Hydro still seeking best fuel fit for Holyrood

Newfoundland and Labrador Hydro acknowledges that major breakdowns at its Holyrood generating station last year were caused by the poor grade of oil it was burning.

But the utility says while the fuel came from its new Dutch supplier, Trafigura, they admit it's not entirely that company's fault.

The details of last year's plant failures are included in a report ordered by the Public Utilities Board, which wanted to know what Hydro has done to correct and prevent a repeat of the fiasco which caused millions of dollars in damage.

In short, Hydro says it is planning to hire an expert to determine the best type of oil to burn at Holyrood. They're also taking a closer look at how the product is tested once it's delivered by tanker.

The problems began after the first delivery of fuel in January and February of 2013.

Breakdowns began

Things quickly went downhill from there, with malfunctions affecting the main oil tank suction heaters, day tank, suction strainers, fuel oil pumps, heat exchangers, recirculation and control valves, and the boiler burner nozzles.

Hydro concluded the breakdowns, as well as two oil spills at the plant, were caused by high levels of silicon and aluminum in the fuel delivered by Trafigura.

But the utility acknowledged that's not entirely that company's fault since the contract did not specify limits for the offending chemicals.

Hydro said they did meet with Trafigura officials on the issue in July 2013, and the company agreed to deliver a cleaner product.

Trafigura agreed to reduce the levels of aluminum and silicon, but did not commit to a specific limit. In the absence of a specified limit, a formal agreement was not established- Excerpt from Hydro report to PUB

However, "Trafigura noted that high aluminum and silicon levels were common in the power generation industry where limits were generally high. Trafigura agreed to reduce the levels of aluminum and silicon, but did not commit to a specific limit. In the absence of a specified limit, a formal agreement was not established," Hydro states in its report to the PUB.

Hydro said they have been unable to find an industry standard for acceptable levels of those two ingredients, which is why they still haven't set a "hard limit."

The utility also noted the specifications for Holyrood fuel and testing methods remain pretty much the same since 1992, when the last major review was conducted.

Hydro said fuel received at Holyrood since last summer has met the contract criteria, adding that aluminum and silicon levels are lower than in 2013.

"Fuel that does not meet the quality required can be refused before arrival," the report states.

Not in writing

Still, Hydro said there is no formal agreement, only a verbal commitment on acceptable levels. The report does not say what those levels are.

Hydro stated it does have a plan, which involves hiring a consultant "to ensure (they're) using the best fuel oil for Holyrood."

The expert's report is due by Dec. 31.

Hydro insists the fuel quality problems did not cause the island-wide blackouts, known as DarkNL, in January of this year.

Danny Dumaresque, an intervenor at PUB hearings into the blackouts, and a former director on Hydro's board, first brought the fuel quality issue to light in mid-March.

He claims Hydro officials knew about the bad fuel and continued to use it for several months before confronting Trafigura about it.