Thursday, June 07, 2012


     07 JUNE 2012

A multibillion-dollar refurbishment of Mactaquac dam is part of NB Power’s new 30-year strategic plan.

But utility president and CEO Gaetan Thomas said the final decision on the future of the dam won’t be made until the end of this decade.

“We have included in the plan that it would be refurbished, but it doesn’t mean that the decision would be to refurbish it,” he told The Daily Gleaner’s editorial board Tuesday.

“It will be dependent on other options.”

Thomas said there are two decision points for the dam.

“One for the EIA (environmental impact assessment) that will be done around 2017, where there will be some engineering dollars and some environmental research and the engagement of anybody along the river,” he said.

The process will take three to four years, said Thomas.

“Then, by 2021, there will be a decision to be made,” he said.

NB Power board chairman Ed Barrett said the utility wants as many options as possible when it comes Mactaquac dam.

“The timeline is that round 2019, 2020, maybe 2021, the refurbishment activity would have to begin,” he told the editorial board.

“Which means the engineering, pre-planning, all of that sort of thing would commence about three years before that.”

The Mactaquac dam represents about one-sixth of NB power’s total generating capacity of about 4,000 megawatts, and electricity generated by hydro is the cheapest source of power.

But the dam suffers from a concrete-expansion problem called alkali-aggregate reaction, which is limiting the operational life of the concrete portions of the 45-year-old dam.

If the decision is made to refurbish the dam, it would be up and running again around 2028, said Barrett.

“One of the things we will be looking at, obviously, is cost,” he said.

If NB Power goes ahead with fixing the 672-megawatt dam, it will be the utility’s biggest spending project since the Point Lepreau nuclear generation station refurbishment and have major ramifications on NB Power’s debt.

“Mactaquac, which will require spending as early as 2021, would cost close to $2 billion to decommission and significantly more to refurbish,” said the strategic plan, released this week.

“If the practice of financing the company through debt continues, renewals would see total utility debt increase substantially.”

NB Power has a debt of about $5 billion and the strategic plan calls for that to be slashed to $4 billion over the next 10 years.

“Those numbers are very preliminary,” said Barrett about the Mactaquac costs.

He said the strategic plan is based on how the utility sees the landscape today and is subject to change as new information is accumulated each year.

The information includes the world price of various fuels and other sources of hydroelectricity available from Quebec and Labrador, he said.

“If the best decision is to lay it up, then we lay it up,” said Barrett.

“So let’s say you preserve the headpond and the best decision is you do something that allows you to make the decision 10 years later, then you do that.”

The future of the Mactaquac dam is another reason why NB Power must cut its debt by $1 billion over the next 10 years, said the board chairman.

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