asked NB Power for the percentage of participants vs non participants during the hearing process to see if these programs are fair. The results from the utility show that less than 1% of ratepayers are participants and 99% of ratepayers are ending up with higher bills.
There are also concerns about who can participate in these “incentive” programs due to the significant upfront costs, so only wealthy people can participate. When asked about it during the hearings NB Power responded:
“NB Power is also investigating potential financing mechanisms to reduce the barriers in programs that require “significant” upfront participant investment to participate.”
After a lot of research into this it was found that this issue of “lower bills” vs “lower rates” is not something new. He found that there was a shift in NB Power thinking in 2010 when lower bills was chosen over lower rates, and that the previous Public Utilities Board and NB Power have both agreed in 1991 and again in 2001 that lowest rates was the appropriate measure not lowest bills.
With some guidance from Kerrie Blaise, an environmental lawyer from Ontario, Chris is arguing that the Utility has interpreted the legislation wrong and that the Electricity Act puts a priority on “lowest possible rates” not lowest bills.
Chris assert that the evidence shows efficiency won’t solve the problem and we risk the federal government taking additional actions on the Province. In order to stop climate change we need to just simply shift from fossil energy to renewable energy. He provides almost every publicly available data source that shows renewable energy is the lowest cost energy on the market and still dropping. The solution is now less expensive than the problem so there is no need to wait.
Again using NB Power supplied information, Chris presented another graph that showed the other options in NB Powers Integrated Resource plan, sorted from least cost rates to highest cost rates. The options with wind power all have lower rates, and shows more efficiency is going to lead to skyrocketing rates.
Chris provides a new plan to NB Power that instead of reducing and shifting demand to defer investments, will invest the Carbon tax into renewables and switch industry and automotive sectors over to a green grid. This plan is compatible with the new proposed legislation that contains many of the same principles his group has been promoting for several years. NB Powers evidence shows the more energy NB Power sells the lower rates can be. NB Power can increase its earnings without rate increases just by simply displacing fossil fuels from other sectors.
Chris reminds the Utilities board and NB Power he is not opposed to efficiency just the efficiency programs that NB Power has developed. He offered 4 different programs that would lead to lower rates while significantly reducing emissions.
While we all think efficiency is a good thing, Chris’s intervention highlights that it can be dangerous if it is taking time and money away from the real solution renewable energy. Efficiency is always good personal policy, but bad public, and environmental policy.
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.
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.
New Clear Free Solutions
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.
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.
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
New Clear Free Solutions Response to Energy and Utilities Board Staff