Monday, 8 September 2014

CONSUMER ADVOCATE SHOULD BE TAKEN TO WOOD SHED

The Consumer Advocate to the Public Utilities Board (PUB) is not on your side.

What other conclusion can be drawn from the actions of an Office that gives so much energy to providing cover for Nalcor's devotion to secrecy?  Newfoundland Power, another paragon of conflicted loyalty, is also unsure of the constituency to whom it owes the greatest duty.  It, too, needs a comeuppance.

What is going on?

The PUB has convened a “Paper Hearing” to deal with a request from Newfoundland Hydro (NLH) to quash the requirement that Nalcor answer a list of questions submitted by the Grand River Keepers (GRK) of Labrador and Danny Dumaresque.  Both GRK and Dumaresque are interveners in the PUB’s investigation into DARKNL.  The PUB is compiling information for Phase II of its Report dealing with the “adequacy and reliability of the Island Interconnected system over the short, medium and long-term…after the commissioning of Muskrat Falls”.

Nalcor does not want to answer GRK’s and Dumaresque’s questions.  It is telling the PUB that they are not relevant to the issue it is investigating.

What is wrong with those questions? Let’s take a look.

The GRK is seeking proof that Nalcor’s latest cost overrun of $800 million will result in “average electricity bill increases of $8 per month over what was projected at sanction” as CEO Ed Martin stated.  Ed Martin does not want to show the public his arithmetic!

The Group also wants a final version of the Power Purchase Agreement which includes, among other things, the schedule of power capacity available to the Island electrical system from Muskrat. Nalcor has made big "firm" commitments of power to Nova Scotia and, lately, to Alderon.  Nalcor can't have its cake and eat it, too; GRK rightfully asks, how much is available and when.

The GRK demands information on the Water Management Agreement; in particular data regarding the water flows at Muskrat Falls and irregular production at Churchill Falls.  

The GRK points out that in, in the absence of the WMA, which is now being challenged in the Quebec Superior Court by Hydro Quebec, Nalcor would lack advance knowledge of the flows from the Churchill Falls facility; at Muskrat Falls, it would have to “chase the flows”.  That means Nalcor is forced to produce energy as water becomes available, as opposed to when it is required; possibly spilling water, at Muskrat during the Spring run-off.  Such an outcome would impact Nalcor’s capacity and commitments, especially during the peak demand winter period.

The GRK asks Nalcor how it will deal with an extended outage in the event of a failure of the Labrador Island Link (LIL) and how it will replace the power in such circumstances. 

The GRK seeks answers regarding the North Spur "Quick Clay" stability problem, which would be potentially catastrophic for the entire electrical system and for the residents who live downstream, in the event of a dam break.  ("Let's Hear From A Real Expert", is a recent Letter to the Telegram Editor by Engineering Consultant P.C. Helwig It is a well argued view that Nalcor V-P Gilbert Bennett is not the person to whom we should be depending for expertise on the North Spur.)

The GRK is hardly off topic when it asks Nalcor if it has an Emergency Preparedness Plan for the North Spur, either. Do you really think the residents of Goose Bay and Mud Lake want the PUB to scratch that one!

The GRK also wants critical information released regarding the design and construction of the LIL. Should we not be concerned that, in the midst of the Alpine conditions that prevail over the Long Range Mountains in winter, the LIL might fail in a storm?

None of the questions are superfluous or lack sound intentions. Most relate to the reliability and security of our power supply in a fundamental way. 

Indeed, Mr. Dumaresque’s questions are equally compelling; many deal with issues similar to those raised by GRK.

What has the Consumer Advocate so frightened that he needs 8 pages to support Nalcor’s contention that the PUB should dismiss questions raised by the few citizens willing to stand up to a secretive Crown Corporation?

It is not as if the Consumer Advocate has been a vigorous champion of the public interest.  Indeed, it is not as if he proposed, in the first place, that the PUB broaden its investigation into the adequacy and reliability of the power system in the post-Muskrat period or offered any but tepid support to those interventions.

The Consumer Advocate argues, in defence of Nalcor’s Motion, the interveners' questions “…would prolong and complicate…and prejudice the inquiry and those participating in it”.

"Prolong", yes. "Complicate" and "prejudice"? No. But the questions might bring some much needed clarification to specific on these matters; the truth would be good.

The PUB is the only independent Agency mandated, by law, to require disclosure from our utilities.  The Consumer Advocate’s intervention is terribly unwise and raises questions as to just how badly the Office is conflicted.

The Advocate should be seeking to expand the PUB’s Inquiry. He should  be demanding that every issue, under the sun, is exposed in order to limit the prospect that DARKNL is ever again repeated.

Did he not read the “JM” post on this Blog, Monday past entitled, THE SNOW JOB?  JM offered solid evidence that Nalcor withheld vital information from the PUB, of its intention to commit of 167MW power capacity to Nova Scotia, including during the peak winter period.  JM revealed that Nalcor had also failed to reflect that obligation in the determination of Muskrat, as the lowest cost option.  

Among other things, it failed to disclose the requirement for 300 MW of power over the Maritime Link to meet local winter peak demand or who will be held responsible for paying for that power.  

The DG-2 Reference to the PUB, in 2011, was a charade; if the Consumer Advocate is not prepared to hoist Nalcor on its petard for this deception, how can we assume that the Consumer Advocate's Office is anything but complicit in Nalcor's games?  

Why would this important Office continue to insist on secrecy for a Crown Corporation that cannot be trusted?
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Related Reading:            THE LAP CAT HAS NO CLAWS
  
                                         THE SNOW JOB
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What of Newfoundland Power?  The Utility’s leadership screwed up a modicum of courage, earlier this year, siding with Pre-Hearing interveners, including this scribe, who asked the PUB for an expanded Inquiry.  Now, it has gotten cold feet.  NP feels a need to be ‘cheek to jowl’ with Ed Martin, once again. 

Is the Company worried because, just as the Government "mistaken;y" expropriated the Abitibi assets, including the Star Lake Hydro dam (partly owned by NP's corporate parent "FORTIS"), it can as easily confiscate the assets of Newfoundland Power “by design”?

If Newfoundland Power does not possess the fortitude to insist, publicly, that Nalcor’s claims regarding the “adequacy” and “reliability” of the Island’s electricity generation should be evidence based, that the customers’ interests are paramount, on what basis does it merit our loyalty and support, in return?

This week, the PUB, an Agency that demonstrated its capacity to recognize a “Snow Job”, during the DG-2 Muskrat Falls Reference, will continue its "Paper Hearing".

As the under appreciated and vital Agency that it is, the Chair may wish to give the Consumer Advocate  a lecture about his public duty and, to Newfoundland Power, a reminder of its responsibility to those for whom the ‘bill’ tolls. 


I am hopeful the PUB Chairman’s long recognized bark still has bite.
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Note: Look for PART II of THE SNOW JOB by "JM" on Thursday, under the Title 
"A VISION BUILT ON DELUSION".

2 comments:

  1. A little simple arithmetic shows that an $8 per month increase as a result of an $800 million overrun is not including all the costs. It works out to $96 per year and at 280,000 customers including all the tiny one room connections, it is $27 M in revenue or 3.36% of the capital involved. The cheapest money is the loan guarantee at 3.8% and each bit of overrun obtains a higher interest rate so the best rate for this $800 M would be in the 5.8% range. Considering the principal has to be repaid pushes it to more than double the $8 per month. The average family household is a lot bigger than the tiny one room connections so expect it to cost you about $20 per month at least. The next $800M overrun will cost you a lot more as the risk increases to the lenders.
    The lame Consumer Advocate thing, who is really nothing more than a patronage appointment, was well known from the early days when he endorsed the Muskrat project with little info request.
    It looks like we have this project for better or for worse so the bigger issue to me is how do we plan to deal with Quebec if and when they win the Water Management Agreement. Quebec will dictate when MF operates so there will need to be arrangements to ship power out through Quebec and also buy back or just spill water at times and operate thermal at other times. Gilbert Bennett, in his article on Canadian Energy megaprojects, talks about the increase in energy storage capacity from 2.5 TWH (island storage) to 22 TWH including the Upper Churchill. That is correct except that Hydro Quebec may control 90% of that storage so who will make the money on what is in the "energy warehouse"?
    The only benefit that I can see of hiding the full disclosure at this time is that it will certainly hurt the sitting government more. It maybe time for a Plan B and I can't think of anything else other than to start dealing Hydro Quebec.

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  2. This particular consumer advocate has not defended the interest of the Consumer. One just has to compare our own CA's performance to that of John Merrick in Nova Scotia. John Merrick defended the rights of the consumer. He asked indepth and challenged questions, and was capable of independent thought. Our poor CA has not demonstrated this last characteristic.

    A strong CA in Nova Scotia was able to secure additional concessions by Nalcor in the securing of additional surplus power into the future.

    Our CA in Newfoundland spends taxpayer money and repeats others arguements. He should be pusing to be asking these same questions which are now he is attempting to suppress.

    This would only occur in our banana republic.

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