N.B. Power, J.D. Irving at odds over surplus power rates

MB Power has more than a dozen generating stations, like the Colson Cove generating station here in St. John. The utility has built a much larger generating and transmission system than is needed to service New Brunswick's daily needs. And that is by design. MB Power maintains excess generating capacity on purpose so it doesn't get caught short. If one or two stations are down for repairs or a cold snap causes demand for electricity to spike. But all of that extra generation also means NB Power has the ability to produce surplus amounts of electricity and sell it. For years, MB Power has sold most of its surplus energy to nine New Brunswick industrial customers at preferred rates, including the paper mills. But this year, for the first time, the Energy and Utilities Board granted the utility permission to sell what had been surplus energy to other provinces or U.S. states. It has meant more money for NB Power, but it's driven up the price of the energy left over for the non-industrial customers, and that has triggered a fight. Traditionally, some of the largest users of surplus electricity in New Brunswick have been paper mills. J.D. Irving Limited says NB Power's export of surplus energy is driving up the price it pays. Irving asked NB Power to reinstate preferential pricing on surplus power for industry, but was denied, and so Irving is taking the issue to the New Brunswick Energy and Utilities Board. In a letter sent to the board and copied to NB Power in early October, J.D. Irving Executive Vice President Mark Mosier said his company is facing at least a $10 million increase to its annual electricity costs because of changes to surplus power pricing, and he suggested that could lead to the closure of the company's East St. John paper, mill, Irving Paper Limited. We could reverse this, it could be changed, but somebody else will have an impact. In the legislature, New Brunswick Energy Minister Rene Legacy said he understands Irving is upset. He said NB Power getting the best price it can for surplus energy it sells is just business. Now, interruptible customers get a preferred pricing because it's extra power. Now, before they used to get a better benefit, but lately there's been more demand. New Brunswick's Energy and Utilities Board has told J.D. Irving that it will convene a hearing into the surplus pricing issue as quickly as possible, but warned that a hearing will be comprehensive and likely take months.