NB Power was questioned Tuesday about its plans to cut the amount of renewable energy it sells to customers in New Brunswick to 35 percent over the next year, despite the province’s law requiring that at least 40 percent of the energy supplied be green Energy.
“These are extraordinary times and they call for extraordinary action,” said Brad Coady, executive director of business development and strategic planning at NB Power.
NB Power is in the middle of a two-week hearing in Fredericton over its plan to pass an 8.9 percent rate hike on April 1.
On Tuesday, company executives said internal budgeting over the past year initially revealed the need to call for a 12 percent increase, prompting a search for cost-cutting measures.
Coady said one of those measures is to calculate what would happen if the utility failed to meet its legal obligation to supply a certain amount of renewable energy.
“We looked for creative ideas, like what if we didn’t have mandatory constraints in our modeling,” Coady said.
He said reducing renewable energy shipments to customers by nearly 700 gigawatt-hours of electricity below the legal minimum shows a $14.2 million savings.
It was decided that it was worth ignoring the regulation at least when preparing the budget.
“We need to creatively explore every opportunity to reduce costs in this utility rather than just customers having to fill in the gaps,” Coady said.
EUB lawyer Abigail Herrington questioned the plan in detail, raising concerns about whether the board could approve a proposal that openly violates a provincial environmental ordinance.
“NB Power is aware of its requirement to ensure that 40 percent of all its electricity sales in the province come from renewable sources, is that correct?” Herrington asked.
“Yes that’s right.” said Coady.
He suggested that NB Power will look at ways to increase the number to required levels later in the year as renewable energy offers from Quebec Hydro or elsewhere become available.
This year, renewable energy has grown to an estimated 51 percent of what is provided in New Brunswick, thanks to higher-than-expected water flows through the province’s levees and worse-than-expected performance at the Point Lepreau nuclear power plant.
This required increased imports of hydroelectric power from Quebec.
The utility suggested similar events next year could solve the problem, regardless of the budget projects.
Otherwise, NB Power acting president Lori Clark said she had been in touch with the Higgs administration to rewrite the regulation to allow the breach for at least a year.
“It is our commitment that we will work to find ways to comply with this legislation,” Clark said.
One idea being discussed with the province is to relax the requirement to achieve at least 40 percent each year in favor of a three-year rolling average.
“I think it makes more sense to look at this in a three-year window,” she said. “That’s one of the discussions we’re moving forward with the shareholder (Province).”
