I guess I am just a hopeless (helpless?) romantic when it comes to this stuff but I have long hoped that New Brunswick would get back to the day when it saw electricity as an economic development driver and a key public policy tool to attract and grow industry. In the list of performance indicators for NB Power leadership released yesterday there was this one of interest:
Building a strong economy is important to all New Brunswickers. Management will
take an active role, working with business, labour and governments to foster
economic opportunities in the Province.
This is definitely Francis McGuire’s influence on the board but I was hoping for much more (naively). Quebec Hydro has clear economic development mandate and actually talks about its role in supporting and growing industrial activity in the province using low power rates. Imagine if NB Power committed to that. Many (most) U.S. electricity utilities have an economic development office and many have a Vice President in charge of economic development. Imagine that in New Brunswick. In fact, many electricity utilities have performance indicators based on their ability to attract new industry to the jurisdictions. Imagine that. I think sometimes that NB Power would like to see less industry in New Brunswick, not more.
It will be very interesting to see what ‘active role’ to foster economic opportunities will be. One thing is for sure, there is lots of rhetoric to go around these days but I don’t see a whole lot being done to address the structural challenges facing the province. And then there is that annoying unemployment rate which has crept back up to almost 10%.
I would like the province to carve off a chunk of its electricity capacity production (now and in the future) and set it aside at lower rates to attract and grow industry. In many jurisdictions this is done. It’s all fine and dandy to roll all rate payers in as the same and even say that NB Power should put it to the industrial users but where do the jobs come from? We have had several major mill closures in New Brunswick and all stated high electricity costs were a key factor.
Finally, the problem with NB Power is us – residential users with electric heating. Let’s face it. NB Power’s hydro and nuclear power production (clean with almost no marginal cost of production) is enough to cover almost all of the base need of the province – residential and industry. In other words, if you take our summer need for power – both residential and industrial – it is almost completely covered by clean and cheap production. But in the winter, demand (for about five months), demand spikes up to double the summer levels and that is when NB Power is forced to purchase fuel and run its carbon emitting plants – at very high cost of production. Over 60% of NB homes are electrical heating and I heard recently that 80% of all new homes constructed are using baseboard heating. Why not? It’s easy and cheap because we have structured our power rates to blend NB Power’s cost of production at peak and baseload.
Don’t blame industry for increasing power rates. It’s demand is virtually consistent throughout the year. Without the huge peak for our heating needs, NB Power would be clean and cheap in its power production.