Things go better with “Coke”?

Recently NB Power came to Saint John to talk about the use of petroleum coke as a way to reduce the cost of heavy fuel oil for Coleson Cove now that Hugo Chavez of Venezuela has said no to an Orimulsion contract. A recent $750 million refit was based on the cheaper Orimulsion fuel paying for the upgrade. A significant part of the cost was to install environmental controls and according to the annual report that I picked up: SO2, NOx, and particulate rates have decreased greatly, by roughly 75% since 2005.

NB Power indicated to the assembled group that by using a mixture containing 20% petroleum coke, the savings could be in the vicinity of $60 million per year. This would tend to moderate upcoming increases in power rates. On the negative side, the “pet coke” has more carbon content and CO2 emissions would rise by 5% but would be offset by the introduction of wind power and reduced generation by oil at Coleson Cove.

Almost no one in the audience was receptive to a fuel that wasn’t clean and environmentally friendly. To tell the truth, Saint John is renowned for the large number of emitters of contaminants and CO2. Recent talk of an energy hub means that a proposed new refinery, an LNG plant and other possible projects has those who consider the environment to be of primary concern going into “sensory overload.” The number of people on the environmental side of the argument is increasing every day and the existing dynamic is changing.

When it was indicated that Coleson Cove would be reduced in output as a result of wind power, it was surprising to hear that shutting down Grand Lake plant, which has limited environmental controls and burns low quality coal, wouldn’t be the first choice. The answer is twofold, as Grand Lake supplies a cheaper production cost and the unspoken reason – retention of jobs in the Minto area.

Certainly it is a good idea to put the finances of NB Power in order and a less expensive fuel would seem to be a good way to do this. However, when reading the annual report of NB Power, I was left with some questions regarding environmental and financial items: For example, what is the present day and proposed corporate CO2 output in the coming years? Are there any reasonable possibilities for co-generation with existing plants to raise efficiency? These are issues that concern many people. 2005/06 was the first year in a while where export sales actually started to make money with higher revenue of $74 million. Better hydro production brought in an extra $54 million. This being the case, one would expect a good year but government withdrew an extra $50 million for Electric Finance Corporation. There may be a good reason for this. There are also the questions about the contracts with third party power supply agreements that cost $150 million in natural gas. The old PUB was not allowed to examine those contracts in the last hearings.

The annual report seems to skip over many important details or prevents the direct calculation of fuel costs for certain plants. The division of the company adds to the confusion with little apparent benefit. The debt jettisoned onto Electric Finance Corporation, an arm of the government allows the government to put its hand into NB Power’s pocket without a clear accounting for the results. The sooner the real debt of NB Power is returned, the sooner we can really see how the company is doing. A banker once told me that it doesn’t matter how many horses you own if you leave the barn door open. All things considered, there is a considerable lack of transparence in the financial operations of NB Power.

Our electric company could save money by using “pet coke” and this would help them financially in the future. However, unless the new government is willing to shine a bright light onto NB Power and it may plan to do so with the new Energy and Utilities Board, then it will become an accomplice to the political games of the past and the money saved may be squandered.

NB Power should be congratulated for their clear presentation of what they plan to do with “pet coke” and the improved environmental controls at Coleson Cove. However, we have come to a moment where we are jaded by “spin” that is out of control, coming at us from all directions. Wouldn’t it be unique to hear the absolute truth from an organization like NB Power? (The good and the bad) How can there be confidence instilled in the people of Saint John and the rest of the province until environmental concerns and the structural deficiencies of the organization are clearly examined?

Recently, Robert Gates sailed through confirmation hearings to become the new US Defence secretary. People were astounded that he actually voiced the truth when asked about the Iraq war. In a similar vein, the recently elected Liberal government has a window of opportunity of less than a year to clear up the problems of NB Power. Insisting that NB Power cooperate transparently in all areas with the EUB would be a good start.

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