When the Public
Utilities Board released the Interim Report of Liberty Consulting Group into
the causes of DarkNL last week, it was Nalcor’s CEO Ed Martin, the man earning
in excess of six hundred thousand dollars annually, who jumped in front of the cameras.
That’s big
pay for damage control.
Nowhere to
be seen was the senior man at Nalcor subsidiary, NL Hydro, V-P Rob
Henderson. Henderson was the first to emerge
in the early days of the ‘black-outs’ to confess Hydro’s deficient maintenance
practices; the Utility, he stated candidly, had failed to complete its summer
maintenance program. It was January and the lights were out; people were cold
in their homes or huddled in warming centers.
Henderson disappeared
from the public stage quickly; the honesty seemingly bad for Nalcor’s image and Ed
Martin’s, too. Martin became the official spokesperson, not only for Muskrat
Falls, but also for DarkNL.
Now, the
Liberty Group has essentially confirmed Mr. Henderson’s version of events even
if they were still understated.
It’s been nearly
four months since DarkNL. One does get
tired of Ed Martin’s spit and spin. Our long
winters are a drag, too. The body knows
when it needs a shot of Vitamin C just as the mind craves the reassurance that simple
honesty crowds the halls of government.
It is no
secret that the ‘spin meister’ is not big on disclosure. But Liberty was not assessing the Muskrat
Falls project or the current level of cost overruns. The Consultants were merely assessing Hydro’s
machinery, its capability to conduct normal maintenance and management procedures,
review its demand assumptions and generally evaluate its ability to keep the
lights on, especially in winter.
The Liberty
Report, as The Telegram noted, does not describe a group of “world-class”
experts. Having read the Report, the Paper’s Editor also concluded “there’s
nothing world-class about this situation”.
To its
credit, Liberty baldly stated the facts. It cites failures in the “operation of
key transmission equipment”, including a failure to replace transformers and
maintain major circuit breakers.
Quoting again
from the Report: “Liberty found that Hydro’s shortage of generation capacity
was exacerbated by a failure to complete planned outage work needed to ensure
the availability of its full range of generating facilities as the winter
season began.”
The situation,
it notes, “raises questions about Hydro’s operation” that it “did not complete
recommended maintenance activities on the equipment that failed…”
The Liberty
Report is damning criticism of a NL Hydro; a well-funded Utility by the
ratepayers of this Province. And, it did not stop there.
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Related Reading: ARE YOU IN THE DARK OVER NALCOR'S BLACKOUTS?
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Liberty said
Hydro held an “insufficiency of generating resources to meet customer demands”…,
that their demand numbers were based upon the temperatures of an average winter
day rather than an “average worst winter day”, that Hydro wasn’t even using the
right models to forecast electricity demand.
It stated
that Hydro relied, not on providing adequate generating capacity but on
‘outages’ to take us through periods of high demand.
Said Liberty,
“Hydro has planned its system to the same overall standard for many decades.
This standard provides for lower
reliability than what Liberty has observed in other regions of North America”
(emphasis added). It noted that
Hydro’s plan is based upon “roughly twice” the frequency of supply related
outages than found elsewhere. It found that Hydro “tended to allow decisions at
the margin to favor more versus less risk”. (emphasis added)
Liberty found that a “continuing
and unacceptably high risk of outages from such causes
remains for the 2015-2017
winter seasons”.
It failed to note that had
the Vale Inco smelter been completed on schedule the outage crisis would have
been far worse.
Among a
plethora of additional problems it goes on to raise the spectre that, even
after Muskrat Falls comes on stream, system reliability is in doubt; that is the
major item to be addressed in its Fall Report.
Given
Liberty’s indictment of Hydro, when Ed Martin faced the media quite possibly reporters
thought him ready to apologize and to resign.
It would have been the right thing for the CEO to do.
Martin had
no such plan. He went before the media
not to take responsibility but to place blame.
The man whose pay packet, last year, of $618,173 included a $141,425 "performance contract" came out ready to lay all the problems of Hydro at the feet of his predecessors. No one cared to remind him he has been at Nalcor since 2005.
In the
private sector, one whose management shortcomings are exposed in such grim
detail, as Liberty describes, would be fired! That is a necessary penalty for failures
which placed lives at risk, not to mention the Province’s economy.
