Energy Probe

Lisa Hrabluk
Saint John Telegraph-Journal
June 19, 2002

The ties that bind government to energy markets are beginning to loosen.

Yesterday in Saint John, Fredericton and Washington, D.C., things happened that will change how New Brunswickers buy, sell and use energy in the years to come.

Things got started in the Delta Brunswick Hotel’s ballroom in Saint John’s uptown, where lawyers for NB Power and Atomic Energy of Canada Limited came face-to-face with an old nemesis – Tom Adams, the executive director of Energy Probe, a Toronto-based consumer advocacy group that has long fought the forces of nuclear power.

His opposition to NB Power is two-fold; he wants the utility to get rid of Point Lepreau and he wants the New Brunswick government to rid itself of NB Power and its $2.9-billion debt.

Lawyers for AECL and NB Power spent about an hour trying to discredit Mr. Adams and his opinions during his morning appearance before the Public Utilities Board as it prepared to wrap up hearings to examine the Point Lepreau application.

They pointed out he isn’t from New Brunswick, that no one from the province sits on Energy Probe’s board and that – horrors of horrors – he’d be against nuclear power regardless of how much a retrofit would cost.

“If Point Lepreau could be refurbished for nothing, you’d still be opposed to it,” said NB Power lawyer David Hashey.

But in reality, it doesn’t matter whether Mr. Hachey and AECL lawyer Bernard Miller were able to discredit Mr. Adams before the PUB. The man from Energy Probe has already made his mark.

His ongoing public attacks contributed to a change of opinion in New Brunswick that culminated in last month’s announcement that NB Power is to be broken into four companies and private investors sought for Coleson Cove and Point Lepreau.

Mr. Adams wasn’t the only person sounding the alarm about NB Power, but he was one of the only ones willing to speak publicly, particularly after June, 1999 when Norm Betts – another staunch critic – joined Bernard Lord’s cabinet and fell silent on NB Power’s fate.

Although he doubts the government will find a partner for Point Lepreau, Mr. Adams likes the idea of breaking the corporation up and the government’s continuing move towards wholesale energy competition.

The province took a major step towards that a few hours after Mr. Adams’ morning appearance, with its own event in Fredericton.

New Brunswick’s Market Design Committee – the group responsible for figuring out how the wholesale market will work – released its final report.

Its recommendations included setting aside a portion of the electricity produced in New Brunswick for customers either unwilling or unable to participate in a competitive marketplace.

This power, known as a heritage pool, will be the amount of power used by all NB Power customers in 1999, about 61 per cent of the maximum amount of power able to be produced in the province.

That heritage pool will be produced by NB Generation, which will sell it to the newly created NB Distribution at a price set by the government.

NB Distribution will then sell that power to consumers.

Any portion of the heritage pool not sold this way – known in energy parlance as a standard offer service – will be sold by NB Generation either through New Brunswick’s wholesale market or as an export to other provinces or the U.S.

The aim of the committee is to prepare NB Power for competition and ensure it does not have an unfair advantage over its competitors when the market opens next April.

They might get some ideas on how to accomplish that from a sobering report released yesterday in Washington.

The General Accounting Office, the investigative arm of the U.S. Congress, has concluded that the American regulatory body, the Federal Energy Regulatory Commission, remains ill-prepared to properly regulate and protect consumers from high electricity rates as the U.S.’s energy markets become increasingly competitive.

Of most interest to New Brunswick may be the report’s conclusion that FERC lacks adequate enforcement power to deter anticompetitive behaviour because it can’t impose meaningful penalties.

In a province where concern that one major corporation could dominate a market is never far from consumers’ minds, the Congressional study may stand as a warning of things to come if we fail to tread carefully as we venture down this deregulated path.

Bruce Bartlett
Saint John Telegraph-Journal
June 18, 2002

The economy of Southern New Brunswick would be devastated if the 700 jobs at the Point Lepreau Nuclear plant are eliminated, the Public Utilities Board heard Monday.

“I believe closing Lepreau, if they don’t refurbish, would have as big an impact on Saint John as if you closed both the pulp mills and the refinery,” said Ross Galbraith, representing the International Brotherhood of Electrical Workers.

Closing the Lantic sugar refinery in Saint John created a huge outcry, but it employed only 20 per cent of the number of people working at Point Lepreau, he said.

If a natural gas plant is built to replace the nuclear plant it would only employ about 40 people. But the cost of running the gas plant would be about the same because of the higher cost of natural gas compared to nuclear fuel.

The big unknown in comparing the costs of the two alternatives is how much the price of natural gas will rise over the years.

“No one can predict with any certainty what those fuel costs could climb to, any more than we could predict 25 years ago what gasoline would be costing us today,” he said.

When the technology for combined cycle natural gas plants first came along it was highly praised. But since then demand for natural gas has risen and so has the price. The plans of many U.S. utilities to build gas-powered generators are now on hold, said Mr. Galbraith.

The jobs at Point Lepreau contribute $50 million annually into the economy. There are approximately 1,100 indirect jobs tied to the nuclear plant that pump an additional $20 million into the economy, he said.

Nuclear plants also have the advantage of not contributing to greenhouse gases. NB Power has produced 30 per cent of its electricity from nuclear power since 1983. If it had burned oil, it would have consumed 130 million barrels, he said.

The nuclear waste produced at Point Lepreau is all contained at the site and will eventually be stored somewhere by the federal government, he said.

“No one has yet figured out a way to dispose of the millions of tonnes of greenhouse gases that are pumped into the atmosphere by non-nuclear generating stations,” said Mr. Galbraith.

He also submitted a review of the project by Myron Gordon, an economist from the University of Toronto, who favours the nuclear option.

Mr. Gordon’s report rebuts several points made by Tom Adams of Energy Probe in Toronto, who is expected to give evidence today at the utilities board hearing.

Mr. Adams filed evidence with the board saying that NB Power has only paid down its debt by $74 million annually over the past seven years. Mr. Morton says financial statements show debt reduction was at $116 million per year.

Mr. Adams has also said a failed refit at the Pickering nuclear plants was the main cause of Ontario Hydro’s 1997 financial collapse.

Mr. Morton says both claims are false. The refit is proceeding with some delays and Ontario Hydro was starved of cash by the provincial government, which had decided to privatize it.

“The four reactors at Pickering A are now expected to start producing by the end of 2002 and the $1.9 billion investment in extending their life is still expected to be very profitable,” he wrote.

The hearing into the economics of refurbishing Point Lepreau is expected to wrap up this week. Intervenors are scheduled to sum up their arguments today after Mr. Adams presents his evidence.