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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