Saint John Energy wind farm accused of freeloading at N.B. Power's expense

N.B. Power claims Saint John Energy's new Burchill wind farm has been freeloading backup service from the provincial electrical grid and it wants to begin billing the municipal utility an estimated $334,114 per year for those costs. 

It's the latest flashpoint in a long-simmering dispute between the two utilities over the Burchill Wind Project.

In evidence submitted to the New Brunswick Energy and Utilities Board as part of its upcoming rate hearing, N.B. Power has asked permission to begin charging a "balancing" fee for having to deal with constantly fluctuating production levels from 10 wind turbines at the Burchill site on the western edge of the city.

"The Burchill wind facility is … creating currently unrecovered balancing costs on the system," N.B. Power has written in evidence submitted to the board in support of charging Saint John Energy.

"If one of N.B. Power's in-province customers procures wind power from another supplier, then in the absence of the wind balancing charges that customer would be imposing a disproportionate cost ... on all other customers."

N.B. Power manages and balances the electrical output from 13 wind operations in New Brunswick, Prince Edward Island and northern Maine and says Burchill is the only one not paying for the cost of balancing its output.

Burchill can generate anywhere between zero and one million kilowatt hours of electricity per day for Saint John Energy, depending on wind conditions. This forces N.B. Power to increase and decrease its own supply to Saint John Energy by the hour to offset those fluctuations.

N.B. Power proposes to charge $2.27 for every 1,000 kilowatt hours of electricity the wind farm produces to pay for gaps in service it has to monitor for and deal with.  

N.B. Power estimates that will result in a charge of more than $330,000 per year, an amount  equal to about 10 per cent of Saint John Energy's 2022 net income, the latest year for which figures are available.

Saint John Energy is not saying how much the charge, if approved, will affect the economics of the wind farm and savings it has been counting on from having it built.

"In keeping with our past practice and out of respect for the EUB and the ongoing hearing, we will not comment," Saint John Energy spokesperson Jessica DeLong wrote in an email.

"We expect to make submissions to the EUB as part of the hearing process."

The requested charge is just the latest point of contention between New Brunswick's two largest electrical utilities over the Saint John wind farm.   

N.B. Power was cool to the idea of a wind project in Saint John from the beginning, citing difficulties managing the up and down output from the numbers of wind turbines it was already dealing with.

In a significant blow to the project's business case, N.B. Power rejected requests from Saint John Energy to use nearby transmission lines to economically transport wind power from the development into the city.

Saint John Energy proceeded with construction anyway, and 10 turbines were erected at the edge of the Bay of Fundy within a few hundred metres of N.B. Power's existing Coleson Cove generating station.   

They began producing power in the middle of last year.

To make the project work, however, Saint John Energy was forced to construct 20 kilometres of new power lines from the wind farm to an uptown substation on its own, including draping lines over the Reversing Falls.  

That added several million dollars to the cost of the project over what paying a toll to use N.B. Power's existing lines into Saint John was expected to be.

Raw feelings from that experience appeared to flare up again at an Energy and Utilities Board hearing in 2022 as N.B.   Power applied for new tolls for the use of its transmission lines, including increased charges for managing wind energy.  

N.B. Power lawyer John Furey accused Saint John Energy of dirty tricks at the hearing by financing two experts, one openly and one secretly, to testify against the proposals.

"I am shocked by it, frankly," Furey told the board when the second expert who had registered as an independent participant acknowledged he had Saint John Energy as a client.

"We now have collusion … to create the impression for the Board that there is consensus," Furey said. "It is absolutely unfair."

The board agreed.  

Saint John Energy apologized for that incident, but another fight over Burchill is all but certain at this year's hearing, which is scheduled for mid-May.

Saint John Energy will not comment on how aggressively it intends to fight the Burchill fee but has been gathering all the information it needs to push back. 

The lawyer representing New Brunswick Municipal Utilities at the hearing, including Saint John Energy, submitted 37 sets of questions to N.B. Power about its upcoming rate-hearing evidence. 

The first 29 sets of questions seek more details about N.B. Power's wind energy policies and charges.