how much is NB Power worth
HOW MUCH IS NB POWER WORTH?
- SECTION A: BETTER DEALS ARE AVAILABLE
- SECTION B: THE NB POWER GROUP OF PUBLICLY-OWNED OR RUN COMPANIES
- SECTION C: VALUE OF NB POWER ASSETS
- SECTION D: COSTS to NB taxpayers in the proposed deal with Hydro Québec:
- SECTION E: LIABILITIES
- SECTION F: REFERENCES
It is reported that environmental analysts and sustainability experts are stating that "New Brunswick has the potential to become the Saudi Arabia of wind-power." In August, 2008 Premier  Shawn Graham told world class energy firms in New York that "Our size, location mix of assets support New Brunswick as a living lab for innovation."
No wonder that the news of the proposed sale of  [NB Power] to  Hydro Québec has brought major shock and awakening in  [New Brunswick] and the rest of the Maritimes. This crisis has forced us to recognize that adjustments must be made in the management of public assets.
The following is an examination of the value of NB Power's publicly-owned holdings, partners, the proposed deal and impact on the people of New Brunswick. It was developed at the request of my  [neighbours].
Though by no means an exhaustive or expert report, I hope that it will help to fill in some of the under-reported facts behind the controversy about the sale; information links for further study are included below. I am grateful to those who took time to contribute their knowledge, information and wisdom.
All My Relations, Willi Nolan
SECTION A: BETTER DEALS ARE AVAILABLE
Because we, the public, own NB Power outright, we can choose from many ways to earn money with it - if we run our business competently. Economic analysis shows that NB Power is actually in better financial shape than Hydro Québec! Moreover, New Brunswick is well positioned to take advantage of "a whole spectrum of alternatives" including various forms of partnerships with Irving's Portage Power, New England States, the federal government, the Maritime Provinces, the Province of Québec and many others.
Besides all of the potential that we built and paid for, provincial deal-makers have neglected discussions related to self-sufficiency, such as the earning potential of NB Power's grid telecommunications operations and important sustainable economic development opportunities for hard-working New Brunswickers.
Before decisions are made to retain or sell off NB Power assets, transparent policies are needed to manage the assets of New Brunswick Corporations, as well as business and social development, energy and communications initiatives.
American Grassroots activism has pushed energy regulatory agencies toward a new decision-making matrix called “least cost planning.” In this new accounting, utilities must include environmental costs, make renewable energy a priority and pursue alternatives (i.e. increasing energy efficiency, installing smaller, distributed power plants, etc.) before building new conventional power plants or transmission lines. It was reported that the U.S. Department Of Energy (DOE) claimed that examining non-transmission solutions was outside its jurisdiction. Apparently, so do NB Power execs - no wonder New England is looking to buy power from Canada!
The good news is that NB Power broadband infrastructure could be helping us manage services like surveillance, meter reading, control traffic lights, administer databases, media and secure communications systems for police, firefighters, emergency-first responders, health, education, community and municipal workers. It could also be used to offer things like VoIP and teleconferencing for residents!
Did you know that Fredericton and Moncton were honoured as two of 2009's top seven Intelligent Global Communities for "exemplary use of broadband and information technology to develop their economies." Apparently, combining broadband, entrepreneurship and universities in Fredericton created 12,000 jobs.
How is all this related to NB Power? Read on, it seems that the province needs to do some catching up with itself!
It's really great that people are srhaing this information.
SECTION C: VALUE OF NB POWER ASSETS
In the controversial deal, Hydro Quebec may have acquired some of the more interesting assets of NB Power, predominantly:
1)An extensive telecommunications system - huge replacement costs.
Operated and maintained by NB Power Transmission, our "smart-grid" aka. "power and data network" capacity is currently utilized in NB Power's superior grid monitoring system and new pilot projects. Reports on the many potential uses of our "secure and ubiquitous communications" system deployed under contract with XWave (an Aliant company) must be sitting on shelves who-knows-where; this is a tremendous income earning asset.
What are we not looking at? Consider recent history - small internet service providers (ISPs) were wiped out by telecommunications and cable companies who controlled the infrastructure. Powercos, including NB Power, are now in this same position relative to the telcos and cablecos because power and data needs and standards have converged, they are inter-dependent. If NB Powerco fails to, New Brunswick communities can choose to support district utilities and community co-ops to exploit the opportunities. Our state-of-the-art power and data transmission capacity could save the province money and, I repeat, could be helping us manage services like surveillance, meter reading, control traffic lights, administer databases, media and secure communications systems for police, firefighters, emergency-first responders and municipal workers. It could ALSO be used to offer things like VoIP and teleconferencing for residents.
Businesses, government and average New Brunswicker can save on power consumption and provide new business opportunities by integrating programs like Efficiency NB to enable us to use competitive standards (ie. the new US standard Open Automated Demand Response or Open ADR) to manage our energy use.
Imagine New Brunswick leading an economic renaissance by creating a competitive environment where wholesale providers at central points offer power and data connections, and where business, home and institutional users collectively participate in demand management and emergency signalling. We own a utility that can ensure that we all have highest quality, safe, affordable electricity AND communications/internet (and TV, if we want it)!
Smart Grid stimulus investments in the US. are in place to save ratepayers billions in capital costs and help lower utility bills.... money saved is money earned. This is obviously worth considering to get NB Power out of debt.
Besides smart-grid investment, the U.S. Department of Energy (DOE) authorized grants to private, non-profit, mission-driven and community development organizations for the "Low-Income Community Energy Efficiency Program." Under the program, financing is provided for projects and businesses that improve energy efficiency, develop alternative, renewable, and distributed energy supplies, create business and employment opportunities for low-income residents, and increase energy conservation in low-income rural and urban communities.
New Brunswickers deserve to know everything about the assets, as well as the debts of the NB Power group of companies..
2) 895 MW of Hydroelectric Dams - replacement cost of approximately $4 billion dollars. Hydroelectricity supplies 75% of electricity consumed by New Brunswick customers. I understand that relatively simple and inexpensive new technologies can easily increase the generation capacity of he dams without adverse effects on the natural environment... probably what Hydro Québec was planning to do with them...
3) 6,829 km of Transmission Lines - replacement cost over $3 billion dollars. NB Power's transmission corridor is what Hydro Québec and other big players want to get control of... why just buy the milk if you can buy the cow for the same price?
4) Control of Grid Access to the New England states - new U.S. regulations severely restrict approvals for new dirty energy projects. The market is waiting to be tapped.
5) A Distribution System of over 20,000 km of lines - huge replacement costs,
6) 376,964 customers - New Brunswick business and residential energy consumers - that's us!
7) Point Lepreau, a Fully Operational 635 MW Nuclear Plant (worth $6 billion dollars) I say, let HQ have it...
8) $414 million dollars of financial assets (i.e. cash) accumulated for the decommissioning of Point Lepreau and the management of its used fuel disposal.
9) NB Power's Public Corporations - with all the financial advantages of being not-for-profit PUBLICLY OWNED corporations that earn money! Our holdings (see above) include: NB Power Holding Corporation, NB Power Distribution and Customer Service, NB Power Generation, NB Power Nuclear, NB Power Transmission and affiliate, the New Brunswick System Operator (NBSO - a government corporation that manages our transmission grid).
SECTION D: COSTS to NB taxpayers in the proposed deal with Hydro Québec:
i) The Cost of Transmission and Distribution With “Fair and Reasonable” Profit; NB Power operates on a not-for-profit basis, other companies may not;
ii) The Recovery of the Additional Costs of Supply Beyond the Heritage Pool Supply (level of supply we have now up until the HQ deal is signed);
iii) All Additional Costs of Generation Through "Market-Based Approach." I understand that the New Brunswick System Operator (NBSO) is responsible for reporting these costs.;
iv) Costs to Upgrade the Eel River and Madawaska Converter Stations and Transmission Lines. We are not clear if this is needed to better serve New Brunswick or if it is intended for Hydro Quebec to gain better access to U.S. markets.;
v) Dismantling the Mactaquac Dam (should permission to rebuild be denied by or is unacceptable to Hydro Quebec);
vi) Decommissioning and Site Cleaning of the Fossil Fuel Plants in Belledune, Coleson Cove, Courtenay Bay, Dalhousie and Grand Lake;
vii) Any Point Lepreau Costs that are Over and Above Costs of Compliance with Federal Requirements; How does the HQ deal affect our relationships with the federal government, Atomic Energy Canada Limited (AECL) and the Canadian Nuclear Safety Commission (CNSC)?
viii) All Costs due to the Open Access to the Transmission Network: I understand that the New Brunswick System Operator (NBSO) is responsible for reporting these costs.;
ix) All Supplemental Costs Related to Renewable Energy: We may find ourselves in a situation like Ontario's where renewable energy is purchased at a very high rate, creating a barrier to successful development and reliance on harmful, expensive, non-renewable power.
CHANGES TO NB ENERGY REGULATIONS
According to Dr. Yves Gagnon, K.C. Irving Chair in Sustainable Development, Université de Moncton, the deal will alter "the regulatory framework of the energy sector in New Brunswick" to conform to the Quebec framework. It is thought that the New Brunswick Energy and Utilities Board will have their hands tied with regard to "rate base inclusion" of the numerous costs outlined above.
SECTION E: LIABILITIES
New Brunswick taxpayers are still liable for these costs and risks with or without the sale of NB Power. With the sale of NB Power, since our Government would sell all its revenue generating energy assets, the costs associated with these liabilities would be assumed by the taxpayers, instead of the ratepayers, including:
I) The Refurbishment of Point Lepreau,
II) The Operational Risks of Belledune and Coleson Cove which will be operated, without profit, at the direction and for the benefit of Hydro Quebec,
III) Environmental and Other Liabilities that are Not Related to the Current Operations of NB Power: What else don't we know?
IV) Liabilities Associated with the Pension Benefits Accrued by the Existing Employees of NB Power.
As Dr. Yves Gagnon wrote in his recent letter to L'Acadie Nouvelle, this is "Scary, to say the least."
SECTION F: REFERENCES
Irving media coverage of NB Power deal one sided - Professor says http://www.nbpowernotforsale.org/index.php?option=com_content&view=article&id=88%3Airving-media-coverage-of-nb-power-deal-one-sided-professor-says-&catid=1%3Alatest-news&Itemid=50&lang=en
Dr. Yves Gagnon, K.C. Irving Chair in Sustainable Development, Université de Moncton. January 18, 2010 "A Call To Reason" letter appearing in L'Acadie Nouvelle newspaper.
Two Canadian cities among world's seven most "intelligent" communities | IT Business http://www.itbusiness.ca/IT/client/en/Home/News.asp?id=51737
Team Fredericton http://www.teamfredericton.com/
Intelligent Community Fredericton http://www.intelligentfredericton.com/
HOW THE SMART GRID PROMOTES A GREENER FUTURE "The Smart Grid's single biggest potential for delivering carbon savings is in .... wattage... " http://www.oe.energy.gov/DocumentsandMedia/Environmentalgroups.pdf
Grids and grids: A smart grid, yes. A new national grid, no. http://www.grist.org/article/Grids-and-grids 4 Mar 2009
American Clean Energy and Security Act of 2009 – Title II: Energy Efficiency - Alliance to Save Energy http://ase.org/content/article/detail/5795
ILSR Submits Comments to FCC on Publicly Owned Broadband http://www.newrules.org/information/news/ilsr-submits-comments-fcc-publicly-owned-broadband
Energy Self-Reliant States: Second and Expanded Edition http://www.newrules.org/energy/publications/energy-selfreliant-states-second-and-expanded-edition
The Most Intelligent Communities in the World | Tourism-Review.com http://www.tourism-review.com/article/1856-the-most-intelligent-communities-in-the-world
US Smart Grid future looking bright? - The Energy Collective http://theenergycollective.com/TheEnergyCollective/50771 " ... Reduce peak electricity demand by more than 1400 MW, which is the equivalent of several larger power plants and can save ratepayers more than $1.5 ..."
Does the press get public broadband? - CNET News http://news.cnet.com/8301-10784_3-9726634-7.html "Municipal broadband is the building of a public broadband infrastructure .... Smart grid potential gated by broadband... "
Smart Grid, Smart Broadband, Smart Infrastructure http://www.americanprogress.org/issues/2009/04/smart_infrastructure.html "The home weatherization program can turn into a public-policy triple play, insulating homes, adding smart-grid technology, and installing broadband into ..." Wind Energy News http://www.windenergynews.com/content/view/1281/43/
NB Power Holding Corporation (HOLDCO) http://www.nbpower.com/html/en/about/operating/operating_companies.html
NB Power Distribution and Customer Service (DISCO) http://www.nbpower.com/html/en/about/operating/customer_service.html
NB Power Generation (GENCO) http://www.nbpower.com/html/en/about/operating/generation.html
NB Power Nuclear (NUCLEARCO) http://www.nbpower.com/html/en/about/operating/nuclear.html
NB Power Transmission (TRANSCO) http://www.nbpower.com/html/en/about/operating/transmission.html
The New Brunswick System Operator (NBSO) - affiliate http://www.nbso.ca/Public/en/about/executive.aspx
Aliant-XWave & Nb Power http://www.xwave.com/files/credentials/NB%20Power2008.pdf