NB Power lawyer John Furey

New Brunswick’s Energy & Utilities Board heard final arguments today on whether it should approve a proposed 100-MW expansion of NB Power’s controversial Chignecto Isthmus gas-fired generating project.

The expansion would increase the proposed RIGS (Renewable Integration and Grid Security) project near Centre Village from 400 megawatts to 500 megawatts. Under the proposal, the additional 100 MW of capacity would be sold to Nova Scotia’s Independent Energy System Operator for 10 years.

During closing arguments Wednesday, NB Power lawyer John Furey urged regulators to approve the expansion, arguing that it meets the regulatory test of prudence and would generate financial benefits for New Brunswick ratepayers.

“A decision is prudent if it’s in the range of decisions reasonable persons might have made,” Furey told the board, citing established regulatory standards.

He said evidence before the board showed the expansion would produce positive cash flow during the first 10 years of the agreement while allowing the province to secure additional generating capacity that could be needed later as older plants retire.

He also argued that fast-responding combustion turbines would play an important role in stabilizing a grid that increasingly relies on intermittent renewable energy including wind and solar.

“If you are going to move toward intermittent resources, you need fast-acting generating capacity,” Furey said.

Alternatives not considered

Public intervener Alain Chiasson

New Brunswick’s Public Intervener urged the EUB to reject the proposed 100-megawatt expansion, arguing that NB Power had failed to demonstrate the project’s long-term prudence.

Alain Chiasson, who said his job is to protect the public interest, acknowledged that the utility had shown some short-term financial benefit, noting evidence that selling the additional capacity to Nova Scotia could produce positive cash flow during the first decade of the agreement.

But he warned that those benefits apply only to the first 10 years of  NB Power’s 25-year contract with the U.S. firm PROENERGY, leaving significant uncertainty after that.

“The only certainty is that there is a risk that in 2038 the additional 100 megawatts of combustion turbines will be cold steel in the ground,” Chiasson told the EUB.

He also said the utility failed to fully evaluate alternative ways to meet future demand, including refurbishing existing generation, expanding renewable energy, or deploying battery storage technologies that are expected to become significantly cheaper over time.

No business case

St. Thomas University Economics Professor Andrew Secord argued that NB Power failed to justify the expansion in economic terms.

“NB Power did not provide a credible economic evaluation of the project and did not analyze alternatives to the project,” Secord said in his closing argument.

He told regulators that the utility had not demonstrated that revenues from selling power to Nova Scotia would adequately cover the financial obligations created by the project’s leasing structure.

“Simply put, NB Power officials have not made an adequate case before this economic regulator, and their application should be denied,” Secord said.

Environmental groups made similar arguments.

CCNB lawyer Konstantina Northrup

Lawyer Konstantina Northrup, representing the Conservation Council of New Brunswick, told the board the 100-MW expansion cannot be separated from the larger 400-MW project that forms the foundation of the RIGS proposal.

“The expansion opportunity cannot stand alone,” she said, arguing that the board must evaluate the full 500-MW project when deciding whether the proposal is prudent.

Northrup said the expansion would simply magnify what her organization views as serious flaws in the underlying project.

“It is not prudent for NB Power to exacerbate the problems that we see in the 400-megawatt proposal by making the project even bigger and more complex,” she told the EUB regulators.

NB residents bear impact

The Protect the Chignecto Isthmus Coalition also urged the board to reject the expansion.

PCIC economist Gregor MacAskill

Coalition spokesman Gregor MacAskill argued regulators are being asked to approve a major infrastructure project without seeing the final version of key commercial agreements.

“The board is being asked to render a prudence determination on an incomplete record while key commercial, legal and financial risks remain undefined,” MacAskill said.

He warned that approving the project without finalized contracts could leave critical details to future negotiations outside regulatory oversight.

MacAskill also spoke briefly about the project’s environmental effects.

“First and foremost it is local residents in New Brunswick that directly bear the impacts of air, land and water emissions from the 100-megawatt addition that is serving the needs of Nova Scotia for at least 10 years,” he said.

EUB Chair Christopher Stewart said the board would make its decision on both parts of the RIGS project “as quickly as possible.”

For coverage of the closing arguments in the previous EUB hearing on the proposed 400-MW project, click here.