The 2016/17 fiscal year proposed budget for NB Power includes capital expenditures of C$9.1 million for planning work related to the Mactaquac hydro facility, since the faclity will likely need major new investment in future years, said the utility in a rate hike request filed Dec. 28 at the the New Brunswick Energy and Utilities Board.
In its 2016/17 General Rate Application (GRA), NB Power is seeking board approval of rates based on a revenue requirement totaling C$1,838.9 million. This revenue requirement includes a net income of C$92.4 million.
“Currently studies indicate that Mactaquac will need to be replaced by the end of its service life of 2030,” said the rate application. “Since it was constructed in the late 1960s, the Station has provided New Brunswickers with low cost, reliable, and emission free energy. In the 1980s, it was determined that a condition known as Alkali Aggregate Reaction is causing the concrete in the structures to expand. The growth rate has been steady and sustained, with no prediction of when the reaction would slow down or exhaust itself.
NB Power said it has begun the process of evaluating options for addressing the anticipated end of the service life of the station. Three options are being considered:
- Repower by replacing the spillway and powerhouse;
- Maintain the head pond by replacing the spillway but not the powerhouse; and
- Remove the spillway, powerhouse and earthen dam.
Additionally, NB Power is exploring the feasibility of continuing to operate Mactaquac beyond 2030 within the footprint of the existing facilities. Studies are currently underway to assess the economic, environmental and social impacts of each of the three options. Funds have been allocated in 2016/17 to complete preliminary work leading to a decision on the preferred option. As this project will exceed C$50 million, NB Power will be required to obtain approval from the board.
The facility’s future is also addressed in an October 2015 10-year plan for the period 2017-2026 that the utility appended to the Dec. 28 rate application. That plan calls for capital expenditures of approximately C$5.5 billion over the next 10 years. This total is inclusive of a provision for the replacement of the Mactaquac Hydro Generating Station in the range of C$3.1 billion. The station produces about 1.6 TWh annually and can produce 672 MW at full capacity.
Based on initial estimates, all three options will require a minimum spend of approximately C$2 billion. Option one will require the largest capital investment, approximately C$1 billion to C$3 billion more than the other options, but will ensure power will be generated going forward. All three options could require an additional significant investment beyond the C$2 billion.
For planning purposes, NB Power is estimating timelines using the option that will take the longest to implement (repower) while respecting the anticipated 2030 date for end of service. With that in mind, NB Power expects to select a preferred option in 2016 to be followed soon thereafter by an application to the board for approval of that preferred option. Of the three options, repower requires the earliest start of substantial work and therefore has the earliest substantial capital expenditures.
Mactaquac is a run-of-the river facility supplying about 12% of New Brunswick homes and businesses with clean, low-cost power. The station was built on the St. John River in the mid-1960s, creating a head pond approximately 96 kilometers long. The facility began generating power in 1968.