The Mactaquac hydroelectric refurbishment project will cost taxpayers billions. NB Power recently undertook a scoping review, according to a deputy minister.
This costly project is due to begin by 2027 to extend the use of the plant until 2068. These facilities produce about 12% of the energy used by households in the province.
The scope of the project is now being reassessed by NB Power, according to Tom Macfarlane, Deputy Minister of Natural Resources and Energy Development.
The deputy minister was at the public accounts standing committee last week to answer questions from MPs in Fredericton.
“Is the scope (of the project) the right one? Can it be tightened?”
Project cost estimates have varied over the years, but are generally above $2.5 billion.
The Deputy Minister explained that the strategic review initiated by Price Waterhouse Canada, intended to improve NB Power’s current cost structure and allow it to tackle its nearly $5 billion debt, has also prompted a reassessment of this project.
“There is a reassessment going on due to some of the changes, but one thing is certain: something needs to be done at Mactaquac. It’s not a question of ‘can we do it?’ it’s a question of ‘what range is reasonable for today’s environment’?”
The strategic review was commissioned by NB Power when its former CEO, Keith Cronkhite, was fired in July.
The reassessment of the Mactaquac generating station project has also caused a slight delay in its schedule, according to the minister. The firm should still receive the plans for the project by the end of the fall.
NB Power did not provide an interview with Acadie Nouvelle to provide details on this review.
Marc Belliveau, spokesperson for the Crown corporation, explains, however, that the project to refurbish the plant is one of a number of projects and operating activities that are under review.
“Further rulings regarding Mactaquac will be available over the coming months. The reassessment will take into account the total project costs, scope of expenditures and timing of expenditures.”
The role of the Commission is considerably restricted
The Energy and Utilities Board (EUB) is an independent body responsible for assessing rate increases from NB Power and other energy providers.
It must also pass judgment on capital projects of $50 million or more.
But late last year, the Higgs government passed a bill to free the Mactaquac project from this requirement. Only the cabinet therefore has the authority to approve project expenditures, without NB Power having to justify these expenditures to the Board.
“Our role has been reduced considerably,” said François Beaulieu, CEO of the CESP, during a committee appearance two weeks ago.
Mr. Macfarlane affirmed that the PUB will still be included in the process, and that it will be able to examine the cost of the project as well as certain other elements. But he says the government wants to see a project proposal first.
“Once we have a better understanding of the project, we will discuss with the commission what we anticipate their role will be, and what we believe their role may be.”
According to Liberal MP René Legacy, the approval process lacks rigor.
“It’s too big a sum not to have predetermined all the steps. Whether it ends up being a different amount, it doesn’t matter, it’s too big a project to be delivered in the fall without knowing what the approval process is.
He says he’s also worried about the Board’s diminished role in this case, as it normally serves as a watchdog for taxpayers.
“The deputy did not seem to have any idea yet how they would be involved. We have drafted a bill, we are told that they will be involved, and at five minutes to midnight, we do not yet know how they will be involved. Regardless of what the scope of the project will be, the decision-making process should already be (determined), ”said the MP.