Natural Resources Minister Siobhan Coady says thoughts of selling Newfoundland and Labrador Hydro assets and responsibilities to Fortis are not being explored within the provincial government — right now, at least.
In its interim report on rate mitigation options submitted on Feb. 15, the Board of Commissioners of Public Utilities (PUB) noted that selling Newfoundland and Labrador Hydro assets to Newfoundland Power, owned by Fortis, could be one way to improve efficiency in the province’s electricity system and help mitigate electricity rate increases once the Muskrat Falls project is complete.
“Liberty suggested examination of the transfer of operational responsibilities, or ownership of some or all of Hydro’s retail operations to Newfoundland Power, recognizing the latter’s location and expertise in providing retail service,” read a section of the report.
“This may involve some form of divesture or some form of service contracting. Liberty explained that given the nature and location of Newfoundland Power’s operations with respect to those of Hydro, transferring some or all of Hydro’s distribution assets should be considered.”
During question period in the House of Assembly on Thursday, Opposition Leader Ches Crosbie asked whether there is any truth to rumours that the sale of Newfoundland and Labrador Hydro assets is progressing beyond the pages of the February report to the PUB.
Coady says all options for rate mitigation will be explored. but talk of selling Newfoundland and Labrador Hydro assets to Newfoundland Power is just an idea, for now.
“There are no additional conversations. In reviewing how we address rate management and rate mitigation for the province, the PUB has commissioned a lot of studies, including Liberty,” said Coady.
“Liberty came forward and said one of the things we should at least consider is whether or not you would sell distribution lines to another entity. That would likely be Newfoundland Power.”
Coady says the sale of Newfoundland and Labrador Hydro assets is not in the province’s rate management plan so far, which she suggests can tell you where the government stands for the moment.
“Everything should be reviewed. I’m not suggesting that it shouldn’t, and Liberty made that suggestion,” she said.
“I can tell you without a doubt that it’s not in our rate management plan today.”
Fortis CEO Barry Perry has recently stated his company’s interest in taking over some assets and responsibilities from Newfoundland and Labrador Hydro.
A submission by Newfoundland Power to the PUB suggests the company could add more than 100 jobs (117.5 full-time equivalents), a 20 per cent increase to its workforce, and then manage the transmission, distribution and customer service assets of Newfoundland and Labrador Hydro on the island. In order to ultimately save on rates, Newfoundland and Labrador Hydro would then need to make even deeper cuts on its side.
“I can tell you without a doubt that it’s not in our rate management plan today.” — Siobhan Coady
The Liberals have said the PUB’s report, including consideration of the significant change to Newfoundland and Labrador Hydro, will inform its final rate mitigation plan.
Coady says Newfoundland Power already owns and operates about 70 per cent of such assets in the province.
Crosbie says he doesn’t mind what happens with the Newfoundland and Labrador Hydro assets, so long as jobs are not affected if any transition takes place.
A final report on rate mitigation options for the government to consider is due on Jan. 31, 2020.
— With files from Ashley Fitzpatrick