Monday, 14 May 2018

HYDRO SPINNING A TALE FROM BOTH SIDES OF ITS MOUTH

Written with copious notes from PlanetNL
Few members of the public seem concerned that Hydro is pursuing two rate hikes, the equivalent of 18.6%, to be applied over the next two years. In addition, Hydro wants the PUB to charge for Upper Churchill Recall power on the same basis as if it were generated by oil at Holyrood. Hydro wants a “deferral account” for “rate mitigation” which, for reasons described by PlanetNL, may turn out to be small dollars anyway.
Public quiet over the Hydro rate application suggests they may have already become numbed to it all. Having been deceived by their own government(s) since 2010, and having perhaps learned that fake news is not just an American concept, it is possible that, rather than get mad, they plan to get even. Installers of heat pumps have a bright future in this Province.

Still, an 18.6% increase in power rates is no laughing matter, especially when Muskrat — in Ed Sullivan parlance “the really big shew” (sorry Millennials) — is only two years away. Perhaps people think that, ultimately, the political geniuses we elected will find a way to make the problem disappear. Good luck with that!

For certain, the correspondent known on this blog as PlanetNL has resisted all vapours of falsity emanating from Nalcor and from the Ball Government, too. He’s a numbers man. No palliative will mollify either his irrepressible soul or suppress the vigour with which he pours over spreadsheets.

When you read what he wrote to me the other day, you’ll start to appreciate the pressure I am constantly under. I don’t know, dear reader, how I can continue to maintain a steady countenance while what amounts to a bookkeeper's version of the grim reaper continues to test my resolve.

His email said: “The goofiness of the GRA (General Rate Application — now before the PUB) centers on the flimsy proposed deferral account which is akin to asking the Titanic's passengers to bail out the ship with their tea cups.”
I have been slogging for six years to find the right words to tell people what fools they’ve been and this nerd does it with a throwaway line!

Like PlanetNL, I don't mind mocking Hydro's top brass, except I like to have my showers hot like the next person. But PlanetNL throws all such caution to the winds.

He skilfully uses teaser words like “Another final point…” to keep me reading, except I know that “final”, for him, is as elusive as trying to find the “international experts” at Nalcor. 
PlanetNL states:

“… the point to be made is that the original pre-sanction financing scheme included deferred accounting on MF+LTA (the power plant and the line to the Upper Churchill) which was a clear acknowledgement that the project sponsors understood that project costs were very high, even having low-balled the numbers at around $5B, and that therefore the rate impact was perilously risky.” 

“Even then,” he adds, “at the best of times when oil was sky-high and the Province benefitted from positive cash flows, the responsible executives/politicians/bureaucrats chose to implement a draconian Ontario-like deferral program because they knew how weak the business case and energy forecast would be if significant rate increases were to occur.”

Of course, what PlanetNL is really getting at is the failure by Nalcor’s minstrels to acknowledge that, as power rates rise, demand will fall: simple demand elasticity.

Then he makes an allegation that absolutely shocks me.

He charges: “Only an exclusive few in government — with some Hydro/Nalcor invitees apparently — have the wisdom to review the matter behind closed doors at Confederation Building.  Yet, when they come out from behind those closed doors, all they (Hydro execs) can offer at the PUB Hearing is meaningless repetitive commentary about a step change and doing the best that they can.”
Related to this Post:

One does appreciate the sense of futility with which PlanetNL sees the whole sordid business, doesn’t one? Actually, he did close off with that shot at Hydro brass, but twenty minutes later my Inbox was filled again. Without as much as a preface, the new one from PlanetNL read:
“Reading this morning yesterday's General Rate Application transcript from the PUB of Dennis Browne asking questions of Dawn Dalley… it suddenly occurred to me: with the LIL (Labrador Island Link) infeed power normal economic assumptions of CDM (continuous demand management) have been turned upside down and neither Dennis Browne nor Dawn Dalley seem to realize it.

“The issue is that Holyrood no longer will be the source of the marginal cost of power.  Holyrood will actually be the middle layer of a strange economic sandwich. On the bottom is 4600 GWh of low cost island hydro whose consumption will be maximized.  In the middle is expensive Holyrood power which is forecasted at around 700 GWh in 2019.  This consumption is essential due to reliability spinning reserve requirements.  (In other words, Holyrood has to operate anyway just to keep the current system balanced.) The top layer of the sandwich is 919 GWh of ultra-cheap CFLCo power delivered under a fixed (yet unknown) O&M (Operations and Management) cost.  This is not a minor nuance.”

What PlanetNL is getting at is that those rate increases will continue to drive down power demand. The cheap Recall power coming out of Labrador may not get fully utilized, even though Hydro talks it up as the answer to even temporary rate mitigation.  The email adds:

“As Dalley plainly agreed, consumers are responding to CDM opportunities to reduce electricity consumption, either formally through programs or independently fearing escalating rates (pre-emptive elastic behavior!).  As a result, it will be high-margin sales of the super-cheap CFLco power that are reduced by CDM, not the high cost Holyrood power as discussed by Browne and Dalley. Accruals to the proposed rate mitigation deferral account will suffer considerably.”

PlanetNL continues:


“This is another example of Hydro/Nalcor/GNL continuing to fail to study their circumstances OR they know it and prefer to deny its existence and stay silent, hoping nobody will catch them.  The peril is that the excess earnings over the ill-defined LIL/LTA fixed operating costs are likely to be lower than forecast.  Hydro can only defend the deferral account by continually overestimating island energy sales forecasts and deceptively stating that Holyrood is the marginal cost piece when it actually would not be. I don't think the Consumer Advocate has picked up on this unique piece of upside-down economics.  

“Hydro is spinning a tale from both sides of its mouth.

“Hydro needs to be ordered to obtain an independent energy sales forecast analysis with long-run demand elasticity considerations to post-Muskrat start-up (say 10yrs).  

“They should also be ordered to develop rate and revenue model options with the Government committed to specific subsidy contributions.  

“Only a broad view of long run costing can allow the PUB to render a Decision based upon the complete picture as to whether to approve the deferral account and if it offers the financial advantage Hydro is trying to assert (the legality of which is doubtful — but a separate issue).”

By golly, I think that PlanetNL has given the PUB their marching orders. The Consumer Advocate might want to take notice, too.

66 comments:

  1. The goofiness of the GRA (General Rate Application — now before the PUB) centers on the flimsy proposed deferral account which is akin to asking the Titanic's passengers to bail out the ship with their tea cups

    Classic... and very fitting.

    ReplyDelete
  2. Rising oil prices cause increase in Rate Stabilization Plan Adjustment
    for electricity consumers
    April 14, 2011 ‐ Newfoundland and Labrador Hydro (Hydro), a Nalcor Energy company, filed an updated fuel price projection for the Rate Stabilization Plan (RSP) with the Newfoundland and Labrador Board of Commissioners of Public Utilities (PUB), which will result in an increase in electricity rates to Newfoundland Power and most electricity
    consumers.
    “The price of oil has increased and therefore electricity rates are increasing as well,” said Jim Haynes, Hydro’s Vice President of Regulated Operations. “The fuel price projection used for setting electricity rates has climbed from $84 per barrel to $103 per barrel –almost $20 more per barrel over the last 12 months – and electricity rates will rise by approximately seven per cent effective July 1, 2011. The cost of oil is a direct pass through to consumers and neither utility receives any profits or benefits financially from changes in oil prices.

    ReplyDelete
  3. "Trying to avoid the old electricity elasticity trick" Maxwell Smart might say to agent 99, when under the cone of silence. Then adding "if only they worked for good instead of evil"
    Avoiding the economic rule of elasticity is like trying to avoid the force of gravity.
    How "world class" must one be to know that when Price Goes Up, Consumption Goes Down. Yet Kathy Dunderdale did not expect Nalcor's world class experts to acknowledge this basic economic fact.
    Even when the Wizzard, economist Wade Locke,head of MUN's economic Dept, stated that he had heard of this concept, he poo pooed the impact. And so even 6 years later Nfld Hydro avoids discussing it.
    The resolve to confuse the public is no different under Stan Marshall than under Ed Martin. The ethics, integrity , honestly, transparency,of the Nalcor and Nfld Hydro, as well as Nfld Power and Fortis officials is such that they take cues from the top brass.
    Years past, someone said this whole Muskrat scheme was like Alice in Wonderland, where everything is upside down or inside out.
    Unfortunately the public will be outraged only when the bills strike home. As Heracles from Quebec says, we have not yet learned our lesson, and a hard lesson it will be.
    We are different, it seems, from the people of Quebec, who hold their leaders accountable if they mislead and lie. Here, except for this UG blog, the whole province is under a cone of silence. And like the cone of the volcano in Hawaii, risks blowing up, but uncertainty as to when.
    Winston Adams

    ReplyDelete
  4. What tangled webs we weave, when we weave to deceive. That is Nalcor's policy statement. So they have to continue to weave and deceive. But who are the deceiving, just themselves, because in the end the people will do what's best for themselves. As you said, UG the people have tuned out, they know nalcor/ govt will do their thing, so rather than fight, they will just get even. You can fool some of the people some of the time, but you can't fool all of the people all of the time. When the time is right for each individual, they will invest in a heat pump or two. Some have already done it, others will do it now and others will do it later. So little mice in the hydro/nalcor will work like bees to get their two cents worth heard by the boss, to impress the boss, and think they are doing a great job. Sorta like my idea will pay for my salary. Like the cop that gives out a lot of tickets, and concludes, well I guess I paid for my salary this month, except the guy appearing in court owes 15 grand in fines, never to be collected, so guess who pays the cops salary, the system, not the tickets. So weaving and deceiving, is just a lot of background noise, earns a few pennies here and there, but does nothing in the grand scheme of things. But guess we have to say thanks to planetNL for continuing to vigorously dig, and to you for hanging in there behind the mountain of baloney that nalcor and govt keeps shovelling out. I am sure that most people appreciate your endless efforts, along with others, even if they don't say it up front. Yep, just a lot of noise on the background screen, that nalcor etc. uses to justify their existence in the system, and to please the boss. Reminds me of the WH aid that makes the infamous statement, that John McCain will soon be dead, and implied good riddance to him, and her boss, Trumpie was overjoyed with the remark, just wondering why he didn't say it first. But that aid is now pretty high on trumpies list, at least for now. So it is with some little mice now in nalcor, but that will eventually end, when the people decide they have had enough and have outsmarted them all by reducing their hydro needs and any real need for the nalcor conglomerate. The universe is unfolding as it should. Cheers, Joe blow, average Joe, AJ.

    ReplyDelete
    Replies
    1. "Reducing their Hydro needs" only increases our taxes. MF has to be paid for one way or another. Except for rioting in the streets, how do we revolt??

      Delete
    2. I would respond to you Wayne, except that someone is lobbing scud missiles, crocodiles, and what have you, and my old clunker is having a job to lug that around on its back. So may have to go to the public library to use a PC there again, if I want to participate on the blog. Any suggestions, except maybe investing in a new one. Joe blow, average Joe, AJ.

      Delete
    3. Hi AJ; I'm using a smart phone most of the time. It works ok, but typing is a little slower (and the spell checker is not as good).

      Ex-military Engr
      (using a pc this time)

      Delete
    4. Wayne: The main option for "revolt", as things now stand, unfortunately, seems to involve leaving the province altogether.

      Now, NL was already expected to see its population decline by about eight percent over the next twenty years. But these predictions did not (to my knowledge) factor in the impact of massive electricity price increases, and to repeat a point I have already made here, NL over the next few decades is in danger of entering a destructive feedback loop: Repeated increases in power prices cause an increase in emigration, thereby shrinking the pool of ratepayers and taxpayer, who end up having to pay more (per capita) as a result, thereby accelerating the emigration of individuals and businesses, shrinking yet again the number of ratepayers and taxpayers, who thereby end up paying more...and so on, over and over.

      Because the people leaving will be (on average) younger and better-educated, the impact of their departure upon NL's energy and fiscal future will be much more egregious than what their mere number would suggest. Meaning, unfortunately, that NL's future is much more dire than this blog entry might suggest.

      Delete
  5. With regard to this excerpt

    '"He charges: “Only an exclusive few in government — with some Hydro/Nalcor invitees apparently — have the wisdom to review the matter behind closed doors at Confederation Building. Yet, when they come out from behind those closed doors, all they (Hydro execs) can offer at the PUB Hearing is meaningless repetitive commentary about a step change and doing the best that they can.”'

    According to evidence posted by the Consumer Advocate's expert witness, Hydro has been directed by government that this deferral account will be Hydro's only rate mitigation attempt. Any other rate mitigation strategies employed after this will be from government directly. My guess is that they will be announced not long before the 2019 election so that the benevolent Liberals will dupe us all into thinking they are worthy of re-election.

    K

    ReplyDelete
  6. Has anyone picked up on the recent flurry of letters in the Telegram by advocates (cunningly reasoned) to funnel the coming carbon tax, not back to the householders, and averages Joes who will incur this tax on fuel, to permit them to offset higher electricity costs or higher fuel costs for cars and trucks, and transportation of goods and food into the island, but instead to pass it back to the polluters, oil , gas and other polluters who are the source of the need for the carbon tax.
    This is a scheme now in the early phase, as like MFs, if not nipped in the bud by vocal opposition, will be another millstone around our neck, and a benefit to the rich and well connected.
    Winston Adams

    ReplyDelete
  7. What does Premier Ball and Minister Coady have to say to the citizens of this province regarding this disturbing analysis as to their proposed yet still ill-defined "rate mitigation" scheme?

    Speak up!

    ReplyDelete
    Replies
    1. Well, as Nfld Power and Nfld Hydro are tied at the hip bone on their useless and misleading Take Charge program, it appears that it is still government policy to discourage energy savings and conservation, so to boost MF power use.
      Take or pay is coming back to haunt us, so avoid conservation and energy efficiency altogether would be prudent is their upside down world: but make out they do much in this, as the public is ignorant and can be fooled most of the time.
      And from the photo of John MacIssac, he is a serious croc, in that it appears doubtful if he gives his biggest smile , he will fail to have an upturn at the corners past the top of his top lip. I suggest his associated ask him to mile to prove or disprove this, and report back here, as a whistle blower as to where the crocs are.
      His smile problem may not be as bad as DW, but seems serious. And I need data, so please report back to PF, I working towards a Nobel on this, you see.
      PF

      Delete
  8. A very good letter in the Telegram on May 11 also highlights the bewildering backwardness of Hydro executives and Government as heard at the GRA. Our leaders are doubling down on their insanity to see us through these difficult times. We are so fortunate to have such committed and enlightened souls in highly paid positions of trust. Our luck just won't run out...

    Here's the URL:
    http://www.thetelegram.com/opinion/letter-to-the-editor/letter-electricity-consumers-do-your-duty-209673/

    ReplyDelete
  9. http://www.cbc.ca/news/canada/toronto/hydro-one-raise-board-of-directors-1.4662385

    Beware privatization of Energy Corp. Dougie has a hate on for the CEO of Hydro 1, thinking this form of self governance is "elitist"

    ReplyDelete
  10. How does NALCOR Board appointments stack up against these fine "Liberals"?

    https://www.hydroone.com/about/corporate-information/senior-leadership-and-board.

    Lots of double dipping here. Election times are wonderful. We get to see where the "Gravy" is distributed.

    ReplyDelete
  11. Is the fiasco of MF "debtbook diplomacy" where billions of dollars in loans are made to an area that cannot afford to pay the loans ,and then strategically leveraging the debt?
    China's methods are remarkably consistent , say a Harvard study into the methods.: beginning with infrastructure investments , long term loans with extended grace periods, which appeal to countries with weaker economies and governance, where large scale projects represent sizeable portions of the host nations GDP
    Construction projects , having a reputation for running over budget and yielding underwhelming return, make debt repayment for the host nation more difficult.
    Shi Lanka owes Chinese firms 8 billion. It started with financing 361 million for a port, and then another 1.9 billion for upgrades and an airport. By 2017 , the port , which was yet to make a profit, became a "debt trap"
    The sunk cost and the need to generate profit to pay off the original loan drove it to take out additional loans, a cycle that repeated itself until it was finally cornered into giving up the port in a "debt-for -equity" swap.
    It started when Sri Lanka granted China 85 percent state in a 99 year lease on the port.
    The method may be considered "neocolonialism by stealth"
    Is there anything similar going on with MFs, except it is not China, as they are just supplying the turbines .
    Winston Adams

    ReplyDelete
    Replies
    1. Hi Winston,

      Honestly, I highly doubt every conspiracy theory. Here, the bond holders can not expect to recover anything other than their money. The loan are guaranteed by the Feds, so for them, the worst will be to be paid from another pocket but still paid and in cash.

      That would mean the neo-colonialist would be the one who will pay for you at the end, so Ottawa. Can you really consider a country can colonize itself ?

      If there is a transfer of asset from Newfoundland to someone outside, the most possible case is to transfer the UC / LC to Qc and HQ. Considering neither did anything in favor of the project, and actually that both protested and did all they could for the project to be done in any other way, can you really consider them as part of such a conspiracy ?

      No. When one is down to conspiracy theory, no matter about what, it is because he is desperate to escape reality.

      Newfoundland insisted so much over so many decades for official support from Ottawa about its mega-projects, it finally got what it asked. The situation is as simple as that.

      Delete
  12. To Wayne et al. Yes the universe is unfolding as it should. And we are entering a very critical phase over the next two years. The enquiry will have run its course, muskrat will be on stream, and a election of a government will have taken place, and the decisions of how best to deal with the boondoggle. These will all be front and center over the next two years, and it will a critical time to stand up for who you are. Not a time to rest on your laurels, and critize everyone, and everything and put everything asunder, but a time for beginning to coming together, and realize that the future, is bigger than anything else we face. It is bigger than our past, bigger than the present, bigger than the boondoggle, bigger than petty politics. and bigger than our critics, it is the future of our children, our grand children, and generations unborn, and by God we won't be the generation that let them down. It doesn't matter who we elect as the next government, Ball, Crosbie, Rogers, or a Bill Barry. We will control our leader, not the other way around, we are not looking for a saviour, it will require all of us to save ourselves, and by doing that we save our province and our future. So be prepared we are in for the fight of our lives, and we don't need any cry babies, or sitting on the fence, and wondering if we should go another way. The future is clear, forward in building a stronger, and better province. The cards may seem stacked against us, so what, cheer up, laugh and the future is ours. Here is what will happen, muskrat will come on stream, cooler, rational heads will prevail, of weather to run it or shut it down. The line from UC will be energized bringing recall power, also by buying excess power at the going rate from HQ. I will leave it to the experts to say if ac or dc power and what the lines can carry, so you guys speak up tell us what it is. As for the muskrat debt, that burden will be shared proportationally. The Feds, will have to eat their share, NS will have to eat its share, because, it was really NS that Harper signed the loan for, and with out their support he would never have signed it. Check the statements made at the time. And we will have to eat our share. I suspect around 4$ billion. This will be settled politically, or in the courts, or as a last resort by joining the Stars and Stripes. We have an enemy within to slay, and we have some wishful vultures circling. So what, we are a province with defined borders, and they will stay that way, that is the Canadian way, the true north strong and free. Now a word about UN's blog, because this is a part of the fight within and without. It is also my blog and yours. We have invited friends and others with opposing views, they are guess, you invite guess into your home, but they don't take over your home, you remain in charge, you are still the master of your house, so let it be with this blog and the province. I will write much more on all of these items later, as I fear I may be running out of space right now for posting. I will just mention briefly, there is also a fight for LabWest, the union is telling us there are efforts by Rio Tinto and others to depopulate LabWest, that will be a fight that will be won too. So in the short term, don't let others sow discord, or some say soften us up, and don't you sow discord, by pandering to their wishes and comments. I am not ant-Qc, have never been, and don't expect to be, I am pro-NL, and I hope the hell you are too. So stand up for the cause of self determination, express your opinion openly and freely, and the future is ours. Hear, hear Canadians everywhere. Cheers, average Joe.

    ReplyDelete
    Replies
    1. Winston, Peng2, planetNL , and maybe others, would you care to enlighten us on the potential for power coming from the UC line to soldiers pond, compared to LC and if dc or ac. Would guess can only bring one or the other at any given time. Will be interesting to see how much the power rates, increase in the next 2 years, as the higher the better, as more people will switch to heat pumps, then less total power required later, which is good as more can be sent on to NS. And by 2020, when everything is all sorted out, the power rates can be dropped again to reflect the actual cost. As the best way to pay off our share of the boondoggle is through general revenue, and less direct control over us by NL power, hydro, and what ever is left over from nalcor, so we are masters of our own house in many ways, and not led around by the nose by these that think they still have the reins of power over us like the power companies. These are my thoughts, what do others say. average Joe.

      Delete
    2. sounds like a good start to a swarm to me.
      Sign me up.

      Delete
    3. Right on Tor, if that's the right word for you, that's good. Swarm, has a number of definitions, but mainly, inspiration, collaboration, real social action, and the same goals. I think a main goal is the people is always in charge of the government, and not the others way round. Never again elect dictators, that people will think they not only took the oil from the ground, but put it there in the first place. Never again to let our government to create a monster, like Frankenstein, that becomes bigger than its created, and in control of the province and its finances. When we do that, you see what you create, and you can do nothing about it until it is too late. That's the reason we are where we are. Never again to be led down the garden path by the media, we know who controls them, not the people, we need blogs like this to counteract the media, and provide the facts. Never again, to elect 7 little MP's to go to Ottawa, and sit on their hands, except when to vote, and sit like dummies. Have you not heard of the guys and gals we sent to Ottawa and were worth their weight in gold to us. Never again to elect dummies to the house of assembly just to collect a second pension, we need, commitment, dedication, and this province first and for most, and not self interest, and to thump the desk just to show the kind of idiots they are. Your signed up Tor boy. Cheers, average Joe.

      Delete
    4. Joe, new power line from UC to MF is AC.
      From MF to Soldiers Pond is DC, so we cannot transmit AC over that, but AC from UC gets converted to DC at MF,
      Whether the power is from MF or UC, that power is then DC until arriving Soldiers Pond, and converted to AC again.
      MF is 824 MW but average about 550MW, so I expect the new transmission line from UC to MF is maybe 350MW capacity. Both of these combined would allow 900MW, which is the rating of the DC line to Soldiers pond.
      As power is lost is tranmission, less is lost via DC, but then you need conversion stations on each end.
      And DC adds to operational cost in that operators here have no experience with DC yet, except Emera recently used DC on the Maritime Link now in service.
      All 3 big lines going from UC to Quebec is 735kv AC
      We are now limited on import of UC by the capacity of the link from UC to MF, and maybe much of that may get used for Bit mining operations looking for cheap power, but are here to day and gone tomorrow. And new computer cooling technology is slashing power needs by them by 95 percent, so very risky for Nfld Hydro to spend money to feed those beasts.
      Hope that helps. Peng2 may have the numbers on the capacity of the link from UC to MF if different.
      It would take 6 DC lines like the present one to bring all the UC power to Nfld!. If 4 billion per line , that is 24 billion just for transmission. And make not a tree left on the GNP fro all the right of ways. As Peng2 has said the Anglo Saxon route madness. The French Anglo Quebec route was workable.
      Winston

      Delete
    5. Good comment Winston. Guess the last part of your comment, may be applicable in 2041, and of course we are not there yet. Guess we only need to look at what is available in the short term, from muskrat, should it operate, and what is available from UC in terms of recall power and excess power that HQ has for sale at the going rates, understand HQ has lots of surpluses power that it can't sell in the US market. So what ever the capacity of the line is, should be filled. As for bit mining useage, the only fools that would give them the power we need is the same fools that gave away, our cheap, paid for power, and reliable on the island power to NS. The buggers, and traitors. So that will change, to hell with agreements, you don't give away your own cheap power that you need to someone else, common scense prevails. You don't freeze your self in the dark, and give power to your friends in another province. I believe in brotherly love, but don't be an idiot, and I don't expect a sister province would expect you to do that. So after we have mainly converted to heat pumps, we can see what's available to come via the LIL, what power we have on the island, and looking at shut down holyrood, or keep it running, make the right decision there, and then we know what is available to send to NS. That's my take on that. Others might differ, but don't muddy the waters just for the hell of it, and if you have concern for your province above all else, you will stick to the facts and call a spade a spade. Cheers. Average Joe.

      Delete
    6. One final comment on the buggers and traitors, hopefully the Leblanc inquiry will root out those responsible for signing away our cheap island paid for power, and recommend criminal charges be brought against them in another court. That is TREASON, plain and simple.

      Delete
    7. AJ,

      If the pricing is designed appropriately, then maybe zero power needs to come in from Labrador. Take a cue from our very own isolated diesel pricing system which has a baseline quota averaging around 800kwh per month per residential customer at the standard domestic rate (same as Nfld Power) but for any amount exceeding the monthly quota you pay a considerably higher price. Quebec and BC, notably more socialist and progressive jurisdictions, do this as well not just on diesel but on their main grids.

      Set this up right and you have shrewd progressive policy where everyone has access to reasonably priced essential electricity for cooking, cleaning, lighting, etc but not for heat. Hydro calls it the lifeline energy block. In most homes, electric heat will be squarely in the higher price block. With oil or wood heat, requirements might barely ever exceed the lifeline quota. If you are well-to-do with a mega-house, your 5 tvs, several computers, wine fridge, beer fridge, hot-tub, etc, then you might have substantial non-heat usage that exceeds the lifeline block.

      Set that second block rate high enough and watch what elasticity theory will do. Perhaps we can do without Holyrood or Labrador imported power altogether and utilize only island renewables. Presumably second block pricing would intimidate enough people to change their ways.

      Let's not kid ourselves though: it's a bad tasting medicine for even those who would support it. While two level rate design seems to pass some ethical/fairness/affordability criteria, there are major obstacles to pursuing this as a policy option. It is certainly not politically attractive, it will be hated by influential high energy users who don't want to change their ways, it's far harder to design and implement stepped rates for commercial customers, it won't yield any revenue increases (Muskrat will be a taxpayer problem), it depends on a solution to the Emera power supply obligations, and maybe more.

      It certainly seems that this or other progressive policy options are even being considered by Government - they appear hell bent on raising all rates and crippling all customers, especially those who cannot afford the increases. That is regressive policy of the worst kind. Progressive options may only see the light of day after the worst is already done.

      PlanetNL

      Delete
    8. Joe , Your previous comment that we are led around by the nose by those that think they still have the reins of power over us by the power companies:
      1. Yes heat pumps they fear, and also the ones they show on the Take Charge website are rated for North Carolina climate, so save up to 40 percent , maybe or less, and poor quality performance. The good ones, that cost very little extra, that they don`t mention save 65 percent, and if best methods as much as 75 percent.
      2. As to SWARM: I wonder:
      How about a shot across the bow, with on July 1, from 11 am to 1 pm, every Nfld and Lab home and business turn off their power for 2 hours. Usually our grid operates then about 600 MW, but will drive it to near zero, and show them we, the people, mean business: they control the generation of power but the residents control the consumption. This idea could spread by facebook for coordination. Is that a swarm.....
      Winston

      Delete
    9. Interesting comments. To your last point first, we got to get out of this mind set that govt. Is hell bent on anything. We have to tell govt what to do, not the other way round. And if we don't want rates raised on everyone then we make that happen. But at this point I am not agreeing or disagreeing on this point, just saying the people should decide that and not a few bigots in govt. or nalcor. As for progressive varying rates, guess that is one possibility, but are you taking into account that if most switch to heat pumps, then there would be no need, for varying rates for house consumers. And holyrood shut down is a bonus. So let's solve our problem first, and then look at what surplus we have for emera, NS. And if we have to bring in power via LIL then that will be emaras block, if we don't need any of it. As for paying for muskrat, that is our share, as I was mentioning earlier, let's deal with that as a seperate item, and maybe from general revenue. We gotta get those power companies under our control, we tel them what to do, they are not telling us. Now of course I am not an expert in power distribution, systems etc. As you know, but those who have that expertise must advise govt. and power companies, what we are going to do, and what rate of return we are willing to allow them to make etc. Of course I am not a fincincial expert or economist either but people like mr. Vardy know the show there. Govt. and the power companies screwed it up for us, not it is our turn to tell them what to do. Desperate times call for desperate measures, and we have to tell those power company bums what we are going to do, and if they can't or unwilling to do it, get the hell out of the way, so we can do it right for the people. Are you and others up to the challenge??? Cheers. Average Joe.

      Delete
    10. BUT!! MF staill has to be paid for and whatevet way you look at it we WILL pay

      Delete
    11. Yes Winston agree with what you are saying about the power scallywags, and know you have been on them for a while, let the people on this blog call them out every day, about their advertising, about 2 sweaters, etc. And substandard heat pumps. Who gave them the right to try and fool the people, they need to be called out every time, and everyday day by as many people as possible. Yes, guess your July 1 could be considered a social swarm, but as for myself, not sure it might be the most effective, as it is a double holiday for us, and mixed emotions holiday. And of course most may not be using much power on a summer day. Just my opinion, but not saying to discourage. How about more verbal or social media campaign, like text, etc to the power companies, executives, govt. officials, premier, minister of environment, etc. May be more effective, go viral within the province. Am sure there is someone on this blog that has the smarts in social media, and the desire to direct a people campaign to let those people that rule us, and run our power companies, that they are on notice, and will be the first to be booted out of this province, if they don't do the people's bidding. We have watched them long enough fill their pockets and ignor the people. Enough is enough. Cheers, average Joe.

      Delete
    12. Of course Wayne, we have to pay . But would you rather pay the entire shot, 12$ billion, or just our fair share under the circumstances. What do you think is our fair share. Zero, or 3 billion. Or 5 billion or what. Guess Leblanc will not answer that question, but maybe UG and friends and contributors on this blog can tell us or give us their best informed estimate. I say that the Feds and NS take the loan guarantee, as it was signed by Harper mainly for NS benifit. Maybe 4$ bilingual may be our share. What do you and others think it should be. Cheers, average Joe.

      Delete
    13. On second taught a Winston, think your idea of turning off our power on one day, is July 1 the best maybe it is. Because the idea is to let them know we can act in unison when the need arises. But guess we need more than one action, to let them know we are serious, and they have screwed up this province, big time, and all three of the power companies are all responsible. So yes, turn off the power, and a social media campaign, I think could be two appropriate actions. Average Joe.

      Delete
    14. Take heart my lovelies, as Ron would say, this is too precious not to share; and most pertinent to a swarm:

      Never doubt that a small group of thoughtful,
      committed citizens can change the world.
      Indeed, it is the only thing that ever has.
      — Margaret Mead

      Delete
    15. Winston, if memory serves, the UC to MF transmission line is made up of two 3-phase circuits, each rated for 900MW. The intent is that they be able to transmit full power from MF to the UC in the event of a two pole trip of the LIL. This effectively uses the Hydro Quebec system as a shock absorber, a fact HQ were none to pleased with according to one of their engineers I was speaking with. Two circuits are used in the LTA to ensure redundancy.

      PENG3

      Delete
    16. PENG3, does this not speak to the need for some Engineering coordination, backed up with some common sense smart grid management? Who is running this stupidity?

      Delete
    17. Hi Robert, this isn't stupidity, it's just the way interconnected power systems work. A problem in one part of the grid is absorbed by others. That's one of the benefits of interconnecting. Hydro Quebec wants to sell power to everyone but doesn't want to be connected via AC like everyone else, though there were valid technical reasons for them to stay electrically separated from the rest of the north american grid.

      PENG3

      Delete
    18. Interesting. Some years ago on a hot August afternoon, a tree branch fell on a transmission line in Ohio. Blackout through the North East. As usual, Americans blamed this catastrophic outage on the "black box switch" in the telephone line in Southern Ontario, (part of the outside plant in my own jurisdiction back in 68). For strange reasons, HQ was isolated from the grid break. Something about "Y" "Delta" power systems? Now you have explained the shrewdness of HQ Engineers. Living in ON when it became necessary to re-engineer the nuclear plants just East of Toronto, we were warned of brown outs and need to cut back on demand. But what about all that cheap power going to waste in QC? The public were told to shut up. OH were not going to connect with the "inferior grid". So what technical breakthrough will be necessary to pump Muskrat power through QC to Edmonston NB?

      Delete
  13. Hi Heracles
    You might read The Guardian piece "Warning sounded over China's debtbook diplomacy", from which my description is taken from, including the term "neocolonialism by stealth" . There are many similarities, and so happened that 8 billion was the same amount guaranteed by the Feds here. And of course you suggested that the present 2/3 ownership by Nfld be transferred to HQ for the MF debt, as your first suggestion. You did vary this a bit later to propose an extended low cost price for CFs power for 15, 20 or 25 years. So not surprised you would class this as a conspiracy theory.
    I ask if anything similar going on. And you ask if a country can colonise itself. A good question, but probably can be better asked if one part can colonise another?
    Labrador residents feel they are no more than a colony of Nfld, and I thing that is so. Would you disagree?
    Note I did not suggest Quebec is a coloniser in this MF fiasco, and indeed, Bernard, and perhaps Ex Military thinks the Feds may have some responsibility as to this fiasco, so 2 out of 4 of Quebec commentators here.
    Now recall you praise Joey for his insight for CFs, which is fine, but ignore his many many failures in his develop or perish policy. Also Nfld requested and eventually got support for the offshore oil development, which became profitable,so not all mega projects went south, so this not as simple as you suggest.
    And there are such things as conspiracies, such as when large companies price fix, or Mafia, as in Quebec construction, that the good judge there rooted out, and I recall Trickie Dickie Nixon, to name a few,yet I have not said MF was a conspiracy, but point out similarities.
    Now you also say that the neo-colonialists, that is Ottawa will pay for us in the end, to contradict the comparison. But you have until now stated that the Feds have no responsibility, but 100 % Nfld fault. And to that point, the take or pay contract between Nalcor and Nfld Hydro, puts the ultimate responsibility on the ratepayer or taxpayer here, so the average Joe Nflder guaranteed the Feds, as you know. You take liberty with some facts in this fiasco.
    You suggest to make comparisons is to escape reality, on my part. If so I would blame Quebec. But I do not blame Quebec. Indeed, I am rather fond of Quebec, and reqret I do not know the French language as you know English. As mentioned before , up to the mid 1960s, our second language in school here was Latin!
    Now in China, the mega projects for other nations require that most all material and benefits go to China. For MFs only 2 billion went to Ontario and 2 billion to Quebec.
    Poor me, of 9.2 billion spent so far, my company, operating here since 1975, received ZERO DOLLARS from this project, perhaps due to being a naysayer. So I make some money from my investments in Quebec companies, that are not connected to MFs. If I lacked a connection with reality, I would put Quebec as a villain. Might you confuse me with DW?
    Winston Adams

    ReplyDelete
    Replies
    1. Hi Winston,

      About Smallwood's career as a politician, I do not know much outside UC. I learned about UC first and that is how I learned a little about him. I never studied his career, so can not say much about everything else he did. But again, whatever wrong he may have done or not, that is the past and one should not live in the past.

      I told you about what he did despite it is the past because you were considering this past as negative and as the justification for things in the present. My only goal was trying to bring you back to the present, the same way I try to bring back Uncle Gnarley to a positive point of view about Quebec and others.

      About Mafia, that is not conspiracy. It is a crime. We know they are there. We do fight them. We have a hard time because they abuse the laws protecting the innocents, but we know about them. In our legal system, as it is in many, it is considered much worst to condemn an innocent than not condemning a guilty. It is by abusing this principle that Mafia and criminal organisations do their bad. It is not conspiracy.

      I said Ottawa will end up paying, but as for me, it's because Newfoundland as it existed up to now will not be anymore before these loans are paid. I have been on this blog for a few months now and from what I see, there is not much hope for the mentality to change in Newfoundland.

      About not all mega-projects going wrong, do you know how someone turns in a gambling addict ? Every gambling addict starts with a winning phase. At a moment when they start playing, they win way more than average. It is in the hope of renewing this win that they play again and again. Of course, the maths being what they are, they end up loosing a lot, but that winning phase is all they are after.

      You did some mega-projects right with support. Good for you. But is this not yet another evidence that the Feds are not as negligent as you depict them ? Considering you got it right with your planing in the past, it added to your credibility and they chose to let you do it because you were so convinced you got it right again here. Also, are you sure such a success did not triggered the same reaction as for gambling addicts ?

      Newfoundland still needs to learn the Frog and the Ox. After seeing itself as a big as a Ox in one project, the Frog keeps trying to puff itself even more...

      At the end of the day, the situation is:
      -A debt per capita that was already problematic before MF
      -Adding the part that is not guaranteed pushes that amount of debt too high
      -The structural deficit is gigantic and survived too many budgets
      -Unions recently received the guarantee that this structural deficit will be maintained
      -Power rates even at 17 cents will slow down the economy even more
      -Reduced income to face an increased debt in an already negative budget facing a slowing down economy can not end up in anything good.

      So with that, I am not sure how long I will stay on this blog. I tried to turn On some lights and I failed. We will see how that will end up.

      Will Newfoundlanders start asking their leaders to negotiate an extension of the Power Contract with HQ in exchange of HQ fixing MF ? I don't think so.
      Will Newfoundlanders start asking their leaders to cut the budget for public services ? I don't think so.

      Democracy being about popularity, the leaders will not do what the people do not ask. Because these two things are very different than how things were before, you must not only ask, you must insist.

      Despite all of this, may the best for you and your province,

      Delete
  14. History repeats folks;

    Fed sponsorship of the Trans Mountain pipeline is just another Boondoggle, like Muskrat, at the expense of all us taxpayers, for the benefit of a few, (Most are Americans), and for the cost of Indigenous rights and environmental degradation. Heracles and Etienne, you say conspiracies aren't real? Kieth, tell me about the "Business Plan" for oversupply to market of tar sand extraction, selling below cost.

    ReplyDelete
  15. This province desperately needs pragmatists such as Heracles31 to save NLers from the dimwitted partisan fools and dodgy corrupted skeets that are chronically attracted to the putrid, festering cesspool that is NL politics.

    ReplyDelete
    Replies
    1. Hey Anonymous 20:02,

      Thanks for your note. I saw it right after I published my last reply to Winston... That surely encourage me to keep going on this blog :-)

      Have a nice day,

      Delete
    2. Hang on Heracles, your contributions definitely bring some sanity - while we still inch closer to disaster...

      Perceptions here improved somewhat in the last 18 months or so.

      Just re-read Des's piece in Nov 2016, covering basically the same subjects, and the following comments. (I wish I had your English writing skills)

      Delete
    3. Nov 2016:

      http://unclegnarley.blogspot.ca/2016/11/over-barrel-start-of-new-resource.html

      Delete
    4. Hi Ex-mil,

      I went back to that article and indeed, it is the traidional brainwashing speech that Newfoundland repeated over and over again. How the 25 years extension was a deliberate abuse of poor and vulnerable Newfoundland and blablabla when Newfoundland was not even part of the contract.

      If you look at the politicians' answer about how they plan to mitigate MF, one of the first thing they say is that involving HQ is not considered as an option. Now, they may just say that all options are considered, but they will do all they can to avoid naming HQ.

      When will some Newfoundlanders tell their elected leaders to stop seeing HQ as evil and to go ask them for help in exchange for an extension of the power contract and distribution rights over Labrador, to the Rock and NS ? If you don't ask for something like that, the elected leaders will do all they can to avoid that because blaming HQ is still the most popular point of view.

      Proove them they are wrong : proove them that Nefoundlanders will rather work with HQ than trusting such politicians with a subject way above their capabilties. Stop hoping for your politicians to start to act wisely because that is not how politicians work. They act out of popularity, not rational sense. Show them what is popular : is it crying, complaining and being passive or is it being active, proving to them that the Power Contract has always been a WIn - Win and can still be extended as a Win - Win by allowing Newfoundland to get out of the fiasco in a single piece.

      Anyway, the fate of Newfoundland will be known soon enough and in no case it can be more than 3 years... Lets hope it will not turn too bad...

      Delete
    5. Hi Heracles.
      Some Nflders might wonder why I have respect and some praise for Quebec, so here is a disclosure
      After 15 or 20 years in business locally, and having done some business, on a small scale with companies in Ontario, Que and the USA, I thought I could recommend to others to try a bit of investment, to own a bit of other companies to buy a few shares and try luck and skill.
      Of holdings that I recommended, 36 percent are in Quebec Companies.
      They are Bombardier, VNP and National Bank. Bombardier shows down 11 percent, VNP down 45 % , but only 2 percent of total,, and National up 71.5 %, and since most is in National , doing ok, and Bombardier climbing a lot this year. So my advise overall was good. So, as National invests in many Quebec companies , one own a bit of Quebec.
      NOW: Return of Equity ,
      National is 18.22 %
      Fortis is -2.46 % (and I recommended a bit of that too in the past )
      Emera is 8.35 % ( was not recommended, but is doing ok))
      They each pay a respectable dividend.
      My source says Fortis is not currently profitable, due to a negative return on Equity..........so have they grown too fast since Stan left?
      Now there in not many public Nfld companies to invest in, and Fortis shine gone it seems.
      Of course, some banks have done better than National, but historical shows up over 400 % in about 25 years, which is not bad.
      Perhaps more Nflders should see Quebec as a place for win win, as I have and still do. Perhaps my view goes back to my youthful days as an engineer in training on CFs, and those Quebec guys were ok , in my book, and nothing over the years changed that.
      Now of course, we have a big spending problem here with government, so while extending the CF contract some may be one way, there are other ways to skin a cat, or a Muskrat, so all must be weighed.
      Winston
      Winston

      Delete
  16. Good to see you plan to stay engaged Heracles. Generally I see more more half way on your points of view, maybe 60 percent, and differ on others.
    Now I think the Feds should contribute to , if not entirely pay for upgrades to the power link from HQ through NB to Nova Scotia:
    1.HQ has surplus hydro and not enough markets, power at 8 cents in Quebec and 17 cents in NS.
    2 Power rates are too low in Quebec and waste energy.
    3 Will boost the climate change mitigation, to get NS off coal sooner.
    4 Put Canada first before markets in the USA
    5 Part of nation building, like the TCH or railways in the past.
    6 Provide feed back of power to Nfld in an emergency, whereas now NS has insufficient supply and a farce to ship us dirty coal power, and little of that available.
    7 May speed up development of Gull, (if ever economic to do so), so that CF, Gull and MF can be operated by HQ to maximize the benefit.
    8 In essence Quebec and Lbb and Nfld hydro supply all the Atlantic provinces and Quebec, with stable long term cost effective electricity.
    Winston

    ReplyDelete
    Replies
    1. Winston, your distribution plan to get cheaper hydro power surplus through Atlantic Canada is one I have supported for some time. Political interference through provincially controlled power corporations has prevented this most logical and economic Energy Plan. Similarly, distribution of QC surplus power to Ontario has been seen as a logical and economic resolution to mitigation of higher rates, now a political football in the ON election. Keep an eye on Dougie. A lot will come down to Federal intervention, such as the BC TMP subsidy, Site C surplus to AB, etc. and the upcoming Fed Elections. I prefer local corporation on Energy solutions, but maybe, finally, Canada is edging towards a National Energy Plan. Good thoughts and ideas Winston. Keep it going, while we await news on the Muskrat project status, including cost management update, Supreme Court decision, selloff of stranded assets, etc. The lack of project news is cause for concern.

      Delete
  17. I may be getting myself, and this blog owner, into a lot of trouble, having commented here on this blog on my work on mini-split heat pumps.
    The problems may arise whether my work is defined as one of evaluation or performance or research, which I have put into the public domain, some at the PUB, but more so on this blog.
    Some UG readers may recall the nature of my postings, and I ask of you if you consider my work as: evaluation or performance data; or research data.
    If research data and of interest or applicable to other humans, it may require ethics approval whether I continue to do this work or make it public. Personally I considered it research, but also had evaluation and performance components.
    I didn`t realize that it might be possible that some ethics act might govern or prevent me from such work, or need their approval to continue or make it public.
    If readers could help me define this work it might help, least I break the law.
    Winston Adams

    ReplyDelete
    Replies
    1. Curious, who or what authority is making noise in this regard? Technology Transfer is in the best interest of the public consumption and good. Your reporting of actual observations on performance of commercial products makes a valuable contribution to the Blog and the public at large.

      Delete
    2. Winston, your work with mini-splits is a combination of all three. I had a minisplit installed last year and not knowing the logistics, the installers installed it facing the northwest directly facing the wind and snow. I now know I must provide some protection from the elements and am seriously considering installing a 2nd one ( I have a split entry house) for the downstairs portion. Attic installation is impractical for me but the benefits (especially when MF comes onstream) makes another MS very posssible. Your postings are important for those considering investing in one. If I had my time back I would have installed a dual zone MS as opposed to the LG single zone I now have.

      Delete
  18. And how are things going on Site C you might ask? Following the Muskrat Boondoggle track.

    http://vancouversun.com/opinion/columnists/vaughn-palmer-hydro-shocker-isnt-the-first-time-project-wires-got-crossed

    Reading the fine print we find contract management is lax, if not incompetent. Comments under the article get at the expectance of over-run on mega projects by BC Hydro. Did not Mr. Williams make similar comments about MF? BC minister in charge stated that estimates were mere guesses. "Guesstimating", WAG, (Wide Ass Guesses) we used to call them, to get past project sanctioning. Sound familiar?

    ReplyDelete
  19. Has UG gone undercover?
    No new post yesterday!

    oh oh.

    I have cobbled together an objective sheet for ElectroSwarm NL.
    It needs further development, obviously, that's the very nature of a swarm

    ElectroSwarm NL

    Never doubt that a small group of thoughtful,
    committed citizens can change the world.
    Indeed, it is the only thing that ever has.
    — Margaret Mead

    Objectives
    1. Demonstrate how the whole population is being coerced into long term debt without reason; that we are as mad as hell and won’t stand for it any longer
    2. Study the implications of capital investment now for long term returns on electricity bills (minisplits; insulation upgrades, eg.)
    a. Develop methods to maximize existing TakeCharge and Federal programs for energy conservation across the whole population – home and business - use their own tools to great public advantage
    b. Develop bulk purchase of standard and alternate heating and insulation technologies to reduce capital outlays
    3. Provide and promulgate practical ways to reduce electricity consumption in homes and businesses
    4. Discover how capital investment in alternate heating methods can be subsidized or supported for those unable to raise the needed funds
    5. Bust the generation and distribution monopolies; make public utilities public

    ReplyDelete
    Replies
    1. One more step copmpleted
      electroswarmnl.ca registered

      if it goes further the domain can be gosted with a collaboration tool overlay (WordPress or similar blog type app) for participation.

      Next a committee, then some sub-committees; everyone read up on swarms as social action tools

      Take your future in your hands and remember there is nothing that cannot be accomplished by men (and women, of course)of good will working together towards a common cause.

      Delete
    2. Glad to see you leading the way Tor, on the Electroswarm. You have some excellent ideas, and seems you have organizational abilities in how to direct a campaign across social media. As you say, "a small group of concerned citizens, can change the world, a country, or a province". Also think UG and friends have made an excellent start, so others may bring their talents to bear where they are most needed. Maybe UG is taking a blow, a spell, or a coffee break. Well deserved!! Keep on trucking guys and gals. Cheers, average Joe.

      Delete
    3. Much of what you propose is achieved by energy efficiency corporations in other jurisdictions, that is separate from the power companies, but funded for incentives by a small portion of the power bill, like Efficiency NS.
      We the people, through our power bills have already funded a $300,000.00 study to show the energy savings and potential peak grid power reduction in winter.
      The study , the ICF study was done in 2015. If memory serves it shows a potential reduction of 31 percent reduction for the residential sector, most for mini-splits as number 1, and insulation, mainly of basements , as number 2 best measures. Commercial reduction would further reduce energy savings.
      Savings on peak demand can likely be 400 MW of more, and perhaps a much as 600 MW, most from mini-splits that are of the quality that operate good in our climate. If you want to assume that minisplits do not reduce winter peak demand at all, you can assume that ALL will fail in winter!. This is exactly the power companies , it appears , told ICF to say, that all will fail, though that is a false assumption. But if you call it a Conservative assumption, it allows you (ICF)to say that , and so show NO peak demand saving. What does Average JOE think of that approach by our caring power companies. So instead of knocking off hundreds of MWs, you show knocking off zero. Such is the tactics of the scallywags, and this paid for by our power bill dollars. Deception of the first order.
      Winston

      Delete
    4. Agree with you Winston . Who the hell do those scallogwags think they are that sit in their ivory towers, acting as if they were king Tuck, with not a click and a clue, between the dam lot of them to give the little bit of power that's required on this island of a half a million people. Imagine if they were providing power for several million people!!! And we have three power and distribution companies falling and tripping over each other as if the were at a New Year's Eve drinking party. They have screwed up royally the future of generations yet to come, and they just don't get it. They have a mentality that the land mass of this province is their kindergarten playground for their hydro power shannigans, and the people be dammed. Does the province and the people exist for your convenience to play around with their lives and future generations. You placed this province, along with your political bosses, in fincincial jeopardy, and you accept no responsibility only to espouse your distain for the innocent people that have placed their trust that you would do what was in their best interest. And you have been a dismal failure, and want to continue in your destructive ways, that is the lagecy of the politicans and power companies of the last decade plus. Prior to that you seemed to be doing your job in a reasonable and responsible way. Did you all stick both hands in a 400 volt circuit and fry your brains!!! If that's the case it's best that you be relieved of the positions you hold. That's what I think, anyone else have similar thoughts?? Average Joe.

      Delete
  20. This paragraph is odd.

    "“The issue is that Holyrood no longer will be the source of the marginal cost of power. Holyrood will actually be the middle layer of a strange economic sandwich. On the bottom is 4600 GWh of low cost island hydro whose consumption will be maximized. In the middle is expensive Holyrood power which is forecasted at around 700 GWh in 2019. This consumption is essential due to reliability spinning reserve requirements. (In other words, Holyrood has to operate anyway just to keep the current system balanced.) The top layer of the sandwich is 919 GWh of ultra-cheap CFLCo power delivered under a fixed (yet unknown) O&M (Operations and Management) cost. This is not a minor nuance.”

    The goal in managing the generation on the island has always been to minimize the use of Holyrood and the combustion turbines, the interconnections to Nova Scotia and Labrador will not change that. Every year, in the fall, it becomes necessary to start using Holyrood. This point is based on system load and transmission constraints onto the Avalon. Each unit is started when necessary and loading is minimized but must be kept above a minimum operating point (70MW per unit IIRC). The addition of a capacitor bank at Come By Chance as part of the Long Harbour project and the addition of TL267 delayed the startup times of the Holyrood units in the fall, advanced the shut down times in the spring, and permitted more power to be moved from the west to the Avalon. This all reduced use of Holyrood.

    The addition of the infeeds from NS and Labrador don't change this pattern, they just allow Hydro to further offset Holyrood with import sources but they must still operate at or above minimum design levels and during the winter they are needed to supply power and provide spinning reserve. If you look at the daily reports posted to the PUB website you can see that Hydro imported power over the Maritime Link primarily to maintain reserves instead of loading on island units.

    PlanetNL is not wrong in that price elasticity will impact how much power is used nor that the PUB and Hydro appear to be caught in a state of flux regarding the rate structures to be used going forward.

    K

    ReplyDelete
  21. K - there is a new wrinkle about to happen. You're totally on the right track except for one piece.

    Historically we are used to Holyrood occupying the position of being the expensive energy provider. Normally, if we can reduce energy usage, we stand to gain from considerable fuel savings and the average cost of energy production goes down because we use less high cost oil-fired energy. This is an example of conventional economic theory: the marginal cost provider in the system is the highest cost plant.

    Once the Labrador infeed begins, as you note, Holyrood adopts new minimum operating points and we add Labrador recall power to top off our total energy needs. But there's the new wrinkle. Let's imagine that in 2018-19 consumers need less power than Hydro is forecasting because people are choosing to go efficient to combat constantly rising rates. Will we use less Holyrood power? No - that can't be reduced further so we will use less 0.2 c/KWh Labrador recall power. The ultra cheap energy source will be our marginal cost input - normal economic assumptions have been flipped upside-down. As consumers become more efficient and energy requirements fall, the average cost of generation will rise. Muskrat rate madness begins very soon.

    The point of the "odd" comment is to highlight this economic oddity created but seemingly not recognized by Hydro executives as evident in their testimony at the GRA hearings. If the top execs can't figure this out, Hydro is a ship without a rudder.

    The PUB and the CA really need to question Hydro deeper on the dynamics of the proposed operating scheme, particularly in the face of highly probable falling energy requirements. The PUB should demand resubmission of dispatch forecasts as Hydro's GRA submission is presently all over the place.

    PlanetNL

    ReplyDelete
    Replies
    1. Thanks for your reply. I realize I'm late posting my own reply but my schedule did not permit me to check back sooner. Hopefully you see this.

      The point I was trying to make is that the minimum operating levels of the Holyrood units are not new, so even before interconnection there were times during the year when Holyrood would be at its minimum operating levels and island hydro would have to back off as load dropped in the normal day to day and seasonal cycles. The goal though was to minimize Holyrood use and maximize hydro use. In the end I don't see this as anything new or groundbreaking.

      With the interconnections Hydro has a new source of cheap supply, albeit relatively small though the cost of delivering the small amount of energy from Labrador will be huge thanks to the LIL cost. Though that is not getting past on to we ratepayers.

      What a messed up situation.

      K.

      Delete
  22. To Heracles: some History, as you say you know little of Joey Smallwood.
    In 1965 I was finishing high school and embarking on obtaining an engineering degree, via MUN and NS Tech. We had a journalist who watched the proceedings at our government House of Assembly . This from his piece called "Quebec may get Churchill Falls Power". The piece was published March 11 , 1965 in the Telegram, It reads:
    The House of ssembly learned yesterday, in a round about manner, that Churchill falls power is likely to go through Quebec. Brinco will start searching immediately for " the most economic way" to transmit Labrador hydro to to the five eastern provinces, including Quebec.
    Nfld's needs will be supplied through transmission lines under the Strait of Belle Isle, the House was told. But significantly there was no mention of the submarine cable under the Cabot Strait. ( You may know Heracles, that now called the Maritime Link, this was called the Anglo Saxon route, as being different from the french Quebec route)
    Joey had brought Mr Robert Winters (the Chairman of Brinco) to speak, but Joey first told the House that the project would start this spring, and that "Nfld, as the prime owner of the power, must now and always, have first claim on it and that Nfld's interest is and must always be paramount...and that his government is delighted with the sincerely and strength of Mr Winter's feelings in this regard"
    Now it was planned to get ahead with harnessing the Churchil Fall (six million hp )first and tackle Muskrat (3 million hp ) later on.

    Now our wily reported picked up on, and quoted this Heracles: "it was agreed between us today that the Preece, Cardew, and Rider report on transmission of power to the island of Nfld via an overhead transmission line and a short submarine line across the Strit of Belle Isle would be proceeded with as part of the whole project. Thus, Churchill power would flow into the island power grid at Deer Lake by 1969 or 1970, and as the Premier puts it ; Labrador power will be made available to "sister provinces of Canada"
    Part 2 to follow.
    Winston

    ReplyDelete
    Replies
    1. Now UG raeders will recall that Heracles compares Nfld to the Frog and the OX story, which goes like this:
      One afternoon a grand and wonderful ox was on his daily stroll, when he was noticed by a small haggardly frog. The frog was too impressed with the great ox , impressed to the point of envy. "Look at this magnificent ox! ' he called to all this friends, He's such a grand size for an animal, But he's no greater than I am if I tried" The frog started puffing and swelling from his normal size. . "Am I A large as the wonderful ox?" he asked his friends. "No, no not near as grand as the ox." they replied.
      So, the frog puffed himself up more and more , trying to reach the state of the ox. "Now? now?" asked the frog?
      "No, no. But please, don't try anymore , " pleaded his friends.
      But the frog continued to puff and swell, larger and larger until he finally burst.
      Now, I think there is value in Heracles story and comparison, that we have had too many Nfld frogs and too few great ox. And Heracles says we are about to burst from our financial debt, from the Muskrat fiasco.
      Joey part 2 to follow.
      Winston

      Delete
    2. Now our journalist reporter in 1965 says " Sisterly relations between Quebec and the Nfld governments have been rupture for some time. This was the first indication by the Premier since the sisterly slug-fest commenced that Quebec would get even enough Labrador electricity to pop a slice of toast. ( As Heracles,may know that Joey thought to bluff Quebec with Anglo Saxon Route Madness, via marvelous technology of underwater cables). Our journalist reminds his readers that " Before yesterday's statement the Premier had vigorously maintained that any transmission route other than his "Anglo -Saxon" line was unthinkable. Now BRINCO will commence immediate investigations of the most economic way to transmit Labrador power to these five provinces. Provided Nfld gets all the power it needs "we are happy to have the power that is surplus to us delivered to our sister provinces by whatever means and route may prove to be the most efficient and economical and consequently most profitable to Nfld".
      When sisterly thirsts have been thoroughly quenched with Labrador power (says our reporter) , he then quotes Joey further "we would be most happy to see the surplus power go toward satisfying the needs of our friends in the United States" So, "BRINCO will start a survey on the amount and cost of development of this power. And Mr Winters tells me of the very great desire that exists of Ontario and , New York and New England for all of the power that Nfld can produce. Indeed, one great organization wants to buy the entire six million horsepower output of the Upper Churchill".
      Now Heracles should understand that few in Nfld knew what a watt, or kilowatt or megawatt was, so Joey talked in horse power, and of harnessing the horsepower, as in those days, horses were still common in rural Nfld, and Joey had the skill to fool most of the Nflders for decades, with his schemes of great new industries, lots of debt and jobs, especially at election times. And he was a friend of Fidel, I recall, and industrialists John Shaneen and John C Doyle , who became a fugitive in Panama, being chased by the FBI. Crooks hung at his coattails, and cost plus his methods.
      Part 3 to follow
      Winston

      Delete
    3. And Heracles, Joey told the House "there was no doubt whatsoever that all the water power in Labrador can be produced and sold at a profit for a lower price than any other power in North America" .
      And so the Premiers announcement " was greeted with loud desk -thumping applause from all government members present." And Mr Winters was invited to address the House, the first "outsider" since the national president of the Imperial Order Daughters of the Empire visited last spring.
      Now of course winters praised Joey, and said "he knew the project was the dream of the people of Nfld for a great many years and that , in that regard, BRINCO thought of itself as trustees of the people of Nfld.
      Now Heracles, note that there is no mention of the wishes and benefits to the people of Labrador, nor of the aboriginals, in particular , the Innu who occupied and used those lands, that was soon to be sheltered in poor quality shacks on the coast, to make way for the flooding.
      Now Winters said "Sometimes we may have been overly reliant on one particular means or avenue of doing it.. but it has been demonstrated that there is more than one way" And " the Preece, Cardew, and Rider report would be a help to BRINCO. It's advance technology will 'put BRINCO in a position to handle other such developments all over the world" And Winters said that they "would seek to make Churchill power available , first to Nfld, then to neighbouring provinces and ...to the United States. An imaginative scheme it was , he continued..... it would involve at least two provinces working together.(but Winters did not name the two provinces ) He said "We must be willing to submerge our interests at a time when perhaps this is not easy. ....as the Churchill is one of the greatest projects now being undertaken in the world and all Canadians should be proud of it.
      To this both government and opposition members applauded.
      And so the journalists concluded his piece with this comment: The House was left to ponder on the fact that whatever interests are submerged it seems less likely that Churchill Falls power lines will be.
      Now what this journalists was saying was, that not only were the underwater cables not to go to Nova Scotia, as previously promised by the Premier, but that the cables acros the Straits of Belle Isle to Nfld would not happen as well. That the House and the people were being told lies. That power to Nfld first was a fable, like the frog and the ox story.
      And so , in 2018 we see some dirty coal power imported from NS, our cheap clean island power about to be exported to NS for nothing, and a little Churchill Falls power promised to arrive on the isalnd this year, power which costs 2/10 of 1 cent to produce and Nfld Hydro wants to charge us Holyrood oil power rates of 13 cents or more.
      Now the journalists was of course , Ray Guy, an ox you might say. Joey, a frog, if you learn more about him. Then along comes a Nfld frog bigger than Joey, who reinvents the benefits, profits and gravy, of the Anglo Saxon route.
      So Heracles, Yes I have one foot in the past, I try to know our history, but do not live in the past.
      Winston

      Delete
    4. Ray Guy was astute as to the mentality of NLers and the dodgy con artist they elected as their politicians.. from a MUN convocation oration honoring Ray Guy..

      Covering politics in what he called “the land of the rising scum,” in the House of Assembly, Guy parodied Smallwood’s great announcements. At one point Joey, in full rhetorical flight described a Labrador lake as “six times larger ... than the Sea of Galilee” and Guy reported the event in biblical prose, “And it came to pass in those days that ... Joseph gathered together all the scribes and high priests and them that were exceedingly brown of nose and did pass ... into Lab-rador meaning the Land Joe Gave to Doyle. [And he spake unto them saying] Behold, O ye congregation of hangers on; we passeth over an exceedingly stunned people ... they seemeth not to know [a] bee from an bull’s hoof... Verily, I say unto you they are like unto a manner of people that falleth to the ground and misseth. But fear not for in stunnedness they were conceived and in darkness and superstition they do travail from generation unto generation.”

      Very astute, very astute indeed...

      http://www.mun.ca/gazette/2000-2001/june14/convocation7.html

      Delete
    5. Just think Winston, offshore oil was not even known to exist at the time, and Joey was already shouting "burn your boats". NFLD would be "industrialized" by Valdmanis, that whiz kid from Lithuania? and good old Johnny Doyle, Big Al Vardy, Shaheen, and scoundrels all. QC had Duplessis, we had Smallwood. I agree with Heracles, let's put this era behind and attend to business of the day.

      Stan, we need a project update. Ministers of the crown, what deal has been struck? What is the current path forward?

      People, what leadership are you prepared to vote for? I feel more like the dried cod in that Toronto fish store some years ago; buddy you're a long way from home!

      Delete