Monday, 10 February 2014

POWER BLACK-OUTS AN EPIPHANY FOR FORTIS

The buzz at last week’s Pre-Conference Hearing was the sudden change of attitude exhibited by the Fortis Inc. subsidiary, Newfoundland Power (NP). 


The Company filed an Intervener Submission to the PUB which is investigating Black-Out 2014.   Its fifth question was loaded.  It was brief; but it was a bomb-shell.  It asked: 

                 5. What measures are required to ensure reliability and security of power supply to
         customers on the Island Interconnected System, including Newfoundland Power
                     and its customers, after the Labrador in-feed and Maritime link become
                     operational? (Emphasis added)


 What had Newfoundland Power implied?  It lacked faith in Nalcor’s power generation strategy. It doubted its ability “to ensure reliability and security of power…” after Muskrat Falls is completed.

The Company had broken ranks with Nalcor.  It was a watershed moment. What may have been imperceptible to many represented a seismic shift in the Newfoundland centered universe, at least as far as Muskrat Falls is concerned.  

Ian Kelly, Newfoundland Power’s Legal Counsel, summed up the Company’s position this way:

“We want to make it clear Newfoundland Power is not questioning the decisions to develop Muskrat Falls or to build the Maritime Link ... those decisions have been made.

“What the board should examine is how reliability and security of supply will be assured after the commissioning of Muskrat Falls and after the decommissioning of Holyrood.”

Am I reading Ian Kelly’s words accurately?  What did he say, again?  ”…those decisions have been made”.  In other words, we at Newfoundland Power did not necessarily agree with them but you, Nalcor, have sealed your own fate; those were your decisions!
It is well-known that Fortis Chairman and CEO Stan Marshall would not go near the Muskrat Falls Project ‘with a barge pole’. 

Fortis might have wanted to make its views public a long time ago; after all, most residents of the Island are Newfoundland Power customers. 

But, in a politically charged environment like Newfoundland and Labrador’s, such frankness even if uttered in the public interest would have earned the Company a corporate bloody nose from the more czarist of Government politicians, especially Danny Williams and Kathy Dunderdale. 

Fortis stayed mute; one of the few fully qualified groups, boasting intellectual, technical and financial heft, didn't as much as file a single word with the PUB on the Muskrat Falls Application.  It was an enormous display of cowardice.

The power ‘black outs’ of early January shook the political and commercial foundations of the Province.  There was no good way to ‘spin’ it, though for a short time the Premier and at least one VOCM Open Line Host tried to claim all would be fine when Muskrat comes on stream.  How could a group incapable of getting its summer maintenance program completed by mid-winter retain a shred of credibility for a Project enshrouded in secrecy?  

The ‘black outs’ constituted a political and commercial debacle; they shredded the tattered remains of the Dunderdale Premiership and ruined a long record of confidence in the security and reliability of our power system.

I drove across the City late on the night of the explosion in Hydro’s Holyrood switching yard.  A friend had asked me to help him retrieve some Jerry cans. Fuel was in short supply for his generator.

I stopped, just for a moment or two, above the Avalon Mall, on Thorburn Road.  I was able to see much of St. John’s and Mount Pearl in virtual darkness.  The sense of isolation, of desperation, of the entire Metro Region was palpable. 

A chill ran down my spine as I pondered the possibility that the outages might go on for many more weeks.  How would people manage? What would such a massive disruption do to our economy?  The questions were imprinted on the dark sky, on the blackened street lights, and in the clouds of cold snow that blew like white dust over the windshield. 

The Open Line Shows ran back-to-back; most callers used the corporate names, Nalcor and Newfoundland Power, interchangeably.  People made no effort to differentiate which corporate entity was responsible for the mess.  They were frightened.  They had a right to be.

But, I suspect, few were as frightened as the senior people at Fortis and Newfoundland Power. 
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Yes, they were only the ‘distributer’; the company responsible for making sure that the ‘juice’ delivered to them by Nalcor arrived at homes and businesses safely and without interruption.  How could they be held responsible, if Nalcor failed to manage the generation system? Who could argue with such a proposition?

But, would those arguments withstand scrutiny if the Labrador Island Link (LIL) collapsed following a winter’s sleet storm in 2018, a mere four years from now?  What about the myriad other reasons Muskrat could come up short? 

Would Fortis be so easily let off the hook having failed to break its silence?  Was it not a knowledgeable witness to the conception, design and construction of Muskrat Falls? Where would it find an ounce of credibility having deferred to people like Williams and Dunderdale, to secrecy and deception?  

In this light, one begins to see why Fortis had no choice but break ranks with Nalcor.  

No Corporation is insulated from its community of interest; even in the real world of business, corporate responsibility is not just about legal definitions or mere philosophical notions of accountability.  Sometimes the public interest simply cannot be disentangled from corporate self-interest. This was one of those moments. 

Little wonder Fortis executives had second thoughts.

 Continued silence would have constituted a relationship bordering on complicity. 

Fortis had to disassociate itself from Nalcor.  Its subsidiary, Newfoundland Power, could not survive another calamity like Black-Out 2014 (or worse).  The Company had to find a way to off-load its burden.  The PUB offered the perfect opportunity.  If the Agency failed to take the cue, Fortis could always take credit for trying.

That proposition may be moot, but one thing is certain, the option of Fortis’ continued silence evaporated in those cold, dark nights of early January.

In contrast, Nalcor (the Crown Corporation ostensibly owned by the people of the Province) and its subsidiary, Newfoundland Hydro, do not see it that way.  Even against the back drop of power outages in which seniors were herded into ‘warming’ centers, where residents with no secondary heat source suffered personal discomfort, damage to water pipes and property, against business closures and industrial shutdowns like Corner Brook Paper and the Come By Chance Refinery, against all the expense and suffering, what did Nalcor say to the PUB?

It demanded secrecy again, just as it has always counted on the former Premier and the current one to guarantee. 

Lawyer, David MacDougall spoke to the PUB on behalf of Nalcor’s Newfoundland and Labrador Hydro:

“With respect to the fifth (issue) proposed by Newfoundland Power, regarding the potential review of measures to ensure reliability after commissioning of Muskrat Falls and the Labrador-Island Link, we believe that matter is beyond the appropriate scope of this review”. (Emphasis added).

Meanwhile, Premier Tom Marshall, having promised that his Administration will be different, maintained his silence.  The re-set button is as corroded as it ever was.

A lax media forgets to ask the new ‘Marshall’ if he still supports Nalcor’s style of governance; they fail to ask if he will intervene, not with the PUB but with Ed Martin, to remind him that the damage done to democratic government must end.

The media might get around to that sometime.

Meanwhile, Fortis and Newfoundland Power have had an epiphany.

Even the Consumer Advocate gave his support to an enlarged investigation.

The PUB deliberates.

Is this progress? 

I don’t know.

But, there is more reason for hope.

6 comments:

  1. Des. This is a very powerful post. Perhaps one of your best, on its pure simplicity. What is Nalcor trying to hide.

    The question for me is, and always been, are we getting access to the power in winter which was assumed by Nalcor when they determined MF was the lowest cost option

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  2. Fortis, by its' silence, could in fact be considered complicit with both Nalcor and the Williams/Dunderdale administrations on MF. I've been asking these very questions for at least two years. Thanks for calling them out Des.

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  3. I suggest few people know the difference between Nfld Power and Nfld Hydro. Nfld Power has the public face and send out the power bills, and upkeep the local distribution lines. I suspect 90 percent of the population think they are also the source of all or most all of the generation And Nfld Power have the most to lose from customer good will, when serious outages occur.
    This crisis was so serious that Nfld Power fears the fallout of more crisis events down the road. What will happen to their surveys showing 96 percent customer satisfaction. now and post Muskrat Falls. Reliability for power is a shared responsibility. Should Nfld Power get blame for government folly, with MF power being unreliable.
    But Nfld Power have been in bed with Nfld Hydro on the Take Charge program. A program that gives no meaningful benefit to residential consumers in energy savings, But worse, the program gives no benefit to help reduce the winter peak load. Nfld Hyrdo keep building the costly new generation infrastructure, increase the rates on the public, Nfld Power just increase their profits and revenue by just being the distributor of this expensive power. Why speak up against this approach. Why take the lead in reducing winter peak loads with robust efficiency -conservation plans. Such plans, while beneficial for the homeowner, can also reduce and impact their profit .Better to stay silent. Go lockstep with Nfld Hydro on the Take Charge program, which ignores the growing winter peak load. Do nothing and hope for the best. On this they can`t divorce themselves from Nfld Hydro. The were in bed together, having the worse Plan In north America to shave our growing peak load, while having a load profile and climate others would envy, in terms of what could have been done, and needs to be done, to reduce the risk of more outages. Winston Adams. Logy Bay. .

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    1. There is no such thing as "Nfld Hydro". Maybe if people stopped referring to the non-existend "Nfld. Hydro", there'd be less confusion with Nfld. Power.

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  4. Once again, your blog has raised the disturbing spectre of corporate and government complicity, insofar as Newfoundland Power's unwillingness to challenge their rationale on Muskrat Falls and to allow this sorry state of affairs to develop. By not challenging their absurd assertions, Newfoundland Power can be considered complicit in the development of this disastrous project.

    Yet, they will be held to task if power supply is not reliable or secure in the wake of Muskrat Falls, because they knew the implications of not having a reliable stand by system once that project goes on line. After all, only a fool would assume that these power lines, extending over difficult terrain and subject to some of the foulest weather on the planet, would NEVER go down and for how long. A week or two weeks is not out of the question and what would happen then, in the event the Avalon experiences a cold snap and there is no Holyrood or other themal system in place. From my perspective, it gives the lie to the alleged purpose of Muskrat….namely, to rid the province of Holyrood…as some sort of thermal is both essential and prudent.

    Further, NALCOR's neglect of vital infrastructure makes reliability and security of supply even more unlikely going forward.

    Yes, Newfoundland Power, the decision has been made but it is still not too late to unmake it and pull the plug while the PUB undertakes a thorough review, as it should have been allowed to do prior to sanctioning. It is a scandal in the making and many of our current politicians and business elite will have much to answer for in about 5 years.

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  5. As for Holyrood closing and being decommissioned.....Holyrood consists of three large generators, and the associated thermal oil fired equipments that make the steam, and the turbines that are driven by the steam, which in turn makes the generators spin, all in one big structure and the three large smoke stacks.
    It's location, on the Avalon has two great advantages; 1. It is close the the large loads at St Johns and others on the Avalon. Therefore transmission losses are likely only 2 percent versus 10 percent from Muskrat falls. The losses is power produced that never gets to the consumer, so is inefficiency. 2. Reliability, avoiding the vulnerable ismis of the Avalon, where icing can, and has taken down the 230KV lines. MF has a whole array of obstacles in terms of reliability, and so is far inferior to Holyrood, (assuming Holyrood has proper maintenance and upkeep).
    The plan for Holyrood is too keep some of those assets. But the steam generators and turbines will not be needed. But the huge generators will be needed, but not for power generation. They will be used as "syncronous condensers" These huge generators will rotate and run freely, electrically connected to the grid and at a speed of 60 hz, or 60 cycle per second. The purpose is to stabilize the frequency and voltage of our grid . It is essential that the frequency not deviate much from 60 Hz, as all the customers motors and appliances are designed to have this speed. If the speed goes to 59 or 61 it is a serious issue, and may cause a cascade of outages. The big generators are made from a lot of steel and copper and have a lot of rotating inertia. And they can run without consuming any energy, once disconnected from all the other mechanical apparatus. This inertia aids the stabilization of the electrical system, from a fault elsewhere that may change the voltage of frequency, so these big generators can use its inertia to help keep the systems together, electrically speaking. So I assune the building, the switchyard and lines in and out will stay put, and will require its own continued maintenance and upgrades when needed.
    The question of MF reliability begs the question of the wisdom of decommissioning the other components of Holyrood, which is necessary for a functioning thermal generation plant.
    Gas turbines are much more efficient and fast responding. They allow better efficiency when connected to wind generators, which in itself has proven extremely efficient in recent high wind condition, reaching 87 percent of capacity on Jan 4 instead of the average 43 percent.
    It seems Holyrood as a generation plant will be essential. The existing has about half it useful life left, but is inefficient and doesn't work well with wind generators. Past time to assess this properly, in light of the recent brown outs.
    it seems wise to have gas turbines that are fast acting in emergency conditions and add efficiencies to wind generators,and to also add more wind generators. And with increased efficiencies for home heating (essential to lower the winter peak load)..... the whole idea of a need for MF for the island seems a folly. A proper assessment a few years ago would have reached this conclusion. Winston Adams Logy Bay

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