Power now, pay later: Muskrat Falls generating station complete
Customers will see their bills increase some time in 2022
All four generating units from Muskrat Falls are now ready for service and will supplement existing power sources in Newfoundland and Labrador this winter, says Newfoundland and Labrador Hydro.
At a media briefing Monday, N.L. Hydro CEO Jennifer Williams said the news is a significant step toward the final completion of the delayed and over-budget Muskrat Falls project.
Now that Muskrat Falls power is available through the Labrador-Island Link, the company will spend less on fuel for the Holyrood power plant, which will remain in service while the link is in testing.
The link is a high-voltage, 1,100-kilometre DC transmission line from Muskrat Falls in central Labrador, site of the 824-megawatt power-generating station, to Soldiers Pond on the Avalon Peninsula.
During a technical briefing, representatives from N.L. Hydro said the province gets about 30 per cent of its power from the Holyrood power plant, and about $200 million is typically spent on fuel annually, depending on the price of oil.
When running at its peak during winter, the plant burns about 18,000 barrels of oil daily.
The power coming from Muskrat Falls will be able to replace about two-thirds of the power coming from Holyrood, said N.L. Hydro.
Electricity rates to rise later in 2022
According to Williams. customers will not see an increase in their bills until the rate mitigation deal between the provincial and federal governments has been finalized — and rates will not double. She said prices will go up later in 2022, but couldn't give a precise time frame.
She said N.L. Hydro has applied for a deferral account with the Public Utilities Board that will capture costs and savings that will be dispensed when the rate mitigation deal is done.
"We're very conscious of the costs," Williams said.
Until rate mitigation kicks in, N.L. Hydro plans to pay for the $34 million monthly Muskrat Falls mortgage through savings on oil for the Holyrood plant, funds from operations and borrowing.
N.L. Hydro representatives said while the link is being tested this winter, customers can expect some power outages of about 10 to 20 minutes.
"We have to test the new assets more and more at higher and higher power levels," Williams said.
Project should be completed by winter's end: Williams
The peak capacity of the link will be 900 megawatts, but is currently at 330 megawatts while the company works with an interim version of the software, Williams said. The company plans to increase the power to 400 megawatts over the first quarter of 2022.
"We have been getting good benefit to date, and we can expect to get at least that much through this winter," she said.
Williams said N.L. Hydro is working with interim software that will provide the island with Labrador power while GE Canada, the company that is making the custom software, works on the final version.
In October, N.L. Hydro announced that the project would not meet its Nov. 26 completion date, and would likely be delayed until March due to problems with the control and protection software for the link. On Monday, Williams said that date remained the same.
"The current schedule is the end of this winter," she said.
A portion of the 330 megawatts will go to to Nova Scotia as part of the province's agreement with Emera, but N.L. Hydro representatives could not say exactly how much.
Williams also discussed last week's outage, which left thousands of Labrador residents without power for more than a day last week.
She said a line in a remote area between Churchill Falls and the Upper Lake Melville region was damaged in a freezing rain storm. The line is decades old, and was in the process of being replaced.
Williams said since the replacement would eventually require a 12-hour outage anyway, the company decided to take advantage of the unplanned power loss to install the new line.
"We were confident that doing the cutover to the new line would be less time than finding and repairing the fault on the old line."
The new line was put into service Friday evening, and as customers in Labrador were added, some customers in Newfoundland briefly lost power due to a trip of the link.
Williams said the new system will increase reliability for Upper Lake Melville residents.