In rare media showcase, Newfoundland Power says it's winter-ready and investing big for the future

Executives with the private utility that supplies most Newfoundland homes and businesses with electricity say the company is ready for peak winter power demands and is investing big money to support a reliable, cost-effective power grid.

"We think our approach has resulted in good outcomes for our customers when it comes to reliability and cost overall," Byron Chubbs, the vice-president in charge of energy supply at Newfoundland Power, said during a rare show-and-tell with reporters at the company's operations building in St. John's on Tuesday.

Chubbs and the three other members of the company's executive team, including president and CEO Gary Murray, showed off some new technology they say is making things more efficient for the company and its 650 employees, and saving money for customers.

This new tech includes a truck with a lift boom that's powered by a battery and can reduce emissions by 10,000 tonnes annually.

The company also plans to replace thousands of high-pressure sodium street lights with LEDs that require half the electricity and last for two decades instead of six years, and pilot a new synthetic oil in power transformers that it says is safer, cleaner and more effective than mineral oil.

A two-year plan to replace the computer software that operates the power system is also on the horizon.

Murray and his team also opened the floor to questions, with discussions about everything from the future of electricity rates to their relationship with their colleagues at Newfoundland Hydro, the government-owned utility company that supplies Newfoundland Power with more than 90 per cent of its power needs from generating stations such as Muskrat Falls, Holyrood and Bay d'Espoir.

"We work closely together and our relationship is very positive because we're all there to look out for the best interest of the customer," said Murray.

Keeping the lights on in Newfoundland

Newfoundland Power — and earlier iterations of the company — has been keeping the lights on in Newfoundland for about 140 years.

Today, it's a division of St. John's based Fortis Inc., which has international assets valued at more than $69 billion. Newfoundland Power represents roughly two per cent of the Fortis footprint, and generated revenues of $773 million in 2023, according to a report filed with the Public Utilities Board.

The company provides electricity to 276,000 customers on the island portion of the province — about 87 per cent of all power users in Newfoundland and Labrador — over an electricity grid valued at about $1.3 billion.

Like N.L. Hydro, Newfoundland Power is regulated by the Public Utilities Board, and must open its books and seek approval from the board for everything from capital investments and electricity rates to a rate of return on its investments.

Currently, the all-in price for Newfoundland Power customers is just over 15 cents per kilowatt hour, which Murray says is the lowest in Atlantic Canada and the fourth lowest in the country. But there's intense upward pressure on those rates because of inflation and the massive overruns incurred by N.L. Hydro to build Muskrat Falls.

A mitigation plan will prevent rates from soaring in the short-term, but that plan expires after 2030 and will require N.L. Hydro to come up with $2 billion to subsidize rates.

WATCH | The CBC's Terry Roberts gets some answers as questions swirl about electricity reliability and prices:

There's a lot at stake for electricity in N.L. — and reporters got unusual access to Newfoundland Power

21 days ago

Duration 3:07

Electricity rates, power grid investments and what the colder weather on the way means — all these topics were on the table for discussion as reporters got to talk to the top people at Newfoundland Power. The CBC’s Terry Roberts was there.

Newfoundland Power has applied to the regulator to increase rates by more than five per cent next summer in order to pay for a proposed $128 million capital investment in 2025. The regulator is expected to rule on that application next month.

Murray said much of the company's infrastructure is aging and is in need of replacement, and he said a proactive approach to upgrades is preferred to a scenario where assets fail, inconveniences customers, and requires more costly emergency repairs.

"We're focused on our cost every day to ensure that we're minimizing any impact on future rates," said Murray.

$800M in investments over 5 years

The company's longer-term plan is to invest $800 million over the next five years to replace distribution lines, backup generators, substations and install new system management software.

It's too early to say what that five-year plan might mean for rates, said Paige London, Newfoundland Power's chief financial officer.

As for winter readiness, Jamie Mullins, vice-president of customer operations, said testing and maintenance activities are underway to ensure that "when we're needed, we're able to respond quickly, efficiently and effectively for customers."

Challenges with the power line from Muskrat Falls to the Avalon Peninsula, meanwhile, have raised concerns about reliability this winter, but Murray said the most important variable heading into the colder months is the aging thermal generating station at Holyrood, and whether it can be a suitable backup. Both assets are owned and operated by N.L. Hydro.

"If the [Labrador-Island Link] fails and Holyrood is working, then we should be fine," said Murray. "I would say that that's the key factor for this winter."

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