Senators consider new draft of Missouri nuclear bill

NB Power Pulp and Paper Subsidies lower electricity rates for six New Brunswick mills using firm power benchmarks and interruptible discounts, while government mandates, utility debt, ratepayer impacts, and competitiveness pressures shape provincial energy policy.

Key Points

Provincial mandates that buy down firm electricity rates for six mills to a national average, despite NB Power's debt.

✅ Mandated buy-down to match national firm electricity rates

✅ Ignores large non-firm interruptible power discounts

✅ Raises equity concerns amid NB Power debt and rate pressure

An effort to fix NB Power's struggling finances that is supposed to involve a look at "all options" will not include a review of the policy that requires the utility to subsidize electricity prices for six New Brunswick pulp and paper mills, according to the Department of Natural Resources and Energy Development.

The program is meant "to enable New Brunswick's pulp and paper companies have access to competitive priced electricity,"  said the department's communications officer Nick Brown in an email Monday 

"Keeping our large industries competitive with other Canadian jurisdictions, amid Nova Scotia rate hike opposition debates elsewhere, is important," he wrote, knocking down the idea the subsidy program might be scrutinized for shortcomings like other NB Power expenses.

Figures released last week show NB Power paid out $9.7 million in rate subsidies to the mills under the program in the fiscal year ended in March 2021, even though the utility was losing $4 million for the year and falling deeper into debt, amid separate concerns about old meter issues affecting households.

Subsidies went to three mills owned by J.D. Irving Ltd. including two in Saint John and one in Lake Utopia, two owned by the AV group in Nackawic and Atholville and the Twin Rivers pulp mill in Edmundston.

The New Brunswick government has made NB Power subsidize pulp and paper mills like Twin Rivers Paper Company since 2012, and is requiring the program to continue despite financial problems at the utility. (CBC)
It was NB Power's second year in a row of financial losses, while it is supposed to pay down $500 million of its $4.9 billion debt load in the next five years to prepare for the refurbishment of the Mactaquac dam, a burden comparable to customers in Newfoundland paying for Muskrat Falls elsewhere under separate policies, under a directive issued by the province

NB Power president Keith Cronkhite said he was "very disappointed" with debt increasing last year instead of  falling and senior vice president and chief financial officer Darren Murphy said everything would be under the microscope this year to turn the utility's finances around.  

"We need to do better," said Murphy on Thursday

"We need to step back and make sure we're considering all options, including approaches like Newfoundland's ratepayer shield agreement on megaproject overruns, to achieve that objective because the objective is quickly closing in on us."

However, reviewing the subsidy program for the six pulp and paper mills is apparently off limits.

The subsidy program requires NB Power to buy down the cost of "firm" electricity bought by pulp and paper mills to a national average that is calculated by the Department of Natural Resources and Energy Development.

Last year the province declared the price mills in New Brunswick pay to be an average of  7.536 cents per kilowatt hour (kwh).  It is higher than rates in five other provinces that have mills, which the province points to as justification for the subsidies, even as Nova Scotia's 14% rate hike approval highlights broader upward pressure, although the true significance of that difference is not entirely clear.

In British Columbia, the large forest products company Paper Excellence operates five pulp and paper mills which are charged 17.2 per cent less for firm electricity than the six mills in New Brunswick.

The Paper Excellence Paper Mill in Port Alberni, B.C. pays lower electricity prices than mills in New Brunswick, a benefit largely offset by higher property taxes. It's a factor New Brunswick does not count in calculating subsidies NB Power must pay. (Paper Excellence)
However, local property taxes on the five BC mills are a combined $7.8 million higher than the six New Brunswick plants, negating much of that difference.

The province's subsidy formula does not account for differences like that or for the fact New Brunswick mills buy a high percentage of their electricity at cheap non-firm prices.

Not counting the subsidies, NB Power already sells high volumes of what it calls interruptible and surplus power to industry at deep discounts on the understanding it can be cut off and redeployed elsewhere on short notice when needed.

Actual interruptions in service are rare.  Last year there were none, but NB Power sold 837 million kilowatt hours of the discounted power to industry at an average price of 4.9 cents per kwh.   

NB Power does not disclose how much of the $22 million or more in savings went to the six mills, but the price was 35 per cent below NB Power's posted rate for the plants and rivaled firm prices big mills receive anywhere in Canada, including Quebec.

Asked why the subsidy program ignores large amounts of discounted interruptible power used by New Brunswick mills in making comparisons between provinces, Brown said regulations governing the program require a comparison of firm prices only.

"The New Brunswick average rate is based on NB Power's published large industrial rate for firm energy, as required by the Electricity from Renewable Resources regulation," he wrote.

The subsidy program itself was imposed on NB Power by the province in 2012 to aid companies suffering after years of poor markets for forest products following the 2008 financial collapse and recession.  

Providing subsidies has cost NB Power $100 million so far and has continued even as markets for pulp products improved significantly and NB Power's own finances worsened.

Report warned against subsidies
NB Power has never directly criticized the program, but in a matter currently in front the of the New Brunswick Energy and Utilities Board looking at how NB Power might restructure its rates, including proposals such as seasonal rates that could prompt backlash, an independent consultant hired by the utility suggested rate subsidies to large export oriented manufacturing facilities, like pulp and paper mills, is generally a poor idea.

"We do not recommend offering subsidies to exporters," says the report by Christensen Associates Energy Consulting of Madison, Wis.

"There are two serious economic problems with subsidizing exports. The first is that the benefits may be less than the costs. The second problem is that subsidies tend to last forever, even if the circumstances that initially justified the subsidies have disappeared."

The Christensen report did not directly assess the merits of the current subsidy for pulp and paper mills but it addressed the issue because it said in the design of new rates "one NB Power business customer has raised the possibility that their electricity-intensive business ought to be granted subsidies because of the potential to generate extra benefits for the Province through increases in their exports"

That, said Christensen, rarely benefits the public.

"The direct costs of the subsidies are the subsidies themselves, a part of which ends up in the pockets of out-of-province consumers of the exported goods," said the report.  

"But there are also indirect costs due to the fact that the subsidies are financed through higher electricity prices, which means that other electricity customers have less money to spend on services provided by local businesses, thus putting a drag on the local economy."

The province does not agree.

Asked whether it has any studies or cost-benefit reviews that show the subsidy program is a net benefit to New Brunswick, the department cited none but maintained it is an important initiative, even as elsewhere governments have offered electricity bill credit relief to ratepayers.

"The program was designed to give large industrial businesses the ability to compete on a level energy field," wrote Brown.
 

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BC Affordability & BC Hydro Bill Credits provide inflation relief and cost of living support, lowering electricity bills for families and small businesses through automatic utility credits and income-tested tax rebates across British Columbia.

Key Points

BC relief lowering electricity bills and offering rebates to help families and businesses facing inflation.

✅ $100 credit for residential BC Hydro users; applied automatically.

✅ Avg $500 bill credit for small and medium commercial customers.

✅ Income-based BC Affordability Credit via CRA in January.

The new B.C. premier announced on Friday morning families and small businesses in B.C. will get a one-time cost of living credit on their BC Hydro bill this fall, and a new B.C. Affordability Credit in January.

Eby focused on the issue of affordability in his speech following being sworn in as B.C.’s 37th premier, including electricity costs addressed by BC Hydro review recommendations that aim to keep power affordable.

A BC Hydro bill credit of $100 will be provided to all eligible residential and commercial electricity customers, including those who receive their electricity service indirectly from BC Hydro through FortisBC or a municipal utility.

“People and small businesses across B.C. are feeling the squeeze of global inflation,” Eby said.

“It’s a time when people need their government to continue to be there for them. That’s why we’re focused on helping people most impacted by the rising costs we’re seeing around the world – giving people a bit of extra credit, especially at a time of year when expenses can be quick to add up.”

Eby takes over as premier of the province with a growing number of concerns piling up on his plate, even as the province advances grid development and job creation projects to support long-term growth.

Economists in the province have warned of turbulent economic times ahead due to global economic pressures and power supply challenges tied to green energy ambitions.

The one-time $100 cost of living credit works out to approximately one month of electricity for a family living in a detached home or more than two months of electricity for a family living in an apartment.

Commercial ratepayers, including small and medium businesses like restaurants and tourism operators, will receive a one-time bill credit averaging $500 as B.C. expands EV charging infrastructure to accelerate electrification.

The amount will be based on their prior year’s electricity consumption.

British Columbians will have the credit automatically applied to their electricity accounts.

BC Hydro customers will have the credit applied in early December. Customers of FortisBC and municipal utilities will likely begin to see their bill credits applied early in the new year.

‘I proudly and unreservedly turn to the tallest guy in the room’: John Horgan on David Eby

The B.C. Affordability Credit is separate and will be based on income.

Eligible people and families will automatically receive the new credit through the Canada Revenue Agency, the same way the enhanced Climate Action Tax Credit was received in October.

An eligible person making an income of up to $36,901 will receive the maximum BC Affordability Credit with the credit fully phasing out at $79,376.

An eligible family of four with a household income of $43,051 will get the maximum amount, with the credit fully phasing out by $150,051.

This additional support means a family of four can receive up to an additional $410 in early January 2023 to help offset some of the added costs people are facing, while EV owners can access more rebates for home and workplace charging to reduce transportation expenses.

“Look for B.C.’s new Affordability Credit in your bank account in January 2023,” Eby said.

“We know it won’t cover all the bills, but we hope the little bit extra helps folks out this winter.”

Eby’s swearing-in marks a change at the premier’s office but not a shift in focus.

The premier expects to continue on with former premier John Horgan’s mandate with a focus on affordability issues and clean growth supported by green energy investments from both levels of government.

In a ceremony held in the Musqueam Community Centre, Eby made a commitment to make meaningful improvements in the lives of British Columbians and continue work with First Nations communities, with clean-tech growth underscored by the B.C. battery plant announcement made with the prime minister.

The ceremony was the first-ever swearing-in hosted by a First Nation in British Columbia.

“British Columbia is a wonderful place to call home,” Eby said.

“At the same time, people are feeling uncertain about the future and worried about their families. I’m proud of the work done by John Horgan and our government to put people first. And there’s so much more to do. I’m ready to get to work with my team to deliver results that people will be able to see and feel in their lives and in their communities.”

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Toronto Hydro Storm Outages continue after strong winds and heavy rain, with crews restoring power, clearing debris and downed lines. Safety alerts and real-time updates guide affected neighborhoods via website and social media.

Key Points

Toronto Hydro Storm Outages are weather-related power cuts; crews restore service safely and share public updates.

✅ Crews prioritize areas with severe damage and limited access

✅ Report downed power lines; keep a safe distance

✅ Check website and social media for restoration updates

In the aftermath of a powerful spring storm that swept through Toronto on Tuesday, approximately 400 customers remain without power as of Sunday. The storm, which brought strong winds and heavy rain that caused severe flooding in some areas, led to significant damage across the city, including downed trees and power lines. Toronto Hydro crews have been working tirelessly to restore service, similar to efforts by Sudbury Hydro crews in Northern Ontario, focusing on areas with the most severe damage. While many customers have had their power restored, the remaining outages are concentrated in neighborhoods where access is challenging due to debris and fallen infrastructure.

Toronto Hydro has assured residents that restoration efforts are ongoing and that they are prioritizing safety and efficiency, in step with recovery from damaging storms in Ontario across the province. The utility company has urged residents to report any downed power lines and to avoid approaching them, as they may still be live and dangerous, and notes that utilities sometimes rely on mutual aid deployments to speed restoration in large-scale events. Additionally, Toronto Hydro has been providing updates through their website and social media channels, keeping the public informed about the status of power restoration in affected areas.

The storm's impact has also led to disruptions in other services, and power outages in London disrupted morning routines for thousands earlier in the week. Some public transportation routes experienced delays due to debris on tracks, and several schools in the affected areas were temporarily closed. City officials are coordinating with various agencies to address these issues and ensure that services return to normal as quickly as possible, even as Quebec contends with widespread power outages after severe windstorms.

Residents are advised to stay updated on the situation through official channels and to exercise caution when traveling in storm-affected areas. Toronto Hydro continues to work diligently to restore power to all customers and appreciates the public's patience during this challenging time, a challenge echoed when Texas utilities struggled to restore power during Hurricane Harvey.

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California Electricity Reserve Mandate requires 3.3 GW of new capacity to bolster grid reliability amid solar power volatility, peak demand, and wildfire-driven blackouts, as CPUC directs PG&E, Edison, and Sempra to procure resource adequacy.

Key Points

A CPUC order for utilities to add 3.3 GW of reserves, safeguarding grid reliability during variable renewables and peaks

✅ 3.3 GW procurement to meet resource adequacy targets

✅ Focus on grid reliability during peak evening demand

✅ Prioritizes renewables, storage; limits new fossil builds

As if California doesn’t have enough problems with its electric service, now state regulators warn the state may be short on power supplies by 2021 if utilities don’t start lining up new resources now.

In the hopes of heading off a shortfall as America goes electric, the California Public Utilities Commission has ordered the state’s electricity providers to secure 3.3 additional gigawatts of reserve supplies. That’s enough to power roughly 2.5 million homes. Half of it must be in place by 2021 and the rest by August 2023.

The move comes as California is already struggling to accommodate increasingly large amounts of solar power that regularly send electricity prices plunging below zero and force other generators offline so the region’s grid doesn’t overload. The state is also still reeling from a series of deliberate mass blackouts that utilities imposed last month to keep their power lines from sparking wildfires amid strong winds. And its largest power company, PG&E Corp., went bankrupt in January.

Now as natural gas-fired power plants retire under the state’s climate policies, officials are warning the state could run short on electricity on hot evenings, when solar production fades and commuters get home and crank up their air conditioners. “We have fewer resources that can be quickly turned on that can meet those peaks,” utilities commission member Liane Randolph said Thursday before the panel approved the order to beef up reserves.

The 3.3 gigawatts that utilities must line up is in addition to a state rule requiring them to sign contracts for 15% more electricity than they expect to need. Some critics question the need for added supplies, particularly after the state went on a plant-building boom in the 2000s.

But California’s grid managers say the risk of a shortfall is real and could be as high as 4.7 gigawatts, especially during heat waves that test the grid again. Mark Rothleder, with the California Independent System Operator, said the 15% cushion is a holdover from the days before big solar and wind farms made the grid more volatile. Now it may need to be increased, he said.

“We’re not in that world anymore,” said Rothleder, the operator’s vice president of state regulatory affairs. “The complexity of the system and the resources we have now are much different.”

The state’s three major utilities, PG&E, Edison International and Sempra Energy, will be largely responsible for securing new supplies. The commission banned fossil fuels from being used at any new power generators built to meet the requirement — though it left the door open for expansions at existing ones.

Some analysts argue California is exporting its energy policies to Western states, making electricity more costly and less reliable.

PG&E said in an emailed statement that it was pleased the commission didn’t adopt an earlier proposal to require 4 gigawatts of additional resources. Edison similarly said it was “supportive.” Sempra didn’t immediately respond with comment.

Extending Deadlines

The pending plant closures are being hastened by a 2020 deadline requiring California’s coastal generators to stop using aging seawater-cooling systems. Some gas-fired power plants have said they’ll simply close instead of installing costly new cooling systems. So the commission on Thursday also asked California water regulators to extend the deadline for five plants.

The Sierra Club, meanwhile, called on regulators to turn away from fossil fuels altogether, saying their decision Thursday “sets California back on its progress toward a clean energy future.”

The move to push back the deadline also faces opposition from neighboring towns. Redondo Beach Mayor Bill Brand, whose city is home to one of the plants in line for an extension, told the commission it wasn’t necessary, since California utilities already have plenty of electricity reserves.

“It’s just piling on to that reserve margin,” Brand said.

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Bruce Power Unit 6 refurbishment replaces major reactor components, shifting supply to hydroelectric and natural gas, sustaining Ontario jobs, extending plant life to 2064, and managing radioactive waste along Lake Huron, on-time and on-budget.

Key Points

A 4-year, $2.1B reactor overhaul within a 13-year, $13B program to extend plant life to 2064 and support Ontario jobs.

✅ Unit 6 offline 4 years; capacity shift to hydro and gas

✅ Part of 13-year, $13B program; extends life to 2064

✅ Creates jobs; manages radioactive waste at Lake Huron

The world’s largest nuclear fleet, became a little smaller Monday morning. Bruce Power has began the process to take Unit 6 offline to begin a $2.1 billion project, supported by manufacturing contracts with key suppliers, to replace all the major components of the reactor.

The reactor, which produces enough electricity to power 750,000 homes and reflects higher output after upgrades across the site, will be out of service for the next four years.

In its place, hydroelectric power and natural gas will be utilized more.

Taking Unit 6 offline is just the “official” beginning of a 13-year, $13-billion project to refurbish six of Bruce Power’s eight nuclear reactors, as Ontario advances the Pickering B refurbishment as well on its grid.

Work to extend the life of the nuclear plant started in 2016, and the company recently marked an operating record while supporting pandemic response, but the longest and hardest part of the project - the major component replacement - begins now.

“The Unit 6 project marks the next big step in a long campaign to revitalize this site,” says Mike Rencheck, Bruce Power’s president and CEO.

The overall project is expected to last until 2033, and mirrors life extensions at Pickering supporting Ontario’s zero-carbon goals, but will extend the life of the nuclear plant until 2064.

Extending the life of the Bruce Power nuclear plant will sustain 22,000 jobs in Ontario and add $4 billion a year in economic activity to the province, say Bruce Power officials.

About 2,000 skilled tradespeople will be required for each of the six reactor refurbishments - 4,200 people already work at the sprawling nuclear plant near Kincardine.

It will also mean tons of radioactive nuclear waste will be created that is currently stored in buildings on the Bruce Power site, along the shores of Lake Huron.

Bruce Power restarted two reactors back in 2012, and in later years doubled a PPE donation to support regional health partners. That project was $2-billion over-budget, and three years behind schedule.

Bruce Power officials say this refurbishment project is currently on-time and on-budget.

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California Rooftop Solar Rate Reforms propose shifting net metering to fixed access fees, peak-demand charges, and time-of-use pricing, aligning grid costs, distributed generation incentives, and retail rates for efficient, least-cost electricity and fair cost recovery.

Key Points

Policies replacing net metering with fixed fees, demand charges, and time-of-use rates to align costs and incentives.

✅ Large fixed access charge funds grid infrastructure

✅ Peak-demand pricing reflects capacity costs at system peak

✅ Time-varying rates align marginal costs and emissions

The California Public Service Commission has proposed revamping electricity rates for residential customers who produce electricity through their rooftop solar panels. In a recent New York Times op‐​ed, former Governor Arnold Schwarzenegger argued the changes pose an existential threat to residential rooftop solar. Interest groups favoring rooftop solar portray the current pricing system, often called net metering, in populist terms: “Net metering is the one opportunity for the little guy to get relief, and they want to put the kibosh on it.” And conventional news coverage suggests that because rooftop solar is an obvious good development and nefarious interests, incumbent utilities and their unionized employees, support the reform, well‐​meaning people should oppose it. A more thoughtful analysis would inquire about the characteristics and prices of a system that supplies electricity at least cost.

Currently, under net metering customers are billed for their net electricity use plus a minimum fixed charge each month. When their consumption exceeds their home production, they are billed for their net use from the electricity distribution system (the grid) at retail rates. When their production exceeds their consumption and the excess is supplied to the grid, residential consumers also are reimbursed at retail rates. During a billing period, if a consumer’s production equaled their consumption their electric bill would only be the monthly fixed charge.

Net metering would be fine if all the fixed costs of the electric distribution and transmission systems were included in the fixed monthly charge, but they are not. Between 66 and 77 percent of the expenses of California private utilities do not change when a customer increases or decreases consumption, but those expenses are recovered largely through charges per kWh of use rather than a large monthly fixed charge. Said differently, for every kWh that a PG&E solar household exported into the grid in 2019, it saved more than 26 cents, on average, while the utility’s costs only declined by about 8 cents or less including an estimate of the pollution costs of the system’s fossil fuel generators. The 18‐​cent difference pays for costs that don’t change with variation in a household’s consumptions, like much of the transmission and distribution system, energy efficiency programs, subsidies for low‐​income customers, and other fixed costs. Rooftop solar is so popular in California because its installation under a net metering system avoids the 18 cents, creating a solar cost shift onto non-solar customers. Rooftop solar is not the answer to all our environmental needs. It is simply a form of arbitrage around paying for the grid’s fixed costs.

What should electricity tariffs look like? This article in Regulation argues that efficient charges for electricity would consist of three components: a large fixed charge for the distribution and transmission lines, meter reading, vegetation trimming, etc.; a peak‐​demand charge related to your demand when the system’s peak demand occurs to pay for fixed capacity costs associated with peak use; and a charge for electricity use that reflects the time‐ and location‐​varying cost of additional electricity supply.

Actual utility tariffs do not reflect this ideal because of political concerns about the effects of large fixed monthly charges on low‐​income customers and the optics of explaining to customers that they must pay 50 or 60 dollars a month for access even if their use is zero. Instead, the current pricing system “taxes” electricity use to pay for fixed costs. And solar net metering is simply a way to avoid the tax. The proposed California rate reforms would explicitly impose a fixed monthly charge on rooftop solar systems that are also connected to the grid, a change that could bring major changes to your electric bill statewide, and would thus end the fixed‐​cost avoidance. Any distributional concerns that arise because of the effect of much larger fixed charges on lower‐​income customers could be managed through explicit tax deductions that are proportional to income.

The current rooftop solar subsidies in California also should end because they have perverse incentive effects on fossil fuel generators, even as the state exports its energy policies to neighbors. Solar output has increased so much in California that when it ends with every sunset, natural gas generated electricity has to increase very rapidly. But the natural gas generators whose output can be increased rapidly have more pollution and higher marginal costs than those natural gas plants (so called combined cycle plants) whose output is steadier. The rapid increase in California solar capacity has had the perverse effect of changing the composition of natural gas generators toward more costly and polluting units.

The reforms would not end the role of solar power. They would just shift production from high‐​cost rooftop to lower‐​cost centralized solar production, a transition cited in analyses of why electricity prices are soaring in California, whose average costs are comparable with electricity production in natural gas generators. And they would end the excessive subsidies to solar that have negatively altered the composition of natural gas generators.

Getting prices right does not generate citizen interest as much as the misguided notion that rooftop solar will save the world, and recent efforts to overturn income-based utility charges show how politicized the debate remains. But getting prices right would allow the decentralized choices of consumers and investors to achieve their goals at least cost.

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