NB

Questions remain over multibillion-dollar dam fix

Despite complaints from several quarters, the energy minister insists a huge, multibillion-dollar overhaul of New Brunswick’s biggest hydroelectric plant will undergo proper scrutiny before any work is done.

Mike Holland has been under fire since his Progressive Conservative government passed an amendment to the Electricity Act in late 2021 that removed a key NB Power requirement: it will no longer have to provide expert testimony to the New Brunswick Energy and Utilities Board to see if the Mactaquac Generating Station is economically feasible and in the public interest.

The Six Chiefs of the Wolastoqey Nation recently complained there would be little independent financial oversight of the refurbishment of a dam and power plant near Fredericton that’s disrupted the lives of their Indigenous communities over the last 55 years.

Even the regulator’s late chairman, François Beaulieu, complained to a legislature committee last year that his board’s role on the project had been greatly diminished, and it would no longer be able to provide a sober second opinion.

In an interview last week, the energy minister gave new insight into why his government passed the bill.

Holland and Premier Blaine Higgs wanted NB Power to shed a huge chunk of its massive $5-billion debt and get to a sound financial position in line with that of other Canadian utilities. But NB Power officials complained that past governments and regulators had kept power rates unreasonably low.

So Holland said he asked the utility what it wanted to get to the right financial position.

“I had been saying for a long time we needed to see better performance from the utility, we need to see a trajectory where they achieve their financial goals. That bill came from going to them, and saying, ‘What do you need? And what does it take to facilitate it?’”

When the regulator last reviewed a big refurbishment at NB Power in 2002, it rejected an overhaul at the Point Lepreau Nuclear Generating Station. After examining the $845-million proposal in detail, the board, known as the Public Utilities Board (PUB) at the time, recommended mothballing the plant because it wasn’t economically feasible to keep it going.

But the Progressive Conservative government of Bernard Lord rejected the expert advice and went ahead with the refurbishment, which would eventually go $1.2 billion over budget. On top of that, Lepreau’s performance has been shaky since coming back online.

Holland said his government did not change the rules to save itself similar embarrassment if Mactaquac’s overhaul became a white elephant and went way over budget.

“It’s not a factor on what we’re talking about here,” the minister said, pointing out the two projects were very different. He said over and above the baseload of electricity Mactaquac provides, it’s also New Brunswick’s most important renewable energy source. Such a consideration has become increasingly important due to concern over the burning of fossil fuels, which contributes heavily to global warming.

NB Power last month filed an application to the provincial government seeking an environmental approval to do the overhaul and hopes to start work next year.

Still missing is a reliable cost estimate. Seven years ago, the former president and CEO of NB Power, Gaëtan Thomas, said the overhaul would be at least $3 billion. More recently, various media reports have cited costs of between $2 billion and $3.6 billion. In NB Power’s latest application for an environmental impact assessment, none is provided.

“As project planning progresses, cost projections are being updated,” said Dominique Couture, the public utility’s spokesperson, in an email to Brunswick News. “We expect new estimates to be submitted for thorough internal review later in 2023.”

She also argued that finances could not be the sole factor in making a decision on Mactaquac: given the need to combat climate change, she described the refurbishment as the most significant investment in clean energy in New Brunswick in half a century.

“A project this important requires the appropriate approval process which allows for all relevant considerations to be factored into a decision – including economic factors, environmental impacts, economic stimulus for the province, and quality of life benefits for landowners, to name a few,” she wrote.

“The Mactaquac Life Achievement Project will go through a stringent governmental approval process, which ensures all factors can be considered as part of the decision, versus factoring only the potential economic and rate impacts. This is consistent with practices in other parts of Canada and recognizes the importance of a project of this magnitude to our province.”

Liberal energy critic Keith Chiasson agrees that the provincial cabinet should have the final say on Mactaquac because it is such an important project.

But he still wants to see a full, independent review, with experts testifying under oath, to see how much it will realistically cost.

“The issue is, how much trust do we have in Blaine Higgs and his government?" Chiasson said. "To have government have the final say, that’s fine, but to have Blaine Higgs have the final say, that’s where we have an issue because of his lack of transparency and the way he’s been handling the province the last few years.”

Green party Leader David Coon said it would be difficult to come up with a position for or against Mactaquac’s life extension till the year 2068 without having the proper facts.

“This is a big project with big implications, and we need to drill down into it,” Coon said. “Normally, it would be a process where the EUB renders the decision based on all the evidence presented to them in their hearings. It’s an excellent and transparent process that gives us an answer whether it makes economic sense."

John Chilibeck, Local Journalism Initiative Reporter, The Daily Gleaner