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After nearly a decade of doing business with Newfoundland and Labrador’s Public Utilities Board, U.S.-based Liberty Consulting Group is severing the relationship.
The company has acted in an advisory role and kept a watchful and critical eye on Newfoundland and Labrador Hydro, exposing cost overruns and schedule delays with the Crown corporation. It also questioned and challenged Hydro in quarterly reports on the overbudget Muskrat Falls megaproject and its integration into the power grid.
Liberty president John Antonuk had some parting words of warning over how N.L. Hydro is preparing for the future.
In a news release on Wednesday, he wrote about his concerns regarding the pace of creating a reliable backup for Muskrat Falls.
“As you know, I have been concerned for some time about the pace that Hydro has kept in addressing solutions that can contribute to that future, a pace that the Board has been trying to increase,” Antonuk said in a statement.
“In reflecting on what that pace means, I have come to see two important things — the long road that unfortunately still lies ahead in addressing long-term reliability makes me no longer comfortable that I can keep together the team that has been assisting in addressing that subject.”
Antonuk said Liberty would stay on until the PUB has found a replacement.
Critic will miss Liberty’s expertise
Ron Penney, a former high-ranking public servant who chairs the Muskrat Falls Concerned Citizens Coalition, said he was shocked when he heard Liberty was ending its relationship with the PUB.
“They’ve been very independent and it turns out very accurate in terms of their criticism for the project. So it is very unfortunate,” he told CBC News.
Advocate Ron Penney says it’s “very unfortunate” that Liberty Consulting Group has departed from its advisory role with the Public Utilities Board. Penney, a former high-ranking public servant who chairs the Muskrat Falls Concerned Citizens Coalition, says he was shocked by the announcement.
He hopes the board will be able to find another organization that can match the work Liberty did.
Without the knowledgeable people at both Liberty and the PUB — which regulates utilities in Newfoundland and Labrador — Penney said the public would never have known about the Muskrat Project delays, among other issues with a megaproject that was announced when Danny Williams was premier and which is still not fully operational.
However, Penney has his doubts over Liberty’s future replacement, pointing out that the province recently appointed Kevin Fagan as the board’s chairperson.
“I’m sure he’s very competent and so on, but it’s a very big conflict of interest because he was in charge of regulatory affairs,” said Penney.
“And coming up, probably next year, is the rate application to pay for Muskrat Falls, and he’s been in the thick of that.”
Penney thinks that potential conflict of interest could mean Fagan will not be able to participate in important hearings.
Slow and steady
There are reliability concerns with the Labrador Island Link that brings Muskrat power to this province and Nova Scotia, and that a backup will be needed.
At the moment, the backup is the Holyrood thermal generating station, which is an older facility and a polluter, as it burns heavy fuel oil to produce power.
Hydro is anticipating greater demand for its power as more consumers switch to electric vehicles and ditch oil heating their homes.
One of the issues Antonuk raised in his letter was around N.L. Hydro delaying considering adding a gas turbine capacity to the Holyrood generating station, which he said could increase power reliability.
He wrote, “if proven feasible, the timing for installing such a resource may have the potential to avoid hundreds of millions of dollars from extending Holyrood.”
Hydro CEO Jennifer Williams was not available for an interview.
In a statement, the Crown corporation defended its slow and steady approach.
“The utility regulatory process is a transparent and thorough process, one that we value and one that will continue to play a critical role as Hydro and others ready our future electrical system to meet customer’s expectations,” it stated.
It also contained a rebuff to Antonuk’s letter regarding the addition of gas turbines at Holyrood.
“We also are insistent that we do the appropriate work to gather all evidence necessary to make well-informed and prudent decisions that benefit the people of this province,” the statement said.
“Hydro intends to honour the lessons of past decisions as we look to the future, and rushing, in our view, is not prudent.”It added that N.L. Hydro hasn’t seen evidence that proves any specific solutions, such as a gas turbine, is the right solution.
It further added it would not proceed in this direction without a “fulsome evidence package as is our legislative requirement.”
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