Province releases review of electricity system

A review of the Newfoundland and Labrador electricity system proves that many of the best practices being used across Canada are "already being considered" in this province, Natural Resources Minister Derrick Dalley said.

The review was completed by Power Advisory LLC and released Friday.

It was launched in anticipation of the province eventually connecting to the North American power grid once the Lower Churchill Project at Muskrat Falls in Labrador is completed.

Dalley said it provides an overview of the electricity system and identifies options for operation, management and regulation as it is transformed from an isolated to interconnected system.

Major changes in the offing

The report highlights the fact that because the province operates an electricity system that is largely isolated from the rest of North America, many supply planning standards and operating practices are different than those employed by electric utilities outside the province.

Once the Lower Churchill Power Project begins producing electricity, it will present a "major change" to the electricity system, the report stated.

It will also present opportunities "to realize higher reliability at a lower cost, and create new opportunities for the export of power when it is surplus to the province's needs," the reports states.

"To fully capitalize on these opportunities it is important that the province's electricity sector be organized and operated efficiently and provide an appropriate balance between reliability and affordability."

Potential for significant opportunities

The company was awarded a contract in August 2014 to carry out a review of the system and best practices in Canada.

Power Advisory LLC president John Dalton said it "identified a wide range of best practices that could be employed, a number of which were focused on assisting the province to capitalize on the significant opportunities offered by its renewable resource potential."

Other utilities in North America have interconnections with adjacent systems, which can be relied upon to provide power during outages and extreme weather.

Such interconnections will be available to Newfoundland and Labrador once the province is connected to Nova Scotia and the greater North American grid, the report states.

"At this time about 98 per cent of the province's electricity will be from renewable energy resources whose costs are largely fixed, with costs to customers generally declining over time as the facilities' capital costs are paid for," the report states.

The report found that Hydro-Quebec's operations are the most relevant, since it also depends heavily on hydroelectric power.

"Interestingly, these provinces have among the lowest electricity rates in Canada," the reports states.