FREDERICTON, N.B. – Now that the extreme cold weather that gripped the province for the past week is subsiding, NB Power reported that it reached some seasonal, though not historical, peaks during that period.
“Last week, our focus was primarily on safely and reliably meeting the power needs of New Brunswickers,” said Gaëtan Thomas, president and chief executive officer of NB Power. “Going forward, our focus will be on engaging our customers in an effort to help them save money and help us reduce the amount of high-cost energy that is required to meet high demand like we saw last week. It is a joint effort that will pay off for both parties.”
New Brunswick is a winter-peaking jurisdiction, which means that the highest use of electricity happens in the winter. This is because more than 60 per cent of New Brunswick homes are heated with electric baseboard, one of the highest percentages in the country. This contrasts with the southern United States, which has summer-peaking utilities due to the high demand for air conditioning during the summer months.
Average demand for the New Brunswick electricity grid is between 1,000 to 1,400 megawatts (MW) in the months when home heating is not a necessity. During peak periods last week, such as 7 a.m. on Wednesday, Jan. 22, demand peaked at nearly 3,100 MW. NB Power was able to meet that demand by using all of its available generation assets and by purchasing electricity on the open market. During the cold snap, the recently refurbished Point Lepreau Generating Station was a key asset as it performed as expected as a foundational element of the grid.
The challenge for NB Power is that the cost of meeting that peak demand is high. Each generating asset has a unique cost for the power it produces; with the lowest-cost assets maximized at all times they are available. Unfortunately, during peak periods such as last week, the utility is forced to use its highest-cost generation at plants that use fossil fuels, resulting in both higher costs and higher emissions for the utility.
At the same time, NB Power is also required to purchase electricity on the open market. The price for that electricity peaked at a near record of 27 cents per kilowatt hour on Thursday, Jan. 24, more than double the price NB Power charges residential customers.
“Luckily, these high-demand days only happen about five to 10 times per year, so the financial impact, while significant, can be managed,” said Thomas. “But the real impact is in having to keep those high-cost assets on stand-by all winter long just in case they are required. The key to keeping our rates stable over time is to lessen the need for those assets and lower our overall production costs.”
NB Power is investing in a new reduce and shift demand strategy that will include investments in energy efficiency and a smart grid project with Siemens Canada. The emphasis of the project will be helping New Brunswickers better control their energy use and costs, and allowing the utility the ability to use stored energy, rather than needing to generate more.