|l 'histoire trouble et dispendieuse d'Énergie NB, David Coon en arrive à laconclusion
que le futur d'Énergie NB sera coûteux et plein de changements. À la lumière des
prospectives de déréglementation et d'une plus grande concurrence, la dette de 3,6
milliards à Énergie NB est perçue comme une "dette en détresse" dispendieuse
qui sera probablement ajoutée
au fardeau du consommateur. L'article termine avec des recommandations à considérer lors
de la restructuration du secteur de l'énergie électrique et comprend l'adresse où l'on
peut obtenir une copie du livre blanc du gouvernement sur la réforme en électricité.
Universally accessible and affordable electricity. Inexpensive and reliable power for
industry. These were the goals of creating the New Brunswick Electric Power Commission and
giving it a monopoly over electrical generation in the province
Massive public investments were made to achieve these goals, and achieved they were.
Electricity flowed to lonely farmhouses and massive pulp plants alike. Power rates
declined throughout the fifties, sixties and into the seventies. But by the late
seventies, provincial politicians decided the New Brunswick market limited the growth of
N.B Power and began to look at electricity export markets. What followed was nothing less
than a construction frenzy.
"Electricity flowed to lonely farmhouses and massive pulp plants alike."
The Clean Air Act was passed in the United States banning power generation by high sulphur
oil. Lacking equivalent legislation in Canada, the New Brunswick government sensed an
economic opportunity and built a massive oil-fired power plant outside of Saint John. This
plant, our province's largest generator at 1,000 megawatts, would then burn high sulphur
oil to provide cheap electricity to supply America utilities that had been backed into a
corner by U.S. environmental legislation.
Next came Richard Hatfield's obsession with nuclear technology and a willing partner in
the Atomic Energy of Canada Limited. Together, they concocted an export fantasy that had
six or more CANDU reactors lined up along the border. They would then ship electricity
south, where utilities were running into fierce opposition to nuclear power plants. Of
course, what we ended up with was Point Lepreau and a foundation for Lepreau 2.
Finally, when the McKenna Liberals swept into power, another couple of massive power
plants were placed on the drawing board. Thus allowing the new government to build its own
electric monuments. The Belledune coal-fired power plant on the north shore was a result,
one of a planned two units, that would be the centrepiece of the Liberal government's
electricity export strategy.
A house of cards
The result? With the arrival of natural gas and relatively inexpensive gas-fired
generating stations, the electricity market dried up. As the recently released white paper
on the future of the electric power sector in New Brunswick puts it, "NB Power
currently has an inappropriately high level of debt ($3.6 billion), resulting primarily
from an aggressive program over the past twenty years to construct new generation
facilities, and a failure to raise rates charged for electricity by sufficient amounts
during that period. In addition, current operational problems at Point Lepreau are placing
an added strain on NB Power's ability to pay down its debt."
"NB Power currently has an inappropriately high level of debt ($3.6 billion)..."
The report made no mention of NB Powers disastrous build for export strategy. It was as
if the government had fallen for its own rhetoric about building to meet provincial
demand, exporting any surplus and keeping electricity exports artificially high to keep
New Brunswick power rates low.
Stoically the white paper says NB Power's $3.6 billion debt is its number one challenge.
"In the future, NB Power must have a balance between revenue and costs sufficient to
meet its financial obligations and to reduce its debt to more appropriate levels,"
according to the white paper.
To make matters worse, the provincial government believes that they will have to open up
the electric power sector to competition. To export electricity into New England, New
Brunswick must open its markets to American imports. Ending NB Power's monopoly on
electricity generation would deeply cut into its revenue generating capacity. Large power
consumers then might choose to generate their own electricity from natural gas, providing
them with cheaper power than NB Power can provide. They could also choose to purchase
cheap hydroelectric power directly from Hydro Quebec or inexpensive coal-fired power from
the Ohio Valley. Presumably, municipal utilities in Saint John and Edumndston would also
exercise these options.
"To order copies of the white
paper on electrical reform call 453-2206 and ask for the discussion paper entitled,
Electricity in New Brunswick Beyond 2000 or write the Mines and Energy Branch DNRE, P.O.
Box 6000, Fredericton, E3B 5H1, Attention: Rhonda Doiron. The white paper can also
be accessed by clicking here"
In search of a way out, the provincial government has struck a task force co-chaired by
University of Moncton economist Donald Savoie and financial services advisor David Hay.
Assistance has also been provided by Doug Goss, senior advisor to the Public Utilities
Board and David Folster,a former journalist and executive director of the New Brunswick
branch of the Canadian Forestry Association.
The mandate of the Task Force will be to consult with interest groups from the Irvings and
labour unions, to environmental organisations. They will also receive written submissions,
on the government's white paper on reforming the electric power sector, from the public.
The Task Force will then prepare a report of options to be presented to a new Select
Committee of the Legislative Assembly. The Select Committee will be holding public
hearings and will submit a report to the Legislature.
Energy Minister Alan Graham cited several issues that need to be explored including:
restructuring the industry, open competition, and private sector involvement in the
electrical energy sector. He emphasized the need for active involvement from New
Brurnswickers in the consultation process.
In their 1997 book, "Reinventing Electric Utilities," Ed Smeloff and Peter
Asmus list two key questions for citizens to consider when governments contemplate opening
the electric power sector to competition.
"...require private power generators to supply a set percentage of the power they
sell from renewable sources."
First, does the restructuring ensure that investments in energy efficiency and
renewable energy technologies are encouraged? Replacing a publicly-owned monopoly, subject
to public policy and legislation, with a competitive market requires the sector be
re-regulated to reflect the restructuring of the industry. Explicit public polices are
required to promote investments in energy efficiency and renewable energy technologies. In
a number of American states, a public benefits charge has been contemplated to build a
pool of capital to be invested in energy efficiency. The other public policy mechanism
that has been considered is a renewable energy portfolio which would require private power
generators to supply a set percentage of the power they sell from renewable sources.
Secondly, are the costs and benefits of restructuring equitably shared between
individuals, small businesses and the big power consumers? Large power consumers such as
the Irvings, because of the size of their electrical demand, would have tremendous
negotiating leverage in arriving at a price for electricity in a competitive market.
Without organizing into large buying co-ops, individuals and small businesses would not
have this leverage. American experience to date has been that any economic advantage from
a competitive market tends to flow to the big players.
"Whatever the future holds, the implications of restructuring the electric power
sector are huge..." ==========
| (photo: www.realgoods.com)
The flip side of this is that the costs of competition could unfairly rest on the
shoulders of New Brunswickers. For example, in a competitive market, the debt incurred to
build Point Lepreau and Belledune would represent stranded costs to N.B. Power that would
then have to be passed onto consumers. One approach is to place a hefty surcharge on that
electricity supplied from other sources, as it runs through N.B. Power's transmission
lines, to make sure everyone bears their fair share of the debt burden. This becomes more
difficult in situations like the one under consideration by the Irvings, where they could
build their own power plant at their oil refinery to meet its electrical needs and those
of the adjacent pulp mill and shipyard. Unless that power is carried over N.B. Power
wires, the company could avoid much of its share of the stranded costs at the utility.
If the New Brunswick electric power sector is opened to a competitive market, it is
likely that some of N.B. Power's power plants will not be able to successfully compete.
Two or three could be shut down, while others may be sold to the private sector. It is
conceivable that N.B. Power would end up simply owning and operating the provincial
transmission and distribution system while purchasing power for its customers from a
variety of sources. Customers, at least the big ones, would also have the option of buying
directly from the private sector and simply using N.B. Power as their electrical conduit.
Whatever the future holds, the implications of restructuring the electric power sector are
huge for New Brunswickers, economically, socially and environmentally. Add to this the
arrival of natural gas in the province by 1999 and it is clear that we are in the midst of
setting provincial energy policy for decades to come.
The big question is whether there will be a full debate of all the issues, or will it be a
one-sided discussion led by the major power consumers in the province. That will depend,
to a large degree, on how hard the provincial government works to hear from its citizens.
No announcement has been made to-date on whether participant funding will be available to
make submissions to the Task Force or the Select Committee. Nor has there been any
indication of whether the Task Force and Select Committee will have adequate budgets to
hire the expert advice they may require.
The only thing that is clear, is that New Brunswicks electric empire is crumbling.
Issues to be Addressed by any Proposal to Restructure the Electric
(from Reinventing Electric Utilities -- Competition, Citizen Action, and
Clean Power, by Ed Smelloff and Peter Asmus, Island Press, Washington, D.C. 1997.)
Opening the electricity market to competition must not exacerbate the environmental
problems caused by this sector, and must ensure that the introduction of renewables and
other cleaner safer power sources is accelerated.
1. Goals of restructuring must be
2. How are the costs of past
investment decisions (i.e. Point Lepreau & Belledune) to be recovered. These become
stranded costs in a competitive climate?
3. How are the costs of
generation, transmission, and distribution to be unbundled?
4. How do you encourage the
development of cleaner safer power sources if the market is automatically going to prefer
the cheapest and possibly dirtiest option?
5. How do you ensure that all
classes of customers have reasonable opportunities to benefit from restructuring the
electric power sector? Costs should not be disproportionately borne by residential and
small business customers.
6. How do you ensure there is
no discrimination around access to transmission services? That is responsibility for the
control and operation of the transmission system must be independent of those with vested
financial and economic interests in power plants.
7. How do you encourage the
development of distributed power generation? Smaller-scale distributed generation located
close to load centres offer multiple benefits.
8. How do you ensure that
investments in energy efficiency (demand side management) are given the same consideration
as investments in new supply sources? Minimize incentives for distribution companies to
promote the sale of electricity by disconnecting profits from the amount of electricity
sold over the retail system.
To learn about the issues from the perspective of workers in the electric power sector,
information is available from Ross Galbraith at the International Brotherhood of
Electrical Workers, Local 2309,
138 Neill Street, Fredericton, N.B. E3A 2Z6,