Saint John wind farm undercuts N.B. Power electricity prices by more than half

Electricity generated at the Burchill wind farm in Saint John and sold to Saint John Energy in 2023 undercut prices being charged to the municipal utility by N.B. Power by more than half, new figures suggest.

It's a discount so deep it has N.B. Power concerned about others making a similar choice to bypass its system, and pricing, in a similar way.

"There is an electricity system that needs to be paid paid for," Brad Coady, the N.B. Power vice-president, said last month during an Energy and Utilities Board hearing into the utility's proposed new rates. 

"To the extent that customers have the wherewithal to escape N.B. Power being their supplier of choice, that causes cost-shifting onto other customers. That's the concern."  

Saint John Energy will not directly say what it paid last year for electricity coming from the wind farm, claiming the amount to be confidential.

WATCH | How much did SJE save by buying from a wind farm?:

How Saint John saved millions on electricity in 2023

7 months ago

Duration 1:13

Saint John Energy has escaped complete dependence on N.B. Power by purchasing some of its electricity from a wind farm instead. The company's president says the financial benefits have been significant.

"The power purchase agreement with Burchill Wind is commercially and competitively sensitive so we will be unable to confirm the price," company spokesperson Jessica DeLong wrote in an email 

However, the utility has disclosed enough information in bits and pieces over the last several weeks to suggest the price in 2023 was $41 per megawatt hour.  

Burchill, which is jointly owned by the Neqotkuk Maliseet Nation at Tobique and the Nova Scotia-based wind energy company Natural Forces, officially opened in June 2023.

According to DeLong, it sold 76,900 megawatt hours of electricity to Saint John Energy by the end of December 2023.

In annual financial statements issued last month Saint John Energy reported that it paid the Burchill Wind partnership $3.15 million during 2023 for its output. Combining those two pieces of information appears to put the price of electricity from Burchill at $41 per megawatt hour.

That's less than half the $106 per megawatt hour that N.B. Power charged Saint John Energy for supplying the bulk of electricity used in the city during 2023.

The savings from the wind facility were steep enough, even from a half-year of production, to allow Saint John Energy to post record net income of $5.1 million in 2023.  

It also allowed the utility to implement a rate increase of 9.27 per cent for residential customers in Saint John in April,  despite N.B. Power raising what it charges Saint John Energy and its own residential customers 9.8 per cent.

Those financial benefits come despite Saint John Energy having to spend millions of dollars on new transmission and distribution infrastructure to handle the new Burchill wind supply after N.B. Power declined to allow the electricity onto its own wires, even for a fee.

At Saint John Energy's annual general meeting in June, company president Ryan Mitchell said the financial benefits of escaping complete dependence on N.B. Power and its prices have been significant.

"The long-term agreement we have in place to buy all of the electricity from the wind farm at a fixed price helps ensure price stability," Mitchell said.

Coady said Saint John Energy's wind project has been the largest loss of volume to an outside energy supplier experienced so far, but he noted the trend toward self-reliance has been growing "exponentially" among N.B. Power customers as rates climb.

"It's not sustainable," he said about the possibility of significant numbers of large and small customers generating electricity on their own.

"Who would be left to pay for the system that we enjoy?"

N.B. Power president Lori Clark echoed that point and hinted that more thought has to be put into how to treat customers who, like Saint John Energy, have found a way to access N.B. Power services while avoiding some of its charges.

"When they want to use N.B. Power as a backup, when the wind isn't blowing or the sun isn't shining, then there's a cost for us to continue to maintain that infrastructure in the event that a customer wants to use it,"  Clark said.

"When a customer leaves then it leaves those costs for the infrastructure to be recovered by other customers on the system."