|
|
 |
|
In Newfoundland and Labrador, the generation and
distribution of electricity is provided by two utilities, Newfoundland Power (NP)
and Newfoundland and Labrador Hydro (NLH). Together, NP and NLH serve about 280,000
customers. The majority of customers are served by the island interconnected system
which has almost 2000 MW of generation. In Labrador, most customers are served with
power by NLH from the 5000 MW Churchill Falls hydroelectric facility. Customers in
33 isolated communities are provided with power from diesel generators.
Newfoundland Power, an
investor owned utility, is the primary retailer of electricity on the island
portion of the Province. It distributes power to approximately 85 per cent of
the population. Newfoundland Power purchases 90 per cent of its supply from NLH
and generates the balance from its own smaller hydro generating facilities.
Newfoundland Power is a subsidiary of
FORTIS Inc., which also
owns Maritime Electric, the principal supplier of electricity on Prince Edward
Island, a 50 per cent interest in Canadian Niagara Power Company, which
distributes electricity to Fort Erie, Ontario and through interconnection,
supplies the city of Cornwall, Ontario and New York’s upstate system. Fortis
also has investment in one US generator, 2 utilities in Latin America, and
financial services, real estate and telecommunications.
Newfoundland and Labrador Hydro
is a provincial Crown corporation, with the mandate to generate and transmit
electricity in the province, and to provide distribution and retail services to
customers in Labrador and in areas of the Island not serviced by NP. It was
established by an act of the provincial legislation in 1954 and was incorporated
in 1975. NLH owns and operates approximately 80 per cent of the generating
capacity on the Island. Baseload is supplied primarily from 900 MW of
hydroelectric power. The oil-fired thermal plant at Holyrood (500 MW) is used
for intermediate purposes. Peaking load is supplied primarily from combustion
turbine units fired with distillate oil (there is no natural gas available in
the Province at present, although gas development for the Grand Banks is
anticipated within 5 - 15 years).
NLH is the parent company of a group that includes
Churchill
Falls (Labrador) Corporation (CFLCo). NLH owns 65.8% of this Corporation, and
Hydro Québec owns the remaining 34.2%.
CFLCo. owns and operates the 5428 MW Churchill Falls plant
Almost all power from this facility is sold to Hydro Québec under a long-term
fixed-price contract which expires fully in 2041. The remainder is used to
supply power to a number of interconnected communities in Labrador, and the iron
ore mines in Labrador City and Wabush.
Since 1989, Government policy has been that NLH should avail of
private sector interest in power generation when the cost would be less than
that for NLH to install additional plants. NLH is presently in the process of
engaging the private sector in a significant wind power demonstration project.
Churchill River Project
NLH is presently negotiating with
Hydro Québec on the sale of power from development of additional hydroelectric
potential on the Lower Churchill River. A total of approximately 2000 MW is contemplated.
Regulation and Pricing
The industry in Newfoundland and Labrador
is regulated by the Board of Commissioners of Public Utilities (the Public Utilities
Board or P.U.B.). The Electrical
Power Control Act 1994 (E.P.C.A.) directs the P.U.B. to enforce government policy
in relation to the electricity industry and describes the policy.
Legislation directs the P.U.B. to use cost of service
methodology to derive rates, allowing an appropriate rate of return on a rate
base of allowed costs. The P.U.B. determines the allowed rate of return
according to financial market conditions.
P.U.B. regulates both NLH and Newfoundland Power. It also
regulates Deer Lake Power which is a division of Corner Brook Pulp & Paper Limited.
DLP historically had retail customers, but now only supplies power for mill operations.
For customers on the island interconnected system there are
rates for: domestic service, general service (small, medium and large), street
and area lighting, and "industrial" (direct customers of NLH). In Labrador there
are presently different rate structures for the towns of Happy Valley-Goose Bay,
Labrador City, and Wabush.
There is a separate rate structure for isolated communities
where diesel generation is used. These customers receive a first block of power
at the same rates as island interconnected consumers. The necessary subsidy is
presently funded by all interconnected customers on the Island system except
large industrial customers.
|
|
