New Brunswick Can’t Afford Point Lepreau

In 2002 when the Energy and Utility board concluded that refurbishing Point Lepreau was not in the publics interest, the government should have listened. It’s now 11 years later and this still holds true.

When Point Lepreau was shut down all of the cost associated with it were going into a deferral account (like it did not exist financially). Shortly after the refurbishment started the market price for electricity fell substantially. While Lepreau was shut down NB Power started recording record profits mainly from purchasing power at around 4 to 5 cents a kwh and selling it again for close to 10 cents a kwh. In 2010-2011 NB Power Made a profit of $67 million. http://www.nbpower.com/html/en/about/publications/annual/2010-11AR-ENG.pdf In 2011-2012 NB Power made a profit of $173 million. With Lepreau running and back on the books for around half of 2012-2013 year NB Power profits were $69 million. http://www.nbpower.com/html/en/about/publications/annual/2013_Annual_Report_EN.pdf Now that Lepreau is up and running the first quarter results are not looking good for NB Power with an $11 million loss. http://www.nbpower.com/html/en/about/publications/annual/2013-14Q1.pdf 

This is mainly due to Poine Lepreau:

 

“OM&A expense increased $13 million compared to the

same period in 2012/13 mainly attributable to increased

labour, overtime, and hired services at the Point Lepreau

Generating Station and higher pension expense in 2013/14

as a result of changes in mortality assumptions and financial

market conditions. This was partially offset by lower

hired services and material at the Belledune Generating

Station due to an outage in 2012/13.”

 

“Amortization and decommissioning expense increased

$13 million compared to the same period in 2012/13

mainly due to the return to service of the PLGS.”

 

“Regulatory deferral reduced net earnings by $17 million

because the deferral commenced amortization with the

return to service of the Point Lepreau Generating Station.

In prior year, the deferral increased earnings by $36 million

because the costs were being deferred during the outage.”

 

“Finance charges increased by $12 million mainly due to

higher debt levels compared to the same period in 2012/13

and less interest capitalized in 2013/14 due to the return

to service of the Point Lepreau Generating Station, partially

offset by lower long-term interest rates.”

 

 

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