Bill will force N.B. Power to buy pricier electricity from small modular reactors

The Higgs government will force N.B. Power to buy electricity from the first pair of small modular nuclear reactors even if that costs the utility more than other sources of electricity.

Legislation introduced this week would not only exempt the first two SMRs from an existing law that forces the corporation to buy the cheapest source possible.

It goes further, requiring the utility to choose nuclear-generated electricity once the reactors are up and running.

Energy Minister Mike Holland said the first units built by ARC Clean Energy and Moltex Energy Canada will be more expensive to produce than subsequent units.

As a result, the cost of the electricity they generate would likely be too expensive, given N.B. Power's legal requirement to buy power at the lowest possible cost. 

"Therefore the utility would be precluded from buying it," Holland said. 

"This legislation allows them to purchase that, even though it doesn't fit within that requirement of the least-cost option."

In fact, the amendment goes further than "allowing" the utility to buy power from the first two SMRs. It says N.B. Power "shall ensure" that some of its electricity comes from the units. 

Electricity purchases from any subsequent ARC or Moltex reactors would be subject to the usual lowest-cost requirement, Holland said.

Green Leader David Coon says forcing N.B. Power to buy more expensive electricity is another reason to question the wisdom of SMRs.

"I think it's a recognition from government that they're uneconomic, that the power will be unaffordable," he said.

Coon called it bizarre for the government to order the utility to buy electricity from a specific kind of technology and pointed out the legislation will give the provincial cabinet the power to set the maximum price N.B. Power can pay.

The Green leader said it remains to be seen what effect the law will have on the Energy and Utilities Board's role in approving the rates N.B. Power charges to customers.

ARC Clean Energy said earlier this year that its first 100-megawatt SMR will be ready to operate at Point Lepreau, west of Saint John, by 2030.

Moltex Energy Canada's proposed SMR, also to be located at Lepreau, would generate 300 megawatts, but is not expected to be up and running by that date.