Province, not power users, might pay shutdown costs
Published Friday November 27th, 2009
The provincial government could decide to spend up to $80 million to decommission three fossil-fuel power plants in New Brunswick out of its own pocket rather than make NB Power's ratepayers absorb the cost, Energy Minister Jack Keir said Thursday.
"It is very clear in the MOU (memorandum of understanding) it can be either," he said.
"Certainly at this stage, the decommissioning of Dalhousie is the only one that is going to be a factor in the coming years, short term in the first five or six years."
The Liberal government wants to sell most of the assets of NB Power to Hydro-Quebec for $4.75 billion, which would go to pay off NBPower's debt.
The deal also includes provisions for $5 billion in rate relief.
But Hydro-Quebec isn't buying NB Power's fossil-fuel power plants, including Dalhousie, Belledune and Coleson Cove.
Dalhousie is closing next year when its contract for cheap fuel from Venezuela runs out whether NB Power is sold or not.
But the memorandum of understanding to sell NB Power to Hydro-Quebec allows the Quebec utility to close Belledune and Coleson Cove with one year's notice and all decommissioning costs must be borne by New Brunswick.
Keir said the projected decommissioning cost for all three power plants combined is between $50 million and $80 million.
"The government will decide if that rolls into ratepayers or whether the government itself would fund that decommissioning," he said.
The cost of decommissioning Dalhousie won't impact residential ratepayers for the first five years of the deal because residential rates are frozen for that period, said Keir.
The energy minister said any decommissioning costs could be spread out over a number of years.
"It would depend on how long it would take to decommission the plant," he said.
Keir also said that the province will retain ownership of the Dalhousie facility and could find another non-power generating use for it.
But Opposition Leader David Alward said no matter how decommissioning costs are assigned, at the end of the day the people of New Brunswick will pay.
"Whether it is the New Brunswicker who is the ratepayer paying the cost or the taxpayer, it is going to come out of our pocket," he said.
Alward said it was just another example of why selling NB Power to Hydro-Quebec is a bad deal.
"They are not telling you about the other side of the ledger," he said.
That includes the decommissioning of power plants, upgrades to transmission lines and unfunded pension liability, said Alward.
"All those costs are going to have to come from somebody," he said.
"We are not going to get the benefits in the long term."
The Tory leader said he wants the government to explore the idea of finding another affordable fuel to burn at Dalhousie, such as biomass.
If Dalhousie closes, a long-term purchase agreement for electricity from Quebec could make up for that lost energy, he said.
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Comments (13)
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Shifting the bill around from one entity to another doesn't eliminate it, you simply bury it in the provincial debt. What's a bit more when you've already added $1.7 billion for our kids to deal with, right?
Maybe he should have stayed at Crane Mountain, instead of going into politics. The only reason he won Kings County is that he didn't have anyone to run against, who could do the job either.
Ratepayer
It all comes from the same pocket.
Average Joe Citizen just keeps paying more and more.
DC
Two things wrong with that ...
1. The province gets it's money from general public who are the ratepayers
2. It will cost way more than $80 million to decommission three power plants.
I didn't know it was even possible to dislike the liberals even more than I already did.
Jack Keir can't be this stupid not to distinguish between ratepayers and taxpayers. He must have meant Graham and his Liberal party. The money for decommissioning will come out of his party. That makes sense.