Rebuttal (really a rant) to Grahams blog entry

For those who read the Shawn Graham blog entries at the lowerratesnb website. I picked out the meaty part from the middle of Grahams latest post, and added some comments. Not that it's really so meaty, as most would starve trying to digest what he says, but anyway, it's my rant of the week. My comments are in red, as that is the color most people see when talking of this subject. And my rants don't get links to real information. Trust me, it's all out there in the www. The rant starts here.

The first question most people ask me is "Why was this step necessary?"

Yeah, Shawn, why was this necessary? For each of your statements, I have my own. Enjoy.

First, without a plan, rates would continue to increase. This puts a strain on the pocketbooks of our families and means our businesses and industries will be spending more money just to keep the lights on, instead of making their operations more profitable and hiring more workers.
Rates will still continue to increase. Industrial rates will go up as soon as the deal is signed, and will continue to go up forever. RCW rates only get a five year freeze with a substantial jump in year six.
Second NB Power's $4.8-billion debt is not manageable in the long-term, and as we look ahead at the costs of replacing our fossil fuel plants, that debt exposure would grow by at least $10 billion.

Hydro Quebec is adding $25 billion worth of infrastructure in the next four years to their already existing $36 Billion dollar debt. Plus if they add NB Power’s debt, the total could be over $60 Billion by 2013. Almost equaling their asset value today. No different than the situation NB power is in.

And finally over one-third of New Brunswick greenhouse gas emissions come from energy generation. And we're too dependent on coal and oil from foreign countries to heat and light our homes.

Since when is the US a foreign country? Technically, I guess it is, but I would have to say its a reliable source. Most of Belledune’s coal and petcoke supplies come from the US. Why can we not use the 100 million barrels of oil produced in Newfoundland each year? We have a major natural gas pipeline that supplies the US with natural gas to run power plants and the Bayside power plant in Saint John. The McCully Field in the Sussex Moncton area produces about 10% of the gas that flows through the line, and has the potential to supply more than Sable Island. How is that foreign? 10% of Newfoundland’s oil output would keep NB Power’s Coleson Cove station running at full load everyday of the year. To bad we didn’t put together a national energy policy when we had control, instead of giving it away to our southern friends to pad their pocket, and force us to buy our own resources back on the open market at inflated prices. When Hibernia went commercial, the break even price was $ 9 per barrel of oil produced.

What is your next idea to reduce oil and gas consumption for the transportation sector? Oh yeah, you won’t be around long enough to get to that issue, so no need to worry about it.

These three factors must be addressed if we want to achieve our goal of a self-sufficient New Brunswick.

See above to find out how to address your problems.

So early in 2009, our government sought out an opportunity to lower rates, lower debt and lower our dependence on fossil fuels while maintaining control of our energy policies.

Quebec also sought out new customers as they now can’t compete with the cheap natural gas stations in the US. They also lost an aluminum smelter, pulp mills, mines, and other small industries totaling 8.5 TW worth of sales. This is almost equal to the proposed RCW pool in NB. They needed some new customers. The $25 billion in new dams and transmission lines will cost them a fortune in financing, and the need to pay for it somehow. Fortunately for them, along came you, and guess what? They say there is one born every minute.

As for lowering debt, well that’s a joke.

And we looked for a partner who could help us achieve that.

Partner? I guess when you buy a new car, you could call the dealership that sold it to you a partner. Some one who will give you a five year warranty, and then bleed you dry every time you pull in for even a basic oil change. Eventually you will need a whole new car, and they will be glad to sell it to you.

While we have an excellent partner in Hydro-Québec, we have heard New Brunswickers' concerns about protecting our energy sovereignty. New Brunswick will maintain absolute control over our energy policies. Hydro-Québec is a company operating in a highly regulated industry. Here in New Brunswick, we still set the rules and Hydro-Québec must follow them. That's part of the proposed agreement as it now stands but having heard the concerns from New Brunswickers our government is looking at how we can further protect and enhance New Brunswick's energy sovereignty.

Why would you make the statement that “NB will maintain absolute control” and “look at how we can further protect” in the same paragraph when referring to energy sovereignty. Are you doubting your own beliefs?

Our government will continue to decide what the energy priorities are, what kind of power plants can be built here, and where they can be built.

What kind of power plants? Give it a break. Status Quo or not, because of the economic downturn and loss of industry, NB wouldn’t need a new power plant for 20 years anyway. I thought the future was green. NB has 5000 MW worth of wind power potential. So do PEI and Nova Scotia. Partnering with Hydro Quebec for load control and a place to store all the excess wind energy would be a partnership. That would be progressive thinking. Building wind to hydrogen energy conversion facilities to store excess wind energy, and using it on less windy days would be progressive thinking (no I’m not a paid conservative – but will be voting that way). Newfoundland is looking for customers and a route to the US for it's vast hydro power potential. Partnering with them would have been progressive.

And New Brunswick's Energy and Utilities Board will make the final decisions on whether rates can increase.

This, I can’t wait to see. You can’t even stop the price of home heating fuel and gasoline from bouncing up and down. How come you can’t stop NB Power from doing a simple small 3% rate increase? Is this a smokescreen for the bigger 1 cent per kilowatt hour increase that the Quebec Government (notice I did not say HQ) plans to implement to cover their ballooning debt.
This would be a 26% rate increase to the generation portion of their rate. And about a 16% overall rate increase. I’d like to see the look on the NB industrial customers face on April 1, 2010 when this gets implemented, and they kiss their big rate reduction goodbye. You should put this in your NERA formula and see how many Billions are saved over eternity.

When you ask HQ to tender for any possible new load growth, and all the bids come in at a much higher rate than what is currently paid by the heritage pool, how do you regulate that? Either you pay, or you turn off some customers. Right?

See you at the polls in September.

My view - of why it has to be signed by March 31

I have talked on a few subjects, but only last week realized in my own head, how some of the pieces fit together. This may be old news to some, revelations to others, but I'll try to give a little history lesson for the past year and a half. Some information is not linked, as I have previously blogged about it and linked it in previous posts.

In late 2008, the economic collapse started. http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932009
Unforeseen by most. But predicted by a few. http://www.financialsense.com/
Since then Quebec lost an aluminium smelter, paper mills, mines, and others. This resulted in a 8.5 TW loss in load. Data all publicly available published in Hydro Quebec's 5 year strategic plan. This amount of electricity is almost equal to the proposed RCW heritage pool in NB.

HQ also started a $25 billion capital expenditure program to build dams and transmission lines to feed the US. This is to be spent from 2008 to 2013.

Natural gas prices also plunged, http://tfc-charts.w2d.com/chart/NG/W which makes the merchant power plants in the States that use natural gas cheap and very competitive. All these natural gas plants currently are a lot cheaper to run than the new hydro stations coming on line in Quebec. There is a great backgrounder of information published here : http://www.iso-ne.com/nwsiss/pr/2009/final_2009_october_backgrounder_remarks.pdf . This document is from the New England Independent System operator website, so it should be a fairly knowledgeable and objective source.

Here is an excerpt from page 10 detailing the dramatic drop is prices:
"For the entire summer of 2009, average electricity prices were down 63 percent compared to summer 2008. Gas prices were down 67 percent, and oil prices were 40 percent lower. In July 2008, fuel prices were climbing to historic highs and electricity prices followed suit, with an average high at $107.98 per megawatt-hour that month. Fuel prices have dropped dramatically since then. In July 2009 alone, natural gas prices were 70 percent lower than the previous July, and oil prices were 46 percent lower. Wholesale electricity prices were 69 percent lower than in July 2008, at $33.53/MWh."

With wholesale prices at $33.53/MWh, HQ cannot afford the mortgage on those new dams.

HQ's profits in 2009 will fall from over $3B to about $2.4. This is less money available to the Quebec Gov who collected $2.2B from HQ last year. Add this to the $4B deficit that Quebec has this year, and now you have a problem. HQ NEEDS CUSTOMERS. So while all this was happening, along comes Graham and says he needs some cheap power to keep his industrials happy. Mr Charest, knowing he has a problem developing, paints Graham a pretty little picture. The premier jumps up and down with joy as he feels he has just won the lottery. A deal is struck, and the rest is in the papers for all to read.

But where's the catch? Well, heritage pool power rates in Quebec are legislated at 2.8 cents a kilowatt hour. This is under direct control of the government through legislation. Real rates are 2X after adding in transmission and distribution. But still 30 to 50% less than NB. The big rush to have everything finalized is because Quebec plans to legislate a 1 cent per kilowatt price increase to the existing heritage pool customers to cover some of it's $4B budget deficit. This is about a 15% rate hike. A selling feature of the NB power sale, according to Graham, is the lower industrial rates in NB to match Quebec's. A 30% reduction. That will be on March 31, 2010 at midnite. But, when the Quebec Gov passes legislation on April 1 to raise rates 15%. Guess what? All the industrials in NB will get the same rate increase. So that 30 % drop is only 15%. Not such a great selling feature. And then people will be really ticked off. That is why Keir keeps eluding to this window of opportunity. That window will close soon, and once the big rate reduction is gone, then they will have NO friends at all. Plus, if they are spewing a lot of crap now to get us to buy into it, if this Quebec (and NB) rate hike pops up out of nowhere, the backlash will be off the charts.

And that Folks, IMHO, is the why of why Shawn Graham chose the path he did. Inexcusable in itself , but the how is even more inexcusable.

Unfortunately Canada lacks a real Energy Policy. As the largest exporter of crude oil to the largest consumer on Earth ( the US) we have no need to be held hostage to the rest of the planet.
Unfortunatley we don't own our resources, an have a difficult time moving them across the country from the "have" provinces to the "have not" provinces. But, Newfoundland produced 100 million barrels of oil a year for at least the last eight years. http://www.economics.gov.nl.ca/EB-Oil.asp . Enough to keep Irving's refinery going at 300,000 barrels a day.

And there are over 120 to 200 years of coal supplies in North America at current consumption rates.

For those who need more reading material, check this out : http://www.mackinac.org/11309


New Brunswick hasn't even put simple things like air to air heat pumps on their list of things to do. These have advanced a lot in the last few years. And would cut the average bill of an electrically heated house by half. They extract heat for the outside air and dump it in your house. No different than a refrigerator takes heat from inside your fridge and dumps it in your kitchen. On a bigger scale, the average power plant is only 33% efficient at converting fossil fuels to electricity. Natural gas fired stations with co-generation facilites, can operate at 50% efficient. To produce electricity with natural gas, and then use it to heat a house is a waste. If a provincial policy were in place to heat houses with natural gas, the efficiency would be upwards of 97%.

Anyway Folks, I'm drifting off topic. Happy New Years to all if I'm not back before then. Check and support all the other sites I've linked too. And keep up the fight.

"The end of cheap hydro"

I've seen this stated a few times recently, so thought I would post some links.

http://www.quebecoislibre.org/09/090215-3.htm#migbas

http://www2.macleans.ca/2009/10/22/the-end-of-cheap-power-in-quebec/

http://www.montrealgazette.com/technology/Hydro+Qu%C3%A9bec+seeks+rate+hikes/1845406/story.html

http://www.montrealgazette.com/cars/Hydro+hike+CEGEP+tutition+fees+table+Liberals/2038109/story.html

Even Hydro Quebec can be caught blindsided by their government owners:

http://www.montrealgazette.com/news/talks+rate+hikes+Hydro+Quebec/2073781/story.html

http://www.globalmontreal.com/entertainment/Debate+higher+charges+Bachand/2038109/story.html

That should be enough links to fill your brain for now. Goodnite folks.
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Side by Side comparison NB Power and Hydro Quebec

I did a side by side comparison of some of the statistics for NB Power and Hydro Quebec. The picture below is not readable, but when you click on it, it should open a new page with a spreadsheet with a comparison of the major indices of each company. Use your back button to get back to the blog. Of course, anyone can pick a number from one company to compare to another, but I picked 12 of the larger items. Hopefully I can add to it. All items are from Annual reports or other sources that I have previously posted. I also added the provincial population and provincial debt as a starter. Neither provincial debt calculation has the respective power company debt. Quebec has roughly 10 times the population as New Brunswick, so naturally, one would assume that everything else should maintain some resemblance of that 10x ratio. Most items do, with some items favouring Quebec, and some items favouring NB. But our premier should stop it with the "crippling debt" crap. If anyone has a crippling debt, it is Quebec. Oh yeah, that was the subject of a previous post.

One item that is a major item, that i have not included yet, is the percent of renewable fuel source versus fossil fuel source. I won't pretend to argue that one, but New Brunswick played the hand it was dealt. There is just not much hydro left to develop in the province. Grand Falls, could be doubled (60 - 80 megawatts) but besides that, there are only a couple of hundred megawatts of hydro left in the province. NB Power developed Grand Lake to use indigenous coal at a time when it was beneficial to the province. It served a very useful purpose for a lot of years and will be soon be retired.

Happy reading and Happy Holidays to everyone. Except the Grinch who stole Christmas. You know who you are.

EDIT REQUIRED. (Jan 9) I may have to edit the data for the NB debt. I may have forget the debt carried by the New Brunswick Electric Finance Company that had been formed a few years back when the electricty act was changed and NB Power broken into several companies. Seems part of the debt was tranferred to this new entity for some reason. Actual debt per rate payer may approach $16,000 per ratepayer.

Random thoughts

Check this out : NB's debt rating was downgraded a few moonths ago. Seems somebody's noticing all that spending.

http://www.bloomberg.com/apps/news?pid=20601082&sid=afzm7ohRqwF0

Debt per person in NB currently stands at about $10,500 per person.

Debt per person in Quebec stands at about $19,000.

http://www.edmontonjournal.com/business/Gary+Lamphier+Alberta+financial+troubles+would+envy+other+provinces/1934363/story.html
Seems raising power rates will be an easy target for Charest to combat his $4,000,000,000 (billion) dollar deficit this year. I don't like typing those really big numbers. There are so many zero's it easy to get mixed up. Remember folks, that is just the shortfall in income in one year. Two years of Quebec deficit is equal to all of NB's current debt total to date.

I like this example of how the status quo in Alberta resulted in 50% savings in the last year versus those who chose a five year contract. Sound familiar? Gotta be careful what you wish for.

http://www.workingforest.com/content/alberta-power-rates-plunge

It's time for Quebecers to pay the bills.

http://cebl.vmbl.ca/Economics/9/CEQ_02112009_e.pdf

And I really like the icing on the cake in this article. A 1 cent per kilowatt hour rate hike. That's about 15% in quebec terms and 10% for here.

http://www.wsws.org/articles/2009/nov2009/queb-n09.shtml
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Hydro Quebec's Debt in 2013

Shawn Graham, our infamous (or whatever word you want to use) leader has been heard saying many times over how NB Power has crippling Debt. How the debt has to be slashed to save the province the extrutiating turture of having our children's children pay off that debt.

Here's some numbers on Hydro Quebec's debt.

Current year (these are rounded) $36 Billion
Planned capital investments( more debt) 2009 - 2013 - $18 Billion
Acquisistion of NB Power 2010 - $4.75 Billion

http://finance.yahoo.com/news/Fitch-Rates-HydroQuebecs-bw-1426914954.html?x=0&.v=1

Total debt at end of the NB Residential rate freeze will be in the order of $48 Billion. About 2/3 of current asset value of HQ. Of course their assets will grow by the same $23 Billion. Well not True, James at Gov NB on the lower rates site says that NB Power has no value because of it' debt. It's funny how one person's trash is another's treasure. Numbers are from the strategic plan. NB Power debt is about 90% of assets. I hope to be able to show what it would be at the end of 5 years with the status quo.

The strategic plan for Hydro Quebec talks a lot about capital expenditures.
http://www.hydroquebec.com/publications/en/strategic_plan/pop_feuilleter_le.html
The point of view there, is that this will create great ecomonic spinoffs, economic developements, and untold person years of jobs. But in lowly old New BRunswick, heaven forbid we have any of these problems. The HQ Strategic Plan 2009–2013 is a good read.

Back to my big picture theory. HQ has 8.5 Terawatt hours of electricity surplus this year.

http://www.hydroquebec.com/publications/en/strategic_plan/pop_feuilleter_le.html page 3.

8.5 Terwatts of power is 8,500 gigawatt hours or 8,500,000 megawatt hours of electricity.

The projected surplus for the period 2009 to 2013 will total 35.2 Terawatts.

Going rate these days on the open market, well the heck with the open market. Going rate these days in New Brunswick for residential is $95 per megawatt hours. 9.5 cents per kilowatt hour x 1000 to make a megawatt hour.

Lets see: 8,500,000 megawatt hours available in the head ponds doing nothing, is worth , well nothing. 8,500,000 megawatt hours of electricity sold into NB at residential rates is worth :

8,500,000 x 95 = $807,000,000.

Of course, NB Residential did not consume that much last year, so the difference would have to go to small business, who used to pay more for power than residential. I don't know if that rate parity was corrected over the last few rate increases. Subject for another blog.



Some more simple math, Shawn get out your easy button,


$807,000,000 x 5 year rate freeze = Over $ 4 Billion dollars.




I remember a Bill Cosby show from way back when. I remember one day one of Bill's daughter had a boyfreind over. Bill wasn't to struck on him or something he had done. Too make a point he started to describe a wonderful meal. The most succulent, thick, tender, delicious steak that money could buy. Cooked to perfection on a open flame. Served with only the finest sauteed mushroom, and onions. The side servings of vegetables were described as being too die for. The setting was perfect, the company devine. The meal served on the inside of a stinking old garbage can lid. Sounds really appetizing doesn't it. The same thing has been said about this deal on many websites. And there are a few, and all are doing very well what I have been at least attempting to do, giving great information and comentary on this deal. Check out Donald Arsenault getting conftronted in his riding office in Dalhousie on the Save NB Power website.

So Shawn and Keir, at this point, it doesn't matter how good the steak looks, when you serve it on the back of a stinking old garbage can lid, nobody's really going to buy it.

Oh, BTW, I think the steak we being served is as tough as boot leather.
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Got 20 minutes?

Not a lot to post. Busy with the kids and Christmas the past few days. I've been try to see the big picture. But there's a lot of crap to clean off the windsheild and my wipers can't keep up.

Check out the video posted on the CBC. Tery Seguin interviews Jack Kier, Aylward, NBP, and the Green Party at the same table. And they were nice to each other. It's about 20 minutes long.

http://www.cbc.ca/video/news/player.html?clipid=1355313047

The end of cheap power?? Seems since the signing, Charest may want to rise power rates to offset his $4 billion deficit. Goodbye to the great industrial rates savings. Man, are they ever lining us up to pick our pockets. NB is getting suckered big time on this sale.

http://www2.macleans.ca/2009/10/22/the-end-of-cheap-power-in-quebec/

Something Keir eludes to is the timing. I think the 3% rate hike is a smokescreen for a bigger, darker picture. I still think HQ has a cash flow issue of sorts. Mind you, it's a cash flow issue most wouldn't mind having, but a reduction in cash flow for HQ with their capital intensive hydro stations is not good. Natural gas power stations in the US have been using the depressed gas prices to put lots of power on the grid a decent price lately. Cutting HQ's profits. The shuttering of a few industrial customers in Quebec has left HQ with an excess of generation. (See previous posts on that subject.) That, coupled with the agressive expansion plans tailored to the currently less profitable export market (see link) has left them scrambling for a good base rate source of revenue to cover off their investments.

http://finance.yahoo.com/news/Fitch-Rates-HydroQuebecs-bw-1426914954.html?x=0&.v=1

"Since 2008, HQ has embarked on a major, roughly $25 billion capital program (through 2013), which includes the construction of several large hydropower projects, transmission additions and distribution system upgrades. The projects are in varying stages of development and continue to meet important milestones and commissioning dates. By 2013, HQ is projecting to have another 1,000 megawatts (MW) of new hydro-generating capacity on-line (compared to existing capacity of 36,429MW for 2008). While a portion of the new generation is needed to meet modest native load growth, an increasing proportion will be used to increase exported power sales - a credit concern, as off-system revenues are more volatile and fluctuate based on electricity market prices. On a positive note, given HQ's extensive reservoir capacity and its mainly 'green' (non-carbon emitting) power resources, its power resources are likely to remain in demand, both inside and outside of Quebec for the foreseeable future, particularly as the U.S. and Canada increasingly focus on attaining renewable and carbon emission reduction environmental targets. "
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.I had heard that the first offer by Quebec to Graham and company was rejected, but Quebec came back to the table with more money. Voila, the deal gets signed. With that, I'll leave you to draw your own conclusions. Goodnite folks. The time on my blog is off by 4 hours BTW, need to fix that.

I'm losing it folks.

I have just come to the conclusion that there must be some huge technological breakthrough that the Graham government knows about, but that no one else does. They are doing us all a great favour by selling the whole of NB Power (well most of it) to avoid all the liabilities in the near future. Has cold fusion been perfected at a local university? Has a major breakthrough in solar technolgy come to Grahams knowledge? Something that will allow all houses to go off the grid and not even have a power bill. Matybe a little device in the basement about the size of a freezer that can produce huge amounts of power? More than enough power for your house just from regular tap water. Maybe a new industry is about to be announced converting gasoline and deisel cars to electric cars. They can all be powered from the little box in the basement. NB Power employees are going to be trained to contruct these little devices, patented of course, NB Power Genco Surplus Assets will retain the rights. Other employees will be trained in the conversion process. Installing electric motors and smaller power boxes in the trunk. The customer call centres will be still taking calls, setting up appointments with the nearest generating station to go in and have your vehicle converted. The bigger the better. Big full size trucks especially welcome. Much easier to fit the little bozes. Exports of electricity will be replaced by exports of little boxes the size of freezers. The proprietory and patented technolgy will not be licensed to anyone. Anyone seeking to purchase one will have to come into the province and stay in our hotels, and eat in our restaurants, shop in our stores. They will have to call ahead to schedule their appointment with the customer call centre. All NB Power jobs in the province will be guaranteed until infinity, or death, whichever comes first. But you say HQ will take all the profits. TRUE, but we could have the EUB minimize those profits. And NB will have a lot of jobs. Revenue for the province would come from a new tax on the export of the little box. The tax could be quite large. As soon as the little box is turned on, it will run to infinity on just water. Rainwater included. No maintainence, no future taxes collected. There are only a few billion cars and houses in the world. To convert them all with the limited population in the province, would require that people move here in droves. The profit on each little box would only need to be a few dollars. Maybe even take a loss. After all, the customer call centres will have millions of customer lined up. It will take a long time to process them all. Unemployment in the province will be wiped out. The government coffers will be overflowing from just personal income taxes collected. Workers will be paid based on years of service, experience, and more importantly hours of work. There will be so much work, incentives will be given to go home early to allow other workers with less seniority to come in a get a shift here or there. Vacation entitlements will start at 8 weeks per year. Employees will receive one extra week per year of service until they retire. But what will stop people from opening the little box and learning it's secret. Well folks, that's the little Secret that only Graham and his cabinet know. Apparently it's crackproof. As soon as the little box opens, it shuts down, and cannot be re-activated until it passes through a Surplus NB Power asset. The announcement will be made December 15. Production starts April 1, 2010. Call ahead and book your appointment now folks. The line up starts behind me.

You know if you read this enough times, it's almost beleivable compared to some other stuff I've read lately.


On a side note, I made some changes to the questions thast appears at the bottom of each post. I Think it was confusing. There is limited space and and I didn't realize there was text I could edit.

The "Out" clause

Keir made a comment today on an article about the out clause.

http://www.cbc.ca/canada/new-brunswick/story/2009/12/09/nb-nbpower-out-clause.html

Posted this reply :

"The out clause won't do much good. The government obviously thinks we can't afford to keep NB Power, so how does Keir expect to buy it back (not that he'll ever get that option as a politician) in the future? Are we to borrow more money that the government doesn't have now, and put us all another few thousand dollars per person in debt.? Besides the fact that this is a horrendous deal for NB in the mid to long term, the true facts behind this deal wll only reveal themselves in about 10 years. Then it will blindingly obvious when NBer's are paying high rates. Rates we used to laugh at because those were the rates all our neighbours (except HQ of course) paid. So, whether it has to do with the 7 TWhr surplus that HQ has this year because of the economic downturn, or the blocking of Newfoundland by tying up the grid, or the panic by Graham to finance his aspirations, or the super early positioning to make up for the loss of revenue from Churchill falls, or unknown issues with Lepeau, something big and ugly will rear it's head. The truly sad part is that NB was in the drivers seat. Quebec has a surplus and needs the revenue. Profits were down over $500,000,000 by the third quarter of this year. Shouldn't have been a problem to negotiate a short term ( 5 years or less) power purchase agreement. And for the future, the huge availabilty of wind power (thousands of MW per province) in the Maritimes is a perfect compliment to the vast hydro resources of Quebec. The wind energy can't be developed without a way to store the excess on a windy day, and generate the shortfall on calm day. Hydro does that. With this deal the only benefactor would be Hydro Quebec. And because HQ gets to own the NB system operator, HQ gets to control the dispatch, the players, and the profit."

Year SIX rate increase

I've was away this weekend and need to catch back up, so just a quick post. Get out your calculator.


Year six price increases.

1.) CPI – expected to be 2% (some government documents show it at 2.3%)
2.) Pt. Lepreau deferral – $525 million amortized over 25 years equals 2% rate increase based on current NB Power revenue stream.
3.) Cost of fossil station decommision. (this can be added to rates if goverment legislates it) NPV of $124 million. Amortized over 20 tolling agreement equals 0.6% rate increase.
4.) Unbundled transmission costs plus a ROI. %?? Now remember, NB Power will shut down Dalhousie G.S., but the EEL River and Madawaska HVDC station will need to to be upgraded to get more capacity into the province.
5.) New charge for unbundled distribution ROI. NB Power does not do this now. This is subjet to a “fair and equitable” ROI. So lets call this 9.5% and say it only adds 1 % to rates.
6.) Other legistaled changes, including such things as renewable energy. As an example, Lets say the 200MW of wind power that is legislated to come on line, does so after the MOU is signed. 200 MW at 30% capacity factor would be a steady load of 66MW. Expected cost would be $120 MW hour. 20% higher than residential rates today. 66MW x 365 days yr x 24 hours day = 578,160 MW hrs per year. Total value of about $70 million per year. If this is only applied to the residential heritage pool, the rate difference is $14 million per year. So add another 0.1% to rates to make up difference.




Easy button total is 2% + 2% + 0.6% + ?? + 1% +.1% = 5.7% as a minimum rate increase in year 6.

This is before interest..
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And this thing about the Premier not being able to put it writing that Newfoundland will not be able to push power through the province. I don't get that. He should read the law of his own province. (OK - I can't find my reference - I'll have to update later, but one of the NBSO documents states that anyone can build a transmission line in the province. Of course, you would have to go through the permitting issues, but nothing is stopping you - projected cost = $1Million/km)

BTW, the NBSO has a lot of authority that will be reliquished to Quebec :
http://www.nbso.ca/Public/en/pm/reliability/default.aspx

Impacts of Wind Generation of up to 500 MW in Prince Edward Island. This basically will give Quebec complete control over PEI. The System Operator must receive real-time information from Maritime Electric Company Limited. This information must include status of transmission, reactive resources, and generation resources including wind generator output, curtailment and environmental data.

And Dalhousie was not expected to close, contrary to popular opinion: page 3
http://www.nbso.ca/public/_private/NBSO%2010-Year%20Assessment%202009.pdf

This is a good read as well. I wonder if the Premier read it.
http://www.gnb.ca/0009/0369/0015/0001-e.pdf





And a quick note on the value of the NB Power transmision system. NB Power has 6804 km of transmision system from 69Kv and up. Based on Hydro Quebec published data, this would have a value of $3.29 Billion.
Sources : http://www.hydroquebec.com/transenergie/en/reseau/bref.html
and page 38 here http://www.nbso.ca/public/_private/NBSO%2010-Year%20Assessment%202009.pdf
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Emmisions again - something stinks anyway

Breaking news - Check out AIMS report on the MOU - posted here http://ow.ly/IhEs

And the following was posted on my favorite website :

Total Emmisions from the refinery would be 5.7 MT from the Eider Rock project. Current Emmisions are around 3.0 MT .

Eider Rock projected emmisions : http://www.irvingoil.com/dloads/Chapter07_Atmospheric.pdf

current Saint John refinery emmisions (2007)
http://www.environmentcanada.gc.ca/indicateurs-indicators/default.asp?lang=En&n=8F572EA1-1

I'm not against the second refinery either. I thought the energy hub, and associated jobs, and the vision to have all the players on the same team was a great idea. But to kick a big player off the field in mid game strikes me as odd.

Total provincial emmisions are here :

http://logixml.ghgregistries.ca/New%20Brunswick%20Dashboard%20Solo/rdPage.aspx?rdReport=Dashboard_Provincial

and in the Environmental Implications published in right hand column of this site.

Total from both Refiney(s) with zero emmisions from NB Power, would be (5.7+3.0) 8.7 MT of (18.7-6.4+5.7) 18 MT or 48% of the provincial total.

2020 target is 14.5 MT. I won't add further comment to the fact that NB Power and the proposed refinery have similiar carbon footprints.

I wonder how much effect the carbon cap and trade cost will have on the value of gasoline, home heating fuel, and power produced from natural gas at the various facilities in the province.

And to James, How come the rate that is paid to the windfarms is not published in this province. PEI expects to pay 12 cents/kwhr.
http://www.gov.pe.ca/photos/original/wind_energy.pdf

Ontario plans to pay 13.5 cents/kwhr.
http://www.powerauthority.on.ca/Page.asp?PageID=122&ContentID=6858


Both these rates considerably higher than residential rates paid in New Brunswick today. I can only guess that rates paid to windfarms in New Bruswick are similiar. So no matter who owns NB Power, if the government energy policy dictates more wind power, then all our prices are going up. A problem I see, is that if considerable wind power is implemented during the five year price freeze, and hydro quebec has to absorb that cost differential during those years, then at the end of five years, when the cost of new generation, plus interest gets added on, it will be considerable. I'm quite sure Hydro Quebec will be vocal in telling the outraged public why their rates just shot up. It will be green, but COSTLY.

Still pissed off

Someone sent me some info today. Thanks Mike123. I will repeat it here without editing and let you draw your own conclusions.

"
From this site…

http://www.irvingoil.com/company/erock.asp

go to this link…

http://www.irvingoil.com/dloads/Chapter07_Atmospheric.pdf

go to page 56…

notice that they outline the Proposed, (and environmentally fully approved) GHG emissions of the new refinery… 5.77Mt/yr ! and the Minister on Environment concluded


here… http://www.gnb.ca/0009/0377/0002/0036-e.pdf


3. CONCLUSION

Overall, based on the results of the environmental assessment, it is concluded

that with the proposed mitigation, monitoring and contingency planning, the

residual environmental effects of the Project are rated not significant,


#@$@#$% crooks" (I did edit the swear words)


Now go here and look at the total GHG for NB Power.

http://www.lowerratesnb.ca/downloads/Environmental_implications_En.pdf

Well, I will help you to reach your own conclusions. Basically, for NB Government to meet the 2012 Kyoto agreement on GHG emmisions, and allow the Irving Eider Refinery to be built, NB Power must be shutdown.
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Now I'm really getting pissed off.

Posted today. Good job this James guy at the lowerrates site keeping posting crap. I might not be so motivated.

12.1.2009 at 7:57 pm Northern Tour Guide :

James, You might want to check out an earlier post with the following highlights. The data comes from information published on this site and NB Power.

Electricity consumed in NB consists of:

26% in province renewables,
30% Nuclear: Pt. Lepreau when its operating,
20% contracted: including biomass and other hydro and some natural gas.

The remaining consists of Belledune, Grand lake (closing) and Dalhousie (still very cheap – Keirs words, but closing soon). Dalhousie and Grand Lake seem to be just filling a gap left by the Lepreau shutdown.

So soon the only fossil power generated will be Belledune, and it runs flatout and has been top ranked for numerous awards in North America for low cost and reliabilty. Not to mentions it has the first scrubber installed in Canada. So it’s as clean as the law requires it to be. Even the government used to brag about it.

http://www.gnb.ca/cnb/news/nbp/2007e0464nb.htm

Oh, and by the way, Dalhousie Generating Station greenhouse gas emmisions are the same as the Becancour natural gas facility built in Quebec.

http://www.transcanada.com/company/becancourLanding.html

Becancour = 1.687 MT GHG
Dalhousie = 1.7 MT GHG

http://www.environmentcanada.gc.ca/indicateurs-indicators/default.asp?lang=En&n=8F572EA1-1

So it seems the the reason that Hydro Quebec will be getting all the NB Power greehouse gas credits is to keep it’s own facilities running in the future when the carbon cap and trade comes into play.