"This document clearly outlines our plan to achieve the goals of paying down a $1 Billion worth of debt by 2021 while improving our performance and transitioning the company for the greater adoption of renewable energy in New Brunswick" said GaÃ«tan Thomas, President and CEO, NB Power.
"It provides New Brunswickers with the key components of our planning, our load forecast, the impacts of our Reduce and Shift Demand strategy, and most importantly for our customers Â– our forecast for low and stable rates over the next decade."
The plan clearly articulates the three key strategies that NB Power has been pursuing through the 2011 Strategic Plan:
- Achieve consistent performance within the top 25 percent "top quartile" of utilities in North America
- Reduce debt by $1 billion and achieve an 80/20 debt to equity ratio by 2021
- Reduce and shift in-province demand for electricity that will defer the need for new investments in generation while optimizing the electrical system
"Since 2010, we have reduced costs by $50 million and are pursuing a further $25 million in sustainable cost reductions", said Thomas. "These saving will be achieved through a culture of continuous improvement that is taking root throughout the organization."
The 10-year plan is built upon NB Power's Integrated Resource Plan IRP filed with the Energy and Utilities Board EUB in July 2014. The IRP is a long-term plan for the electricity needs of the province that considers economics, the environment, long-term societal interests and various sensitivities of each of these features. The development of the IRP required in-depth analysis in three key areas:
- Energy efficiency and demand considerations as well as supply considerations
- Reliability and security of supply
- Policy and regulatory considerations including encouraging the development of locally owned small-scale renewable projects to help meet the 40 percent Renewable Portfolio Standard RPS requirement.
The plan also makes assumptions around the Mactaquac Hydro Generating Station as preliminary spending may be required within this 10-year period. The dam's current capacity and energy will no longer be available to NB Power after 2030 and thus for planning purposes, NB Power is estimating timelines using the option that will take the longest to implement repowering the dam.
Pending the selection of a preferred option, the estimated capital cost of repowering the Station is being used as a proxy in this 10-year capital plan. This option requires the earliest work and therefore has the earliest substantial capital expenditures, that is, which would fall into this 10-year planning horizon. While these costs will be factored in only if this option is chosen, excluding the potential for this expense in this capital plan could risk a major understatement of future capital expenditures.