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.