EUB challenges NB Power to reveal analysis of political burden

NB Power's effort to keep the results of a computer model it ran to identify the politically imposed costs it operates under away from the public is being challenged by the Energy and Utilities Board.

In a letter to the utility Wednesday EUB lawyer Ellen Desmond said the board does not accept NB Power's claim that the results of the modelling meets the standard of confidential information.

• NB Power's $64M 'political' costs detailed in rate hearings report

"It is in the public interest that as much information as possible be placed on the public record for review. There is no need to limit the disclosure," Desmond wrote in her letter. 

There is no need to limit the disclosure.- Ellen Desmond, EUB lawyer

"Board staff request that NB Power provide a full unredacted response."

NB Power is preparing for a rate hearing next month and as part of that process was asked to run simulations to show how much money it would save if it were not obliged to meet a variety of requirements imposed on it, mostly by the New Brunswick government.

Those requirements include providing subsidies to industry, entering long-term contracts with local private power suppliers, committing to expensive wind power over cheaper alternatives and other measures that force the utility to buy electricity at above market rates.  

Initially, NB Power ran the simulation and reported that it could provide electricity to customers for $64.1 million less than it does if it was free from government-imposed objectives. However, it then ran a second simulation using different assumptions and has been withholding those results from public release. 

The utility said the second simulation revealed production cost information that is commercially sensitive and could harm NB Power as it negotiates electricity prices with suppliers and customers.

But Desmond said NB Power has already revealed that same information in the answer to other questions and so requested the public release of the results of the second simulation.

"Board staff is not convinced that any additional commercially sensitive information would be made public," she wrote.

Intervener issued challenge

The entire issue arose when the EUB and its chairman, Raymond Gorman, were challenged by NB Power critic and self-represented intervener Greg Hickey during last year's rate hearing to dig into the issue.

"My observation, Mr. Chairman, is that decisions in this province get made in the halls of power based on political influence, and I don't think sufficient in-depth engineering technical analysis gets done on the making of the sausage," Hickey told the EUB in his final comments last June. 

Hickey then asked that NB Power be allowed to pretend it wasn't stuck with a number of costly long-term contracts imposed on it over the years so it could compare prices it pays to what it could generate on its own or buy in the open market.

He called it a "real economic dispatch."

"Take the cuffs off and let the professionals at NB Power who know what to do, do their job," said Hickey. "And let's find out what the political burden is on this utility."

EUB asked for cost analysis

Hickey is not participating in this year's rate hearing, but the EUB picked up on his request and had NB Power do as he asked as part of preparing its evidence for this year's hearing, which begins May 9.

"Please complete a 'real economic dispatch' for 2016-2017, as described by Mr. Hickey during summation for Matter 272," requested the board as part of a series of written questions to NB Power.

Matter 272 is the file number for last year's rate hearing.

NB Power came back with a report showing it could save an estimated $64.1 million next year if, among other issues, it weren't forced to:

• Accept power from provincial wind farms when cheaper alternatives are available.
• Buy renewable power from large industry and sell it back to them at nearly half the price.
• Take all of the electricity from two natural gas generators at the Irving Oil refinery, no matter what the price.

The EUB wasn't completely satisfied with that answer. It asked for additional calculations that assumed NB Power wasn't tied into one other long-term contract.

Although NB Power supplied that second estimate it has been trying to keep it confidential.

In an email Hickey told CBC News he is aware of the EUB's attempt to have the information released but will not comment until the issue is fully resolved.