N.L., Ottawa agree to shield ratepayers from Muskrat Falls cost overruns


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Muskrat Falls Financing Restructuring redirects megadam benefits to ratepayers, stabilizes electricity rates, and overhauls federal provincial loan guarantees for the hydro project, addressing cost overruns flagged by the Public Utilities Board in Newfoundland and Labrador.

 

Key Points

A revised funding model shifting benefits to ratepayers to curb rate hikes linked to Muskrat Falls cost overruns.

✅ Shields ratepayers from megadam cost overruns

✅ Revises federal provincial loan guarantees

✅ Targets stable electricity rates by 2021 and beyond

 

Ottawa and Newfoundland and Labrador say they will rewrite the financial structure of the Muskrat Falls hydro project to shield ratepayers from paying for the megadam's cost overruns.

Federal Natural Resources Minister Seamus O'Regan and Premier Dwight Ball announced Monday that their two governments would scrap the financial structure agreed upon in past federal-provincial loan agreements, moving to a model that redirects benefits, such as a lump sum credit, to ratepayers.

Both politicians called the announcement, which was light on dollar figures, a major milestone in easing residents' fears that electricity rates will spike sharply, as seen with Nova Scotia's debated 14% hike, when the over-budget dam comes fully online next year.
"We are in a far better place today thanks to this comprehensive plan," Ball said.

Ball has said the issue of electricity rates is a top priority for his government, and he has pledged to keep rates near existing levels, but rate mitigation talks with Ottawa have dragged on since April.

A report by the province's Public Utilities Board released Friday forecast an "unprecedented" 75 per cent increase in average domestic rates for island residents in 2021, while Nova Scotia's regulator approved a 14% hike, and reported concerns from industrial customers about their ability to remain competitive.

Costs of the Muskrat Falls megadam on Labrador's Lower Churchill River have ballooned to more than $12.7 billion since the project was approved in 2012, according to the latest estimate of Crown corporation Nalcor Energy.

The dam is set to produce more power than the province can sell. Its existing financial structure would have left electricity ratepayers paying for Muskrat Falls to make up the difference starting in 2021, an issue both governments said Monday has been resolved with the relaunch of financing talks.

"Essentially, you won't pay this on your monthly light bills," Ball said.

But details of how the project will meet financing requirements in coming decades to make up the gap in funds are still to be worked out.

Both Ball and O'Regan criticized previous governments for sanctioning the poorly planned development and again pledged their commitment to easing the burden on residents.

"We promised we would be there to help, and we will be," O'Regan said before announcing a "relaunch" of negotiations around the project's financial structure.

He did not say how much the new setup might cost the federal government, despite earlier federal funding commitments, stressing that the new focus will be on the project's long-term sustainability. "There's no single piece of policy ... that can resolve such a large and complicated mess," O'Regan said.

The two governments also said they will work towards electrifying federal buildings to reduce an anticipated power surplus in the province.

In the short term, the federal government said it would allow for "flexibility" in upcoming cash requirements related to debt servicing, allowing deferral of payments if necessary.

Ball said that flexibility was built in to ensure the plan would still be applicable if costs continue to rise before Muskrat Falls is commissioned.

Political opponents criticized Monday's plan as lacking detail.

"What I heard talked about was an agreement that in the future, there's going to be an agreement," said Progressive Conservative Leader Ches Crosbie. "This was an occasion to reassure people that there's a plan in place to make life here affordable, and I didn't see that happen today."

Others addressed the lingering questions about the project's final cost.

Nalcor's latest financial update has remained unchanged since 2017, though the Muskrat Falls project has seen additional delays related to staffing and software issues.

Dennis Browne, the province's consumer advocate, said the switch to a cost of service model is a significant move that will benefit ratepayers, but he said it's impossible to truly restructure the project while it's a work in progress. "We need to know what the figures are, and we don't have them," he said.

 

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New Mexico Governor to Sign 100% Clean Electricity Bill ‘As Quickly As Possible’

New Mexico Energy Transition Act advances zero-carbon electricity, mandating public utilities deliver carbon-free electricity by 2045, with renewable targets of 50 percent by 2030 and 80 percent by 2040 to accelerate grid decarbonization.

 

Key Points

A state law requiring utilities to deliver carbon-free electricity by 2045, with 2030 and 2040 renewable targets.

✅ 100 percent carbon-free power from utilities by 2045

✅ Interim renewable targets: 50 percent by 2030, 80 percent by 2040

✅ Aligns with clean energy commitments in HI, CA, and DC

 

The New Mexico House of Representatives passed the Energy Transition Act Tuesday afternoon, sending the carbon-free electricity bill, a move aligned with proposals for a Clean Electricity Standard at the federal level, to Gov. Michelle Lujan Grisham.

Her opinions on it are known: she campaigned on raising the share of renewable energy, a priority echoed in many state renewable ambitions nationwide, and endorsed the ETA in a recent column.

"The governor will sign the bill as quickly as possible — we're hoping it is enrolled and engrossed and sent to her desk by Friday," spokesperson Tripp Stelnicki said in an email Tuesday afternoon.

Once signed, the legislation will commit the state to achieving zero-carbon electricity from public utilities by 2045. The bill also imposes interim renewable energy targets of 50 percent by 2030 and 80 percent by 2040, similar to Minnesota's 2040 carbon-free bill in its timeline.

The Senate passed the bill last week, 32-9. The House passed it 43-22.

The legislation would enter New Mexico into the company of Hawaii, California, where climate risks to grid reliability are shaping policy, and Washington, D.C., which have committed to eliminating carbon emissions from their grids. A dozen other states have proposed similar goals. Meanwhile, the Green New Deal resolution has prompted Congress to discuss the bigger task of decarbonizing the nation overall.

Though grid decarbonization has surged in the news cycle in recent months, even as some states consider moves in the opposite direction, such as a Wyoming bill restricting clean energy that would limit utility choices, New Mexico's bill arose from a years-long effort to rally stakeholders within the state's close-knit political community.

 

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Canada and Manitoba invest in new turbines

Manitoba Clean Electricity Investment will upgrade hydroelectric turbines, expand a 230 kV transmission network, and deliver reliable, affordable low-carbon power, reducing greenhouse gas emissions and strengthening grid reliability across Portage la Prairie and Winnipeg River.

 

Key Points

Joint federal-provincial funding to upgrade hydro turbines and build a 230 kV grid, boosting reliable, low-carbon power.

✅ $314M for new turbines at Pointe du Bois (+52 MW capacity)

✅ $161.6M for 230 kV transmission in Portage la Prairie

✅ Cuts Brandon Generating Station emissions by ~37%

 

The governments of Canada and Manitoba have announced a joint investment of $475.6 million to strengthen Manitoba’s clean electricity grid that can support neighboring provinces with clean power and ensure continued supply of affordable and reliable low-carbon energy.

This federal-provincial investment provides $314 million for eight new hydroelectric turbines at the 75 MW Pointe du Bois Generating Station on the Winnipeg River, as well as $161.6 million to build a new 230 kV transmission network in the Portage la Prairie area, bolstering power sales to SaskPower and regional reliability.

The $314 million joint investment in the Pointe du Bois Renewable Energy Project includes $114.1 million from the Government of Canada and nearly $200 million from the Government of Manitoba. The joint investment will enable Manitoba Hydro to replace eight generating units that are at the end of their lifecycle, amid looming new generation needs for the province. The new, more efficient units will increase the capacity of the Pointe du Bois generating station by 52 MW.

The $161.6 million joint investment in the Portage Area Capacity Enhancement project includes $70.9 million from the Government of Canada and $90.6 million from the Government of Manitoba. The joint investment will support the construction of a new transmission line to enhance reliability for customers across southwest Manitoba and help Manitoba Hydro meet increasing demand, with projections that demand could double over the next two decades. By decreasing Manitoba’s reliance on its last grid-connected fossil-fuel generating station, this investment will reduce greenhouse gas emissions at the Brandon Generating Station by about 37%.

The federal government’s total contribution of $184.9 million is provided through the Green Infrastructure Stream of the Investing in Canada Plan, alongside efforts to improve interprovincial grid integration such as NB Power agreements with Hydro-Quebec that strengthen regional reliability. This federal funding is conditional on meeting Indigenous consultation requirements, as well as environmental assessment obligations. Including today’s announcement, the Green Infrastructure Stream has supported 38 infrastructure projects in Manitoba, for a total federal contribution of more than $766.8 million and a total provincial contribution of over $658.4 million.

“A key part of our economic plan is making Canada a clean electricity superpower. Today’s announcement in Manitoba will deliver clean, reliable, and affordable electricity to people and businesses across the province—and we will continue working to expand our clean electricity grid and create great careers for people from coast to coast to coast,” said Deputy Prime Minister and Finance Minister Chrystia Freeland.

The federal government will continue to invest in making Canada a clean electricity superpower, supporting provincial initiatives like Hydro-Quebec's fossil-free strategy that complement these investments to ensure Canadians from coast to coast to coast have the affordable and reliable clean electricity they need today and for generations to come.

“Manitoba Hydro is extremely pleased to be receiving this federal funding through the Green Infrastructure Stream of the Investing in Canada Infrastructure Program. The investments we are making in both these critical infrastructure projects will help provide Manitobans with energy for life and power our province’s economic growth with clean, reliable, renewable hydroelectricity. These projects build on our legacy of investments in renewable energy over the past 100 years, as we work towards a lower carbon future for all Manitobans,” said Jay Grewal, president and chief executive officer of Manitoba Hydro.

About 97% of Manitoba’s electricity is generated from clean hydro, with most of the remaining 3% coming from wind generation. Manitoba’s abundant clean electricity has resulted in Manitobans paying 9.455 ¢/kWh — the second-lowest electricity rate in Canada, though limits on serving new energy-intensive customers have been flagged recently.

 

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U.S. residential electricity bills increased 5% in 2022, after adjusting for inflation

U.S. Residential Electricity Bills rose on stronger demand, inflation, and fuel costs, with higher retail prices, kWh consumption, and extreme weather driving 2022 spikes; forecasts point to stable summer usage and slight price increases.

 

Key Points

They are average household power costs shaped by prices, kWh use, weather, and upstream fuel costs.

✅ 2022 bills up 13% nominal, 5% real vs. 2021

✅ Retail price rose 11%; consumption up 2% to 907 kWh

✅ Fuel costs to plants up 34%, pressuring rates

 

In nominal terms, the average monthly electricity bill for residential customers in the United States increased 13% from 2021 to 2022, rising from $121 a month to $137 a month. After adjusting for inflation—which reached 8% in 2022, a 40-year high—electricity bills increased 5%. Last year had the largest annual increase in average residential electricity spending since we began calculating it in 1984. The increase was driven by a combination of more extreme temperatures, which increased U.S. consumption of electricity for both heating and cooling, and higher fuel costs for power plants, which drove up retail electricity prices nationwide.

Residential electricity customers’ monthly electricity bills are based on the amount of electricity consumed and the retail electricity price. Average U.S. monthly electricity consumption per residential customer increased from 886 kilowatthours (kWh) in 2021 to 907 kWh in 2022, even as U.S. electricity sales have declined over the past seven years. Both a colder winter and a hotter summer contributed to the 2% increase in average monthly electricity consumption per residential customer in 2022 because customers used more space heating during the winter and more air conditioning during the summer, with some states, such as Pennsylvania, facing sharp winter rate increases.

Although we don’t directly collect retail electricity prices, we do collect revenues from electricity providers that allow us to determine prices by dividing by consumption, and industry reports show major utilities spending more on electricity delivery than on power production. In 2022, the average U.S. residential retail electricity price was 15.12 cents/kWh, an 11% increase from 13.66 cents/kWh in 2021. After adjusting for inflation, U.S. residential electricity prices went up by 2.5%.

Higher fuel costs for power plants drove the increase in residential retail electricity prices. The cost of fossil fuels—including natural gas prices, coal, and petroleum—delivered to U.S. power plants increased 34%, from $3.82 per million British thermal units (MMBtu) in 2021 to $5.13/MMBtu in 2022. The higher fuel costs were passed along to residential customers and contributed to higher retail electricity prices, and Germany power prices nearly doubled over a year in a related trend.

In the first three months of 2023, the average U.S. residential monthly electricity bill was $133, or 5% higher than for the same time last year, according to data from our Electric Power Monthly. The increase was driven by a 13% increase in the average U.S. residential retail electricity price, which was partly offset by a 7% decrease in average monthly electricity consumption per residential customer, and industry outlooks also see U.S. power demand sliding 1% on milder weather. This summer, we expect that typical household electricity bills will be similar to last year’s, with customers paying about 2% more on average. The slight increase in electricity costs forecast for this summer stems from higher retail electricity prices but similar consumption levels as last summer.
 

 

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As peak wildfire season nears, SDG&E completes work on microgrid in Ramona

SDG&E Ramona Microgrid delivers renewable energy and battery storage for wildfire mitigation, grid resilience, and PSPS support, powering the Cal Fire Air Attack Base with a 500 kW, 2,000 kWh lithium-ion system during outages.

 

Key Points

A renewable, battery-backed microgrid powering Ramona's Air Attack Base, boosting wildfire response and PSPS resilience.

✅ 500 kW, 2,000 kWh lithium-ion storage replaces diesel

✅ Keeps Cal Fire and USFS aircraft operations powered

✅ Supports PSPS continuity and rural water reliability

 

It figures to be another dry year — with the potential to spark wildfires in the region. But San Diego Gas & Electric just completed a renewable energy upgrade to a microgrid in Ramona that will help firefighters and reduce the effects of power shutoffs to backcountry residents.

The microgrid will provide backup power to the Ramona Air Attack Base, helping keep the lights on during outages, home to Cal Fire and the U.S. Forest Service's fleet of aircrafts that can quickly douse fires before they get out of hand.

"It gives us peace of mind to have backup power for a critical facility like the Ramona Air Attack Base, especially given the fact that fire season in California has become year-round," Cal Fire/San Diego County Fire Chief Tony Mecham said in a statement.

The air attack base serves as a hub for fixed-wing aircraft assigned to put out fires. Cal Fire staffs the base throughout the year with one two airtankers and one tactical aircraft. The base also houses the Forest Service's Bell 205 A++ helicopter and crew to protect the Cleveland National Forest. Aircraft for both CalFire and the Forest Service can also be mobilized to help fight fires throughout the state.

This summer, the Ramona microgrid won't have to rely on diesel generation. Instead, the facility next to the town's airport will be powered by a 500 kilowatt and 2,000 kilowatt-hour lithium-ion battery storage system that won't generate any greenhouse gas emissions.

"What's great about it, besides that it's a renewable resource, is that it's a permanent installation," said Jonathan Woldemariam, SDG&E's director of wildfire mitigation and vegetation management. "In other words, we don't have to roll a portable generator out there. It's something that can be leveraged right there because it's already installed and ready to go."

Microgrids have taken on a larger profile across the state because they can operate independently of the larger electric grid, where repairing California's grid is an ongoing challenge, thus allowing small areas or communities to keep the power flowing for hours at a time during emergencies.

That can be crucial in wildfire-prone areas affected by Public Safety Power Shutoffs, or PSPS, the practice in which investor-owned utilities in California de-energize electrical power lines in a defined area when conditions are dry and windy in order to reduce the risk of a power line falling and igniting a wildfire, while power grid upgrades move forward statewide.

Rural and backcountry communities are particularly hard hit when the power is pre-emptively cut off because many homes rely on water from wells powered by electricity for their homes, horses and livestock.

In addition to Ramona, SDG&E has established microgrids in three other areas in High Fire Threat Districts:

The microgrids in Butterfield Ranch and Shelter Valley run on diesel power but the utility plans to complete solar and battery storage systems for each locale by the end of next year, as other regions develop new microgrid rules to guide deployment.

SDG&E has a fifth microgrid in operation — in Borrego Springs, which in 2013 became the first utility-scale microgrid in the country. It provides grid resiliency to the roughly 2,700 residents of the desert town and serves as a model for integrated microgrid projects elsewhere in delivering local electricity. While the Borrego Springs microgrid is not located in a High Fire Threat District, "when and if any power is turned off, especially the power transmission feed that goes to Borrego, we can support the customers using the microgrid out there," Woldemariam said.

Microgrid costs can be higher than conventional energy systems, even as projected energy storage revenue grows over the next decade, and the costs of the SDG&E projects are passed on to ratepayers. As per California Public Utilities Commission rules, the financial details for each of microgrid are kept confidential for at least three years.

SDG&E's microgrids are part of the utility's larger plan to reduce wildfire risk that SDG&E files with the utilities commission. In its wildfire plan for 2020 through 2022, SDG&E expected to spend $1.89 billion on mitigation measures.

 

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Berlin urged to remove barriers to PV

Germany Solar Cap Removal would accelerate photovoltaics, storage, and renewables, replacing coal and nuclear during phaseout with 10GW per year toward 162GW by 2030, boosting grid resilience, O&M jobs, and domestic clean energy growth.

 

Key Points

A policy change to scrap the 52GW limit, enabling 10GW/year PV and storage to replace coal and nuclear capacity.

✅ Scrap 52GW cap to prevent post-2020 market slump

✅ Add 10GW PV annually; scale residential, commercial, grid storage

✅ Create jobs in planning, installation, and O&M through 2030

 

The German Solar Association (BSW) has called on the government to remove barriers to the development of new solar power capacity in Germany and storage capacity needed to replace coal and nuclear generation that is being phased out.

A 52GW cap should be scrapped, otherwise there is a risk that a market slump will occur in the solar industry after 2020, BSW said, especially as U.S. solar expansion plans signal accelerating global demand.

BSW managing director Carsten Körnig said: “Time is running out, and further delays are irresponsible. The 52GW mark will already be reached within a few months.”
A new report from BSW, in cooperation with Bonn-based marketing and social research company EuPD Research and The smarter E Europe initiative, said 10GW a year is needed as well as an increase in battery storage capacity.

This would lead to cumulative photovoltaic capacity of 162GW and 15GW residential, commercial and grid storage systems by 2030, in line with global renewable records being set, leading to new job opportunities.

The number of jobs in the domestic photovoltaic and storage industries could increase to 78,000 by the end of the next decade from today’s level of 26,400, aligning with forecasts of wind and solar reaching 50% by mid-century, said 'The Energy Transition in the Context of the Nuclear and Coal Phaseout – Perspectives in the Electricity Market to 2040' study.

Job growth would take place for the most part in the fields of planning, installation and operations and maintenance of PV systems, as solar uptake in Poland increases, the report said.

In maintenance alone, employment would increase from 9,200 to 26,000, with additional opened up by tapping into the market potential of medium- to long-term storage systems, alongside changing electricity prices in Northern Europe that favor flexibility, it said.

The report added that industry revenue could grow from €5bn to €12.5bn in the coming decade.

The report was supported by BayWa Re E3/DC, Fronius, Goldbeck Solar, IBC Solar, Panasonic, Sharp, Siemens, Sonnen, Suntech, Tesvolt and Varta.

 

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Rio Tinto Completes Largest Off-Grid Solar Plant in Canada's Northwest Territories

Rio Tinto Off-Grid Solar Power Plant showcases renewable energy at the Diavik Diamond Mine in Canada's Northwest Territories, cutting diesel use, lowering carbon emissions, and boosting remote mining resilience with advanced photovoltaic technology.

 

Key Points

A remote solar PV plant at Diavik mine supplying clean power while cutting diesel use, carbon emissions, and costs.

✅ Largest off-grid solar in Northwest Territories

✅ Replaces diesel generators during peak solar hours

✅ Enhances sustainability and lowers operating costs

 

In a significant step towards sustainable mining practices, Rio Tinto has completed the largest off-grid solar power plant in Canada’s Northwest Territories. This groundbreaking achievement not only highlights the company's commitment to renewable energy, as Canada nears 5 GW of solar capacity nationwide, but also sets a new standard for the mining industry in remote and off-grid locations.

Located in the remote Diavik Diamond Mine, approximately 220 kilometers south of the Arctic Circle, Rio Tinto's off-grid solar power plant represents a technological feat in harnessing renewable energy in challenging environments. The plant is designed to reduce reliance on diesel fuel, traditionally used to power the mine's operations, and mitigate carbon emissions associated with mining activities.

The decision to build the solar power plant aligns with Rio Tinto's broader sustainability goals and commitment to reducing its environmental footprint. By integrating renewable energy sources like solar power, a strategy that renewable developers say leads to better, more resilient projects, the company aims to enhance energy efficiency, lower operational costs, and contribute to global efforts to combat climate change.

The Diavik Diamond Mine, jointly owned by Rio Tinto and Dominion Diamond Mines, operates in a remote region where access to traditional energy infrastructure is limited, and where, despite lagging solar demand in Canada, off-grid solutions are increasingly vital for reliability. Historically, diesel generators have been the primary source of power for the mine's operations, posing logistical challenges and environmental impacts due to fuel transportation and combustion.

Rio Tinto's investment in the off-grid solar power plant addresses these challenges by leveraging abundant sunlight in the Northwest Territories to generate clean electricity directly at the mine site. The solar array, equipped with advanced photovoltaic technology, which mirrors deployments such as Arvato's first solar plant in other sectors, is capable of producing a significant portion of the mine's electricity needs during peak solar hours, reducing reliance on diesel generators and lowering overall carbon emissions.

Moreover, the completion of the largest off-grid solar power plant in Canada's Northwest Territories underscores the feasibility and scalability of renewable energy solutions, from rooftop arrays like Edmonton's largest rooftop solar to off-grid systems in remote and resource-intensive industries like mining. The success of this project serves as a model for other mining companies seeking to enhance sustainability practices and operational resilience in challenging geographical locations.

Beyond environmental benefits, Rio Tinto's initiative is expected to have positive economic and social impacts on the local community. By reducing diesel consumption, the company mitigates air pollution and noise levels associated with mining operations, improving environmental quality and contributing to the well-being of nearby residents and wildlife.

Looking ahead, Rio Tinto's investment in renewable energy at the Diavik Diamond Mine sets a precedent for responsible resource development and sustainable mining practices in Canada, where solar growth in Alberta is accelerating, and globally. As the mining industry continues to evolve, integrating renewable energy solutions like off-grid solar power plants will play a crucial role in achieving long-term environmental sustainability and operational efficiency.

In conclusion, Rio Tinto's completion of the largest off-grid solar power plant in Canada's Northwest Territories marks a significant milestone in the mining industry's transition towards renewable energy. By harnessing solar power to reduce reliance on diesel generators, the company not only improves operational efficiency and environmental stewardship but also adds to momentum from corporate power purchase agreements like RBC's Alberta solar deal, setting a positive example for sustainable development in remote regions. As global demand for responsible mining practices grows, initiatives like Rio Tinto's off-grid solar project demonstrate the potential of renewable energy to drive positive change in resource-intensive industries.

 

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