Still risk of major outages even after Muskrat Falls, says report on N.L. power supply

In its second phase of review, the Liberty Consulting Group says the risk for power outages in Newfoundland and Labrador will continue even after the Muskrat Falls project is complete and in service.

Liberty report says developing of current staff, and recruitment of new staff, needed at Hydro

The Muskrat Falls project, when it eventually comes online, won't solve Newfoundland and Labrador Hydro's problems, according to the Liberty Consulting Group. (Andrew Vaughan/The Canadian Press)

More power supply — even after Muskrat Falls is complete — and a major overhaul of Newfoundland and Labrador Hydro is needed to secure customer power reliability, according to a report released Friday.

These two major concerns are not necessarily being currently considered by Hydro, the Liberty Consulting Group, commissioned by the Public Utilities Board (PUB), said in its report.

The report is a second phase of its initial review released in 2014, which determined the 2014 outages — widely referred to as DarkNL — were caused by insufficient generating resources and failure of key transmission equipment.

Muskrat Falls won't solve Hydro's problems

Liberty said the problems experienced by Hydro "were as much or more due to organizational issues as they were due to system inadequacies."

The new investment will not eliminate those organizational issues, or the outages that flow from them.- Liberty report

"The new investment will not eliminate those organizational issues, or the outages that flow from them," the report stated.

"It is therefore urgent that Newfoundland's investment be protected and optimized with improvements to Hydro's operating, planning and other technical capabilities."

Liberty stated in its report that the challenges facing the Muskrat Falls project are so great, a major transformation of the Crown corporation is required to overcome them.

The group suggests developing the skills of current staff as well as recruiting outside workers with the necessary skills.

Power needed pre Muskrat Falls

Liberty doesn't believe the Holyrood generating units — even if they are returned to full capacity — can be relied upon until the controversial hydroelectic Muskrat Falls project is in service.

Nalcor Energy, which operates Newfoundland and Labrador Hydro, is a Crown corporation. (CBC)

Original estimates expected Muskrat Falls to deliver first power in 2017/18, but that date is now expected to be the winter of 2020/21.

"While it had long been contemplated that Muskrat Falls would preclude the need for more supply until the 2030s, this is not likely the case," the report stated.

"Liberty expects that new supply will be needed before Muskrat Falls is in service, to mitigate near-term supply issues, and after Muskrat Falls is in service, to mitigate the impact of extended outages of the Labrador-Island link."

Additional power needed post Muskrat Falls

In a reliability analysis completed by Hydro for the Labrador-Island link, it's possible a full outage — lasting 29 hours, on average — could happen every three years, according to the report.

The second report from the Liberty Consulting Group says structural and staffing issues at Hydro need to be solved. (CBC )

However, Liberty said Hydro is likely underestimating that number.

"With sufficient backup supply, the duration of customer outages will be limited to a few hours, regardless of the length of the Labrador-Island link," the report stated.

"If there is not sufficient backup supply, there will be additional customer impact, including likely rotating outages for the balance of the Labrador-Island link outage … Adequate backup capacity should be available to prevent extensive and extended loss of load."