Major Industry Plans to Exit N.B. Power Grid
Large industrial companies in New Brunswick are advocating for a significant shift away from the N.B. Power grid. This movement aims for companies to produce their own renewable energy. J.D. Irving Ltd. has publicly voiced this request during a committee meeting with MLAs last September. Their proposal has received support from the province’s Liberal natural resources minister, John Herron.
Concerns Over High Power Rates
Herron has identified escalating power costs as a threat to forestry jobs. He argues that allowing companies to generate their own electricity could enhance their competitiveness. “It just makes sense for a company to defend itself and deploy its own capital,” Herron stated.
N.B. Power has expressed concerns regarding the potential impact on remaining customers. Elizabeth Fraser, a spokesperson for N.B. Power, indicated that the removal of major electricity consumers from the grid could lead to higher rates for others. She stated, “If large industrial facilities were able to generate their own electricity, it could put upward pressure on rates for remaining customers.”
Proposed Measures for Impact Mitigation
- A potential exit fee might be needed to lessen the financial burden on other ratepayers.
- Green Leader David Coon has cautioned that the exit fee must be adequately substantial to be effective.
Coon expressed concerns that N.B. Power might attempt to minimize the exit fee, thereby increasing costs for other ratepayers. “The temptation would be to have the other ratepayers bear some of that cost,” he said.
Agreements and Future Plans
In a significant agreement, N.B. Power and J.D. Irving have finalized a deal to purchase 200 megawatts of power annually from the Brighton Mountain wind farm. This facility marks J.D. Irving’s initial foray into wind energy production, with N.B. Power serving as the sole buyer of this power.
Mark Mosher, vice-president of Irving Pulp and Paper, highlighted that the company’s foray into wind energy is primarily financially motivated. “Our ultimate goal is to reduce our internal electricity costs,” he noted, suggesting that a small amendment to the Electricity Act would allow them to bypass N.B. Power altogether.
Legislative Constraints and Future Concerns
Current legislation permits industrial players to generate their own electricity, but limitations exist on the locations where this can occur. Mosher pointed out that any generation outside the site of consumption is illegal, complicating the situation.
Looking ahead, Herron noted a potential electricity generation shortfall anticipated by 2028. This concern has driven N.B. Power to propose a controversial 400-megawatt natural gas plant in Tantramar.
Government Position and Future of Energy Generation
Herron voiced his support for reforms from a natural resources perspective, emphasizing the importance of the forestry sector to the provincial economy. While Premier Susan Holt is aware of the discussions, Herron refrained from commenting on the government’s official stance.
Energy Minister René Legacy acknowledged the challenges faced by large industrial companies regarding energy costs but confirmed that no decisions have been finalized. He stated, “Government is aware of JDI’s interests, but no decision has yet been made.”
Embracing Decentralized Energy
Coon supports decentralized energy generation, provided it is equitable for all parties involved. He believes this represents the future of energy. However, Herron emphasized that the urgency for everyday residents to exit the grid is minimal due to their comparatively lower power rates.
In a previous comment, Mosher linked the issue of soaring electricity costs to the closure of a production line at Irving’s Saint John mill, resulting in 140 job losses. Coon, on the other hand, contends that the forestry sector benefits from existing provincial legislation that allows on-site electricity generation and sale, effectively lowering expenses for the industry.
