The New Brunswick Energy & Utilities Board heard a wide range of closing arguments for and against the proposed gas/diesel generating plant near Centre Village Thursday during a hearing in Saint John that lasted about six-and-a-half hours.
“This matter, at its heart, is about energy security for the province of New Brunswick,” NB Power lawyer John Furey told the EUB.
He was referring to the utility’s “tolling agreement” with the U.S. firm PROENERGY to supply, own and operate eight combustion turbines that would generate up to 400 MW of electricity.
Furey said evidence showed that the utility needs the 400 MW starting in 2028 to meeting rising demand and to avoid electricity shortages that could lead to rolling blackouts.
“The evidence supports the conclusion that combustion turbines are the preferred option, and indeed, in this case, the least-cost option,” Furey added.
While he acknowledged that the 25-year contract with PROENERGY might cost more than NB Power owning and operating the gas plant itself, he argued the American company would bring its expertise to the project and assume many of its risks.
Furey rejected arguments the EUB heard last week that battery energy storage systems (BESS) backed up by wind and solar could be cheaper and more efficient.
He maintained that it would cost more to install enough batteries to supply the electricity NB Power needs partly because batteries would not be as efficient as combustion turbines.
EUB Chair Christopher Stewart asked Furey what weight the board should give to environmental concerns as it considers the financial prudence of investing in a big gas plant.
“It emits greenhouse gases, batteries do not,” Stewart said. “And what weight should the Board put on that?”
“I’m pretty sure that the evidence establishes that actually the RIGS facility will lead to a decline in emissions,” Furey replied, adding that it would reduce the need for the fossil-fuel burning plants at Coleson Cove and Belledune.
The NB Power lawyer suggested that the EUB is an economic regulator that must also weigh the reliability of the electricity system.
“When you’re getting into the environmental considerations, I’m not saying they’re irrelevant from a societal perspective, but they are just that — they are a societal perspective, not, I would submit, a regulatory perspective,” Furey said.
To read NB Power’s closing brief, click here.
Financial concerns
St. Thomas University Economics Professor Andrew Secord highlighted financial concerns in his closing arguments.
“The consequences of this hearing are significant for NB Power’s customers, with the evidence suggesting that the revenue requirements over the 25-year period may be as high as $3.5 billion,” he said.
Secord added that NB Power will be required to pay guaranteed monthly payments to the PROENERGY subsidiary RIGS Atlantic to cover capital and operating costs in addition to a specified rate of return on the company’s investment.
“The question remains as to whether the tolling agreement as currently negotiated, sufficiently reduces the financial exposure of NB Power and its customers,” he said.
Secord suggested that he could not judge that for himself because almost all of the financial details in the documents have been redacted (blacked out) to protect NB Power’s commercial interests.
He added that, as an economic regulator, financial risks have to be a “primary concern” of the EUB.
To read Secord’s closing arguments, click here.
Unnecessary project?
In his closing arguments, Public Intervener Alain Chiasson pointed to evidence from an expert witness he had hired.
Florida-based consultant Jeffrey Palermo testified last week that his review of the RIGS project showed that NB Power’s forecasts were wrong and the utility would not need electricity from the gas/diesel plant, known as the RIGS project, until at least 2030.
“If the board approves what turns out to be an unnecessary project,” Chiasson warned, “then NB Power’s customer will bear several billions of dollars in cost of that project for the next 25 years, eroding NB Power’s financial integrity, increasing customer rates, and potentially rendering costs to NB Power’s customers unaffordable in the long term.”
The public intervener, hired by the province to represent the public interest, took issue with an NB Power planning document showing looming electricity shortages.
“It is eight pages in length, including the cover pages, and is intended to support a commitment of several billions of dollars over 25 years,” Chiasson said. “It was done two years ago and much has changed since then.”
He urged the EUB to withhold approval for the gas plant giving NB Power more time to investigate alternatives such as battery energy storage.
“The lights will not go out if the RIGS project is denied. A denial allows the board more time to direct NB Power to provide a fully vetted proposal, including all possible alternatives,” he said.
No ‘social licence’
Economist Gregor MacAskill also pointed to the eight-page document that NB Power is using to justify the gas plant project in his closing arguments on behalf of the Protect the Chignecto Isthmus Coalition.
“PCIC submits that if this level of evidence is sufficient for NB Power to proceed with a 25-year, $3.5 billion project, it is no wonder that NB Power finds itself in financial difficulty and appears unable to avoid large capital project challenges,” MacAskill said.
“Tantramar, as a community, only became aware of RIGS just before this process began, and we responded in very short order as best we could while holding full-time jobs and other commitments.”
MacAskill suggested that PCIC arguments against the gas plant could have been even more forceful if the Coalition had the time, staff and expertise available to others at the EUB hearings.
In its detailed, 48-page brief, PCIC recommends that the EUB provide help to interveners without legal representation to guide them through its complicated procedures.
“Centre Village is only a convenient site for RIGS, not for local residents who were never consulted before NB Power signed the contract with PROENERGY,” MacAskill said as he read from the PCIC brief.
“PCIC submits that this project does not have social licence, something NB Power representatives have said is important for the relationship it wants to have with communities across the province,” he continued.
“The dual site criteria involving the intersection of power and gas lines for RIGS is not a requirement for batteries, thus opening up a much greater range of suitable sites in the province for NB Power to deploy battery technology,” he said.
“Proper framing of environmental benefits would have comparisons of alternatives to meet the system needs, and batteries would have clear advantages as they do not emit GHGs, other air, water, or land pollutants, and do not require large volumes of water to operate.”
The brief adds that even if NB Power receives environmental approvals for its project, it will still face risks because of “issues with the site regarding air, water, and land resources.”
To read the PCIC brief, click here.
‘Rushed decision’
In her closing arguments, Konstantina Northrup of the Conservation Council of New Brunswick (CCNB) said electricity projects that rely on traditional sources of energy can’t be the standard in the province for very much longer.
“Not in the face of the climate emergency, which is acknowledged throughout New Brunswick Power’s evidence, including in the 2023 Integrated Resource Plan, and not in the face of the industry transformation that is happening globally and domestically to meet the challenges and the needs of our time,” she said.
Northrup pointed to testimony from CCNB expert witness Toby Couture that global prices are falling rapidly for battery energy storage systems and she added that the prices for combustion turbines are trending upwards.
She argued that NB Power failed to consider lower-cost options in its rush to procure the 400 MW RIGS project which would produce an effective load carrying capacity of 360 MW.
She compared that to grid-scale batteries coupled with demand-response programs to reduce consumption.
“If we take 200 MW of battery storage and we add to that roughly 70 or 75 MW of demand response potential,” she said, “that gets us close to 300. It’s not all the way there, but it’s at least an option that is worth considering and exploring.”
Northrup said NB Power’s selection of the RIGS project was flawed because it was “a rushed decision-making process” and the utility fell back on “familiar choices and technologies.”
She noted that NB Power is now planning for an additional 600 MW of generating capacity.
“CCNB respectfully requests that if the Board determines this project is prudent, that the board set some clear directions, clear guidance to NB Power, that would help ensure that a rushed decision does not occur again,” she said.
“NB Power cannot continue through a sense of urgency to fall back on what is known and familiar when the realities of our time require transformation in the electricity system.”
Note: EUB Chair Christopher Stewart says the Board will make a decision on whether to approve the 400 MW gas plant project “as promptly and effectively as we can.” Meantime, the EUB has scheduled additional hearings in late March and early April on NB Power’s proposal to expand the 400 MW plant to generate an additional 100 MW for sale to Nova Scotia.





























