Tuesday, 15 March 2016

OFFICE OF CONSUMER ADVOCATE: EDIFICE TO WORTHLESSNESS

‘If you are hunting bears, don’t go chasing rabbits’ is a familiar warning not to do something far less important than what you hope to achieve. The metaphor is perfectly applicable to those who devote great energies to minor political issues, leaving the larger ones virtually untouched.

Talk of austerity will expose many examples. Disapproval towards the Mayor of St. John’s, who is on a junket to some cruise line conference at a cost in the neighbourhood of $6,000, is one. The trip is winning more press than disclosure he had negotiated, at least initially, with Danny Williams for a 20 acre parcel of his real estate, reportedly having a price tag of $8.5 million; a secretive process that kept others at bay. The deal did not get finished. But that his head wasn’t called for or that guidelines at City Hall weren’t immediately strengthened to prevent such abuses of power, is proof of vastly misaligned public policy priorities by both the media and people, generally.

The Premier and his Fisheries Minister have been chided for attending a Fisheries Exhibition, too. Amidst a $2 billion deficit on current account, minds need to be turned to a plethora of bigger issues involving big money. It’s tantamount to tracing rabbits; it won’t get you real change.

Of course, everyone has pet peeves.  As one citizen, mine is the Office of the Consumer Advocate to the PUB. I am hoping the Minister of Finance will wield the Budget axe, and do away with this edifice to worthlessness.

I suggest we can’t afford paying hundreds of thousands of dollars in costs and fees when the Muskrat Falls Power Purchase Agreement (the “take or pay” contract) has made the Office irrelevant for the next fifty years. 

Besides, this Consumer Advocate has rendered it a useless appendage anyway, making it mere detritus among the low hanging fruit ideal for plucking in the race to stave off insolvency. $307,410 last year and $860,976 the year earlier isn't small change (see excerpt from PUB 2014-15 Annual Report below). 

While the sums are accounted for in the Financial Statements of the PUB, the charges are embedded in your monthly electrical bills.




An advocate is a “champion, a crusader, a fighter”, in this case, for the interests of rate paying consumers of electricity.  But Tom Johnson is none of those things, though he is amply paid for the role.

Johnson was a disappointment from the get go.

He was the one who couldn’t wait to please Cathy Dunderdale and Nalcor CEO Ed Martin, going so far as to urge Muskrat Falls sanction, even prior to Manitoba Hydro International reporting. Johnson concluded the project represented “the least cost option of the two alternatives examined”; a thesis so fundamentally wrong that an Advocate with courage would have admitted his bad judgment long ago. His desire to not be offside with Nalcor has aided an emerging energy and financial debacle.

Imagine that the Consumer Advocate is among the standard bearers whose acquiescence to power corrupted will help augur in a new era in which the cost of electricity will be double current rates; a situation that will not just injure people in a personal way but also drive away business and industry, which are always sensitive to input costs.

This is advocacy? For the consumer?

He sided with 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, in the PUB’s investigation into DARKNL. 

Now, ratepayers are in for a bit of a screwing as Nalcor and the Consumer Advocate are, again, found on the same side.

Recently, Nalcor filed an Application with the PUB seeking approval to levy $33.3 million on ratepayers for the thousands of liters of diesel fuel it forecasts will be needed to offset low water levels in its hydro reservoirs, in 2016.

He blurts out to a CBC Reporter: “…it's not abnormal for Hydro to pass the "reasonable and prudently incurred costs" of producing electricity on to ratepayers...” He adds: “We have no control over how much precipitation falls from the sky and that's generally considered to be fair". Yet, by any standard Nalcor has failed to prove its case in the current PUB Application, as a post on this Blog.recently detailed.

The Consumer Advocate exhibits a similarly passive view about Holyrood.

Tom Johnson told CBC recently:  “the very time that you'd like to be able to see Holyrood given a little bit of a break, we're seeing Holyrood and these other assets are being called upon more heavily". 

Johnson speaks of Holyrood as if it is an old dog, one that, if given a rest now and again, would perform better. He seems unaware Holyrood, Hardwoods, and NL Hydro’s other facilities, represent a collection of mechanical assets which require regular and competent management and maintenance, and nothing more. At least, that is the view of Liberty, an independent engineering Consultancy, hired by the PUB. Liberty found that a “continuing and unacceptably high risk of outages from such causes remains for the 2015-2017 winter seasons”.

The Consumer Advocate forgets that critical facilities, which consumers and business rely on, are only now being scheduled for maintenance, notwithstanding the vast increase in demand for power, especially since 2010. 

Again, the people’s champion girds himself to confront the PUB as might a kitten chasing a mouse but with the attitude and intellectual ferocity of neither.

PUB Chairman Andy Wells may as well bring his “smelly” to the docket when Tom Johnson stands up to discuss Nalcor’s Rate Application.   
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Johnson is content with Nalcor’s “low precipitation” story, unable to connect the dots to the parade of fuel tankers with Hydro’s refusal to deal with unfettered residential and commercial electrical demand fueled by power thirsty baseboard heating. He doesn’t mention the 73 megawatts the Williams Government committed to Vale in a deal where the Province undertook the capital cost of providing this large block of power or argue that the cost has no place in the rate base.

He didn’t even conduct a basic review of Nalcor’s hydrology claims; ‘we have no control over precipitation’, a lazy out for a meek Advocate, to be sure.

As it stands, ratepayers have no one in their camp; the Consumer Advocate confirms this is a place where arrant, misguided, and possibly conflicted policymakers are excused.
This Consumer Advocate is a waste of money; money that is needed for a good many other uses.

Forget the rabbits, at least for now. On a fiscal level, the public needs to place big game in the crosshairs. 

The Minister of Finance can have Tom Johnson's budget.

Ratepayers won’t even notice.

9 comments:

  1. Well said Mr. Sullivan, but will anyone listen? Unfortunately, I think not! Everyone is protecting their own little piece of turf.

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  2. "the vast increase in demand for power"????...

    Just to be clear.

    We used more energy in 2004, and been below that level every year since then. And in 2015? Still almost 1% below our 2004 high.

    Having said that, our 'peak demand' in 2015 (which occurs for a few hours once a year) was 6% higher than it was in 2009 --- up 104 MW (and how much of that was due to Vale which needs 75 MW at capacity --- a one-time increase)?

    All in all, our energy use is still less than our all time high and our additional peak demand less than the added 110 MW combustion turbine recently installed at Holyrood.

    Maurice Adams, Paradise

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    Replies
    1. That's all you took from this post...?

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    2. Not at all, Riggs. I just happen to agree with most all of what is said. However, I do not agree that the position should be abolished. There should be more independence in the selection/appointment process. Hope that makes you happy. Maurice

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    3. Nevertheless, Maurice, Liberty has recommended higher standards to avoid outages. This required a new (used)120 MW gas turbine, instead of the 60 MW hydro had planned for. Yet even this was insufficient, as Hydro has had to run small diesel, 2 MW each, generators at Holyrood 20 times this winter, part due to no third line available yet to the Avalon, and also low rain/snow issues, and some generator problems (holyrood and Hardwoods) It confirms poor management and poor maintenance and failure to curtail peak load growth (via efficiency... like heatpumps for winter heating, as you use, which also saves on water use for generation)

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  3. Newfoundland and Labrador Hydro.

    NL != Newfoundland.

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  4. All one has to do is look at the timid latest version of the Conservation Plan for 2016-2020, which is part of the present rate increase application. The power companies are masters at doing nothing to help the homeowner save on energy costs or reduce peak demand. Our winter peak demand, is about 3 times summer demand, and as such the worst in the whole country, due to the inefficient baseboard heating. Why is this costly for the consumer? because we have to burn fuel to meet this winter load and the high cost to build and maintain these thermal power plants. We are 88 percent green (hydro ) energy, but at times (short times) need 40 percent to come from thermal generation to meet this peak load. With so much water energy, why is it that our power rates are 25 to 50 percent more than other provinces with substantial hydro power (Quebec, Manitoba, BC). Because we have to build and maintain these thermal plants, not just for emergency back up, but for firm power needs at peak times. And one in the power business would think it stupid not to be trimming our winter peak load. The most effective way is with efficient heating and other cost effective measures. This is addressed under the "conservation plan", and our advocate there is Mr Johnson, who seems to rubber stamp the power company's desire not to reduce revenue for the companies. Mr Johnson is either with the consumer or against them. The effort to reduce energy use and peak demand gets almost no attention from Mr Johnson. He is therefore against the homeowner and with the power companies who want to maintain and increase revenue. Little doubt about that.

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  5. Heard Des on VOCM.... and Johnson, who was forced to respond. Was waiting for Johnson to indicate the new initiatives that would be coming soon to save households on their power bills via efficiency rebates.... but not a word on this. Des mentioned that Johnson's billings were a levy on the power bills. Of interest, the similar high charges from "Take Charge" are also a levy, administration and other costs that are passed along on the power bills, yet achieving little for customer savings. If it cannot be meaningful, perhaps the Take Charge program should be deleted, as it is largely a joke as presently structured. Does Johnson have a heatpump in his home, of the high efficiency type? Does he set an example? Got my power bill yesterday, with a flyer attached indicating the financial situation of the province, saying it is vital that all residents , as well as "business" need to tackle this situation. So will Nfld Power cancel this rate increase, to do their part, or just other business firms are vital for tackling this?

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  6. Consumer advocate...worthless advocate for the consumer?
    I recall I calculated previously the value of the average energy savings per customer from the Conservation Plan that is paid for from a levy on the power bills. The saving was equivalent to putting a piece of plastic over one window size 4 x 4 ft. There are many hundreds of thousands of dollars paid to the power company staff in salaries, expenses and costs each year to achieve such HUGE energy savings for the customers. And Des, you do not appreciate the effort of the Consumer Advocate for this benefit? If not for the Consumer Advocate the rebate for insulation would be scrapped, and the rebate for energy efficient windows also.... whoops, energy efficient windows is now off the list. Winston Adams

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