N.L. Hydro reviewing power needs before Muskrat Falls

Newfoundland and Labrador Hydro is taking another look at whether it has enough power generation to meet the province's energy needs between now and when Muskrat Falls comes online in 2017.

The question has been posed by Hydro's own CEO Ed Martin in the wake of island-wide blackouts in early January.

The startup of Vale's nickel processing plant in Long Harbour this year, combined with the housing boom around the St. John's metro region are also behind Martin's desire for a second look.

"We had planned to add some generation in the late 2015 timeframe, to meet this growing need," he said. "That's a piece of work I've asked our folks to revisit."

Martin said it will focus on exactly how much power Hydro will need to bridge the gap to Muskrat Falls.

"I've just asked the question: do we need something earlier? Is there enough to get us through? We do want the public to know we're looking at that hard again and we'll have that answer in time to do something with it."

Martin admits the Long Harbour facility will tax the grid.

"When the plant starts up, the peak load will be higher. There's no question about that," Martin told CBC. "That's part of our planning, and primarily what is driving some of that new generation we're looking at."

That said, Martin is confident there's enough backup power available to handle the expected increase in demand.

"The plant is built into our projections, and we will be able to meet that load prior to 2015."

Newfoundland's power system is being reviewed by the Public Utilities Board in light of the outages in early January, when a winter storm, accompanied by high winds and bitter cold, swept across the island.

Rolling blackouts were necessary as crews worked to bring customers back on gradually.

Martin said Hydro's power generating facilities, including the oil-burning plant in Holyrood, are running fine now, with enough "buffer" power to spare should one of the three units there go down.

But he said that might not be the case had the province not invested in improvements to the power system in 2005-06, when he took the reigns at Nalcor.

Martin noted that flies in the face of critics who say Nalcor is spending too much on Muskrat Falls while neglecting current infrastructure.

"We have to keep the system viable until Muskrat Falls comes on stream in 2017," he said, noting capital expenditures on current assets have increased by about 170 per cent since 2006.

"Let's face it, the Muskrat Falls decision ... part of that was replacement of the Holyrood type of infrastructure. So we looked after the long run. That wasn't an easy process, and rightly so. People have questions, but we stuck with it. We have a longer term solution."

Martin also defended Hydro's need to call Newfoundland Power from time to time, requesting backup generation from that utility's smaller hydro plants.

"When we have extra load forecasts, we include that backup in our planning. Why go out and spend too early and too much when we have the opportunity to call upon Newfoundland Power and use some of their generating assets.

"It's a smart move for the province, it's a smart move for cost and such, and the (power demand) has grown. And obviously NL Power is compensated for that, so it's a good thing for them as well. And from our perspective it's smart planning. Any types of opportunities we have to use additional generation that we need, at a lower cost, and certainly a cleaner fuel, we think is smart business."

Martin wouldn't rule out the possibility of a repeat of early January, but said Hydro "is creating the highest probability so that it won't happen again."