FREDERICTON, N.B. – NB Power has reduced its net debt by $55 million and expects a fourth consecutive year of earnings in 2013-14 despite incurring $12 million in storm expenses during the last quarter and some of the most volatile natural gas market prices in years.
The financial impacts of the storm are included in NB Power's third-quarter financial report, available online.
Restoring power to more than 88,000 customers following a series of destructive winter storms cost NB Power about $12 million. This figure includes nearly $9 million for contracted crews from within and outside New Brunswick and $3 million in extra costs for utility crews and materials plus meals, travel, vehicles, and lodging for the more than 600 professionals who helped with the 11-day restoration effort.
NB Power crews and contractors worked about 75,000 person-hours in late December and early January without a single safety incident to repair power lines and infrastructure damaged by freezing rain, winds and heavy snow.
"These were the most damaging storms to hit our power grid in decades, and I wish to assure our customers that our rates will not be affected by this expense, and the cost of the restoration will not be reflected on monthly power bills," said Gaëtan Thomas, president and chief executive officer, NB Power. "Thanks to strong cash flows, we continue to meet our commitment to reduce debt and a forecasted strong fourth quarter will contribute to another year of positive earnings for us and our customers."
Year-to-date results for the quarter ending Dec. 31 indicate that a near 100-per-cent capacity factor performance at Point Lepreau Generating Station since November and better-than-expected energy export sales helped NB Power make progress on debt reduction and improved cash flow.
However, last spring's unplanned outage at Point Lepreau, higher-than-expected pension costs, record cold temperatures in December, the significant costs of restoration from the late December storms and volatile fuel prices resulted in negative earnings of $15 million to this point in the fiscal year. Even with the impact of the storm, NB Power is still forecasting positive earnings for the entire fiscal year as it has since the beginning of the year.
"Record cold temperatures as we had in December affect our customers and impact our finances as well," said Thomas. "To meet those peak loads that come from the extra customer demand for heating, we needed to run our most expensive generation and buy additional electricity on the New England market at very high prices. That is why our long-term strategy is all about reducing and shifting that peak to save customers money on their bills."
Given the impact of the holiday storms, NB Power is preparing for an expanded tree trimming program, expected to get underway in April and May. This will include some clean-up activities as part of NB Power's regular spring tree trimming preventative maintenance program.