Get wise on Energy – And Prosper

“A fool learns from his experience. A wise person learns from the experience of others.” Otto von Bismarck

The greatest fool offers unsolicited advice. That being said, here are some suggestions on how the Liberal energy policy could be improved. The government is not is the business of making money or investing our tax dollars with any hope of return, at least not in the conventional sense.

Take the idea of extending four lane highways all over the province, as touted by the economic gurus at a cost of hundreds of millions. I don’t quite understand who is profiting from these highways except for the construction companies. At least in the energy arena, there is a hope that a well thought out investment will eventually add prosperity via lower energy costs.

  • Energy Production

For example, New Brunswick will need to replace its oil-fired generation and phase out dirty Minto coal in the future. It’s always nice to have a plan B if the Lepreau 2 idea doesn’t pan out economically. How about a trip to Newfoundland for some fishing? At the same time, have a chat with Premier Danny Williams of Newfoundland who has two great hydro sites (Gull Island and Muskrat Falls) that have 2800 Megawatts total capacity and will cost $9 Billion dollars to develop.

If New Brunswick were to offer to partner on this project for 25% of the costs, it could be a good deal for both parties. Our cost might be roughly $2.5 Billion for 700 Megawatts. This is more than equivalent to the output of a new Lepreau nuclear plant and the cost is not all that different. This reduces greenhouse gases from oil generation and inflation will lower the real cost over the years. With open access now available through Quebec or through a cable to Nova Scotia, it appears economic.

  • Reducing transportation fuel consumption

The fuel cost problem is far from solved. Temporarily lower crude prices and taxes do not make a long-term solution. It will take years and smart policy to change the vehicles in NB to higher mileage units.

Lower the highway speed limit by 10 km per hour. This idea is not expensive to implement but very effective in reducing wasted gas. It will bring a guaranteed 5% overall saving in fuel and fewer traffic accidents to boot.

How about an annual registration rebate for new vehicles with city mileage ratings lower than 9 liters / 100 km, and a penalty for ratings over 9? For example, Honda Insight (rating 3.9) gets an annual $510 rebate. Ford Focus (rating 9) no registration cost. GMC Yukon (rating 17.3) pays $830 registration per year.

A serious look at the government fleet could serve as an example for others by reducing the size of cars.

  • Home and Business Energy Conservation

They say that if you can’t measure something, you can’t manage it. Efficiency NB could assign energy ratings (kWh equivalent / square foot) to the building stock in the province and tackle the worst cases of poor insulation in cooperation with the home and business owners. In the cases of rental units where tenants pay the heat, units not meeting the minimum efficiency rating must be moved off the rental market. No person in this province should be cold in the winter.

  • Rural heating supply

Wood is a renewable resource. In rural areas many people use wood as their heating supply. This provides NB Power with some benefits from peak reduction and reduction of system capital improvements. It isn’t economic to run natural gas distribution rurally due to distance. There are negative health issues involved in urban burning of wood but natural gas is available to many city dwellers. The province could contract with wood suppliers, via crown lands supply, to partially subsidize a base supply of wood to rural residents until all homes are brought up to a reasonable efficiency standard. The subsidy of $25/ cord to a maximum of $150 / year would be available for 5 years as a transition step.

  • Electricity Rates / NB Power

The present declining block rate structure provides those who use a lot of electricity with lower rates. Electricity doesn’t get cheaper to produce after the first 1300 kWh’s. The PUB has wanted to implement this but it hasn’t happened. If done on a revenue neutral basis, a flat rate shouldn’t be a large difference. NS Power has developed an interesting time of use rate with thermal storage units to provide economical heat and flatten peak loads with off peak electric heat charging. We should investigate.

Any new thermal generation in the province must be designed with co-generation. NB Power must be encouraged via the PUB to retrofit where possible and co-operate in co-generation initiatives.

  • Energy Report Card

The department of Energy should be mandated to provide an annual energy report to citizens of New Brunswick. This report will track the usage of liquid fuels in the province by sector usage (transportation, industrial, home heating, etc.), green house gas emissions and other indicators that are deemed useful in the measurement of our progress towards a smaller sustainable energy footprint.

All too often government policies are designed not to succeed, but to give the impression of action. To success we must have focus, the will to educate, to advocate change and to follow through with perseverance.

If our new premier were listening, I would pass along this quotation. “If your heart is in the right place and you have good taste, not only will you pass muster in politics, you are destined for it. If you are modest and do not lust after power, not only are you suited to politics, you absolutely belong there.” Václav Havel

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Grading Graham’s energy platform

“A goal without a plan is just a wish” –Antoine de Saint-Exupery

Shawn and the energy department have a lot of work to do. Winning the election gives him a chance to mould our energy future in the way he believes is best. At the moment he only has a 50% chance of getting it right. His majority is slim and gives him little room for error. Although energy was a prime element in the campaign and perhaps the issue that won the election, it is not clear if he realizes how bad the situation is. I wasn’t a fan of Bernard Lord’s energy policy but Shawn’s has some weaknesses as well. Let’s take a closer look at our future with a Liberal government and give his ideas a rating.

Conservation of energy – home renovations grants

It’s a great idea to speed up the energy efficiency program. If I understand correctly, the Liberal $2000 grant for home energy renovations should be very popular, as it is not tied to a percentage of money invested. This is both the strength and weakness of the Liberal plan. Its generosity will ensure that a large number of people will take advantage of the plan. If properly designed, it will ensure that many good energy improvements take place but perhaps less investment per household. His goal of 30,000 homes per year will make the program large enough to make a difference, but the lack of contractors may slow the program in the short term. This is a huge program for Efficiency NB.

Grade: B

Renewable Energy

Mr. Graham would like to make New Brunswick a green power pioneer with wind, tidal and solar energy. Nothing to argue about here except that solar (photoelectric) is still very expensive.

Grade: A

Relationship with NB Power

Shawn will review the idea of a pipeline to the north with NB Power as the anchor. Natural gas is best burned in a home furnace at 90% efficiency, not in a power plant at 40%. Unless it’s a co-generation situation, the business case is weak. Time of use metering is a good idea to flatten peak demand. Perhaps the Orimulsion tactic was helpful in the election but do we really need an inquiry to understand why Hugo Chavez decided not to sell us heavy oil. Wouldn’t it be better to keep our eyes on the future? NB Power is like the movie “Snakes on a plane.” Once you get on board, you realize it’s going to be a wild ride. NB Power is going to need big rate increases to cover oil price increases, the Coleson Cove refit, wind power and the Lepreau refit. The sooner the increases come, the less long-term political pain there will be.

Most governments have used NB Power for economic development and political purposes until it’s in a terrible financial state and then let it twist in the wind. A smart Liberal government would find a good President and let it be managed with business sense. Any government directives to the corporation should be transparent to the public.

Grade: C

Nuclear Power

Mr. Graham seems to indicate that Lepreau 2 is on his agenda if the feasibility study comes in at the right price and the right partners (e.g. Nova Scotia). The idea to export power to the United States should be reviewed carefully. The last three annual reports indicate that power is being sold at cost of production across the border. Unless advantageous contracts for export power are signed in advance, it should not be the basis for generation investment.

Grade: B

Public Utility Board (PUB)

The Liberals will retain the previous energy board’s power and structure but expand the range of investigations into power generation contracts. OK. Will they also try to reduce the cost and length of hearings? The only people who are winning are the lawyers and consultants at hundreds of dollars an hour. Liberals suggest that rate increases would be phased in over three years. Given my calculations of a requirement for a 40% power rate increase over the next five years, rate increases will be in the double digits nearly every year.

Grade: C

Transportation fuel conservation

Mr. Graham’s government would provide a tax rebate of $1500 on the purchase of an energy efficient hybrid vehicle. This is a good starting point for discussion. While this idea has merit, does this mean that a GM Sierra hybrid half ton with city / highway ratings of 14 /11 Liters / 100 km would be eligible? What about the small diesel cars? Aren’t we trying to encourage high mileage ratings?

When he proposed a cut in the tax on gas, I was momentarily flabbergasted. Then I understood

A. The first casualty in an election is effective policy.

B. You make the promises that get you elected.

C. Elections are won on pocketbook issues.

D. Just ask Joe Clark about gas taxes.

Grade: B-

Oh I forgot about moving the energy department to Saint John. Well, maybe we should forget that idea. Harbour cleanup in a hurry would satisfy most of Saint John. For now, I would give the Liberal energy policy a B minus rating but I reserve the right to change that rating up or down as the world turns. I do like his aggressive approach to solutions. What is it they say about happiness? … Something about having hope for the future. Well, for the moment we have hope.