13 January 2014

The Third Line #nlpoli

Most people in Newfoundland and Labrador never think about the electricity into their homes.  They don’t know where it comes from and they certainly don’t have any idea how it gets from the generating plants to their fridges, washing machines, and television sets.

People are thinking about those things a lot more these days, in the wake of the recent power supply crisis.

One of the issues you will likely hear a lot more about in upcoming hearings by the public utilities board is about a new power transmission line from the hydro generating station at Bay d’Espoir across the isthmus and on to Holyrood.

Here’s some additional information about the project.

The 2012 Capital Works Application

Nalcor included one part of an improvement to the transmission line across the isthmus in its 2012 capital works budget.  The rationale for the project was simple enough.

NL Hydro had lots of electricity available from west of the isthmus given the closure of two paper mills and the seizure of generating assets from Abitibi and Fortis in 2008.  East of Bay d’Espoir, the transmission system was carrying twice the load of the system west of Bay d’Espoir.  That meant – among other things  - that the load on the eastern part of the line needed constant monitoring in order to prevent serious damage.  Opening of the Vale plant would only make matters worse. 

At the same time, all that electricity west of the isthmus could help cut back on expensive oil-fired generation at Holyrood. (Nalcor Application, page 1).  Nalcor had a problem getting it across the isthmus, however, since the wording of the application suggests there is a capacity limit. 

In the application to the public utilities board, Nalcor split the project into two segments to tie into decisions about the Lower Churchill.  The first half of the project would improve the connection from Bay d’Espoir to the Western Avalon terminal station.  That’s what the 2012 application was for.  Nalcor stated that the other half of the connection – from the Western Avalon terminal to St. John’s – would come in 2013.

Remember that this application came in 2011, after the provincial government approved the Muskrat Falls project.

In December 2011, Nalcor put the new transmission line application “in abeyance” in order to allow the company’s engineers to focus on dealing with the Muskrat Falls review.  In its second letter to the PUB, Nalcor noted specifically the number of requests for information associated with the transmission line application. Nalcor didn’t answer any of the questions before the decision to suspend the application.  For its part, the PUB noted in its reply that Nalcor did not appear to be ready for the application and that, interestingly, the application was the largest capital works project NL Hydro had submitted.

The 2013 and 2014 Capital works Applications

Both the 2013 and 2014 capital works application included a reference to the transmission line upgrade.

2013 Application (Volume 1, page 8, dated August 2012):

A major project to upgrade the transmission line corridor between Bay d’Espoir and Western Avalon (2014) is required to facilitate additional power and energy delivery to the East Coast growth area and meet transmission planning criteria.

2014 Application (Volume 1, page 7, dated August 2013)

A major project to upgrade the transmission line corridor between Bay d’Espoir and Western Avalon is required to facilitate additional power and energy delivery to the East Coast growth area and meet transmission planning criteria.

The 2014 budget includes spending estimates to build the line starting in 2014, with completion in 2018.  it falls under the company’s five year plan:

Expenditures for new generation and transmission assets are included in these estimates, specifically for the upgrade of the transmission line corridor between Bay d’Espoir and Western Avalon and the addition of a new combustion turbine at Holyrood. These projects will be the subject of a separate filing. (Volume 1, page 2)

To date, there’s been no separate filing.

Responses to Questions

Nalcor provided some additional information on the transmission line in its replies to intervener questions on the 2014 capital works application.

For example, in reply to a question about the growth in Hydro’s capex budget,  Hydro noted the need to to address aging generating and transmission infrastructure.  However, Hydro distinguished between that capital spending and the new transmission line this way:

For 2014, 56 percent of capex directly relates to addressing growth in customer demand with the most significant contributing projects being:

  • New 60 MW Gas Turbine on the Avalon, $46.4 million;
  • New Transformer at Oxen Pond, $15.3 million; and
  • New 230 kV Transmission Line from Bay d’Espoir to Western Avalon, $6.4 million.

Contradictory Comments from Nalcor

Ed Martin appeared on CBC Radio’s On the Go on Thursday, January 9.  When asked about Bay d’Espoir stated that there was “‘no economic justification” for the line across the isthmus “at this time”. 

He did not explain what he meant in light of Hydro’s capital works plan to build the line to meet growing demand on the Avalon with additional electricity from the main part of the island.  Instead, he launched into a discussion of hypothetical peak load versus non-peak load periods:  a At one point, the power available is all being used.  At another, it isn’t.  he didn’t discuss the specific situation during the blackouts in early January.

Martin said that the line would be the most expensive option with additional generation on the Avalon being more cost-effective.  Nalcor’s analysis, according to martin, showed there was no justification for the extra line.

Martin told CBC’s ted Blades that Nalcor would build the line eventually  - even though it wasn’t need and wasn’t cost-effective.  Hydro would build the line to deal with the situation of a double failure of Muskrat Falls and Bay d’Espoir so that Hydro could provide “load balancing”.  Since Bay d’Espoir is the major source of electricity on the island and was down in his scenario, Martin didn’t explain what load Hydro would have in order to balance it.

Martin’s comments sound confused and contradictory both within themselves and in comparison to Nalcor’s capital plans.  It’s not the first time that has happened when anyone connected to Nalcor talks about its plans: