Proposed construction and maintenance spending yet to be approved
The Holyrood power generating station. Nalcor has been increasing its spending in its quest to keep the province’s energy facilities in good running order. — Telegram file photo
The province is spending billions of dollars on the Muskrat Falls project, but that spending is separate from the year-to-year cost of keeping the province’s main power generators up and running.
Newfoundland and Labrador Hydro filed its annual capital budget application for 2014 with the Public Utilities Board (PUB) Aug. 5. The utility wants approval for 96 projects, totalling $98.7 million.
Last year, the proposal was about $66 million worth of work, with $62 million in spending ultimately approved by the regulator.
The 2014 application represents more than a $30-million jump in requested capital spending year-to-year.
It is a next step towards a new normal for Hydro’s annual budgets. From 2008-12, average yearly capital spending was $59.3 million.
Looking 2014-18, the utility is expecting an average annual cost of $162 million for maintenance and upgrades.
For the 2014 capital budget proposal, more than 2,000 pages of detailed documentation was filed with the PUB by Hydro and can be found on the PUB website.
The utility states all of its proposed projects are required, in order to continue to safely provide power to customers — including Newfoundland Power — at the lowest possible price.
Of note, the utility needs to keep up the Holyrood Thermal Generating Facility for use as a key power plant and, as Muskrat Falls comes online, a standby facility until 2020-21. Hydro has provided the PUB with its plan for spending on Holyrood through 2023.
“The Holyrood capital projects contained in this application are necessary to refurbish and renew assets which are at the end of their useful lives, and which must be replaced to maintain reliability through to the completion of the Muskrat Falls development,” the documentation filed with the regulator states.
Outside of the Holyrood plant, proposed capital projects vary in location and purpose.
Plans are being made for the replacement of generating units and upgrades at Hydro’s isolated diesel plants.
Transmission infrastructure is set to be replaced at some sites, including: select tower foundations, power transformers, circuit breakers, insulators, surge arrestors, instrument transformers, disconnect switches, and breaker controls.
The utility is continuing multi-year projects already underway, including the addition of female washrooms to its single-washroom buildings.
The 50 MW power plants at Hardwoods and Stephenville — having operated reliably with little expense for decades — are now beyond their normal life expectancy and need work, Hydro states.
While some multi-year projects being planned will cost into the millions, two stand out above the rest.
One is the addition of a 60 megawatt turbine at Holyrood, requiring about $99 million in spending over three years.
The second is an upgrade of the transmission line corridor between Bay d’Espoir and the heavy power users on the Avalon Peninsula. That has been roughly estimated at $268 million over five years.
The PUB’s review of the Hydro capital budget application is scheduled to run into October.
Hydro also has a multi-year general rate application before the board. That application, requesting a rate decrease for most Hydro customers, is subject to a separate review.