You expect the lights to turn on when you flip the switch. New Brunswick’s public power utility bypassed standard procedures for a new natural gas plant to ensure that keeps happening.

Executives for NB Power defended their decisions to lawmakers after the province’s auditor general revealed the corporation exposed taxpayers to millions of dollars in financial risk.

Lori Clark is the CEO and president of NB Power. She told the public accounts committee she prefers explaining these decisions now rather than explaining why New Brunswickers have no power.

The Push for Grid Security

The Renewable Integration and Grid Security project is a 500 megawatt natural gas power plant. NB Power proposed the facility for rural southeastern New Brunswick. They expect it to be operational by 2028. Nova Scotia’s Independent Energy System Operator also signed a deal to use one fifth of the generated power.

The Crown corporation pitched the project as an urgent response to prevent future energy shortages. Retiring coal and oil facilities cause these shortages. The future plant also provides a backstop when bad weather impacts renewable energy sources.

Auditor General Raises Alarms

Auditor general Paul Martin criticized the utility. He said NB Power entered into a long term agreement before receiving regulatory approval. They also selected equipment without studying alternatives. Martin noted the corporation increased governance and financial risks for customers.

Clark admitted the plant required adaptations to the standard contract process. She said those decisions reflected urgency rather than a lack of oversight. Following regular procedures delays the project by five years. Clark said NB Power lacked that time due to a looming electricity shortage.

The auditor general highlighted a specific risk. NB Power entered a 25 year partnership with United States firm ProEnergy to build and run the plant before the Utilities and Energy Board approved it. A project denial from the provincial regulator forces the utility to pay ProEnergy 55.1 million dollars in early construction costs.

Defending the Partnership

Clark said the partnership was the only viable option. NB Power lacked the expertise to build the plant and lacked the ability to acquire the necessary dual combustion turbines without ProEnergy.

She dismissed concerns about the early contract signing. Clark told the committee the contract includes conditions and penalties if ProEnergy fails to deliver. This transfers the risk to the builder instead of New Brunswick customers.

The proposed power plant sits about 20 kilometres north of Sackville. The provincial energy board approved it in May. The project still requires final approval from the Liberal government following an environmental assessment.

Frequently Asked Questions

Why did NB Power bypass standard procedures?

NB Power bypassed standard procedures to avoid a five year delay in building a new natural gas plant. The utility stated this urgency prevents rolling blackouts in New Brunswick.

Where is the new power plant located?

The 500 megawatt natural gas power plant sits in rural southeastern New Brunswick about 20 kilometres north of Sackville.

What are the auditor general’s concerns?

The auditor general warned that NB Power signed a 25 year contract with an American firm before securing regulatory approval. This decision exposed taxpayers to over 55 million dollars in early construction costs if regulators denied the project.

When does the new gas plant open?

NB Power expects the new facility to open by 2028.