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Introduction and Corporate History

Electricity Comes to New Brunswick

On April 24, 1994, NB Power entered its 75th year of service to the people of New Brunswick. Electricity was no novelty to the province in 1920. Indeed, the Saint John Electric Light Company was in business as early as 1884, only two years after Thomas Edison had launched the world's first large scale power distribution network, in New York City. The Moncton Gas, Light, and Water Company brought electric service to Moncton in 1886, and the Fredericton Electric Light Company was close behind, commencing service to the provincial capital in 1887.

However, it was in 1920 that the Legislative Assembly adopted the New Brunswick Electric Power Act, initiating the consolidation of a patchwork collection of private generation and distribution facilities into a single public utility. The government's mandate to the New Brunswick Electric Power Commission was to provide electricity to the people and industries of a growing provincial economy - a role it continues to play to this day.

The New Brunswick Electric Power Commission

The 1920s saw the Commission take its first steps towards achieving the integration of power from a wide variety of sources into a coherent system. Much of the generating capacity in the province was owned by pulp and paper companies. In 1921, the Commission actually found itself in the position of purchasing power from Consolidated Bathurst Ltd. for delivery and sale to its first commercial customer, Fraser's near Millbank. By 1922, however, the Commission had built its first dam and generating station, on the Musquash River, and within the next year, had installed transmission lines to Saint John, Sussex, and Moncton.

In the 1930s, electrical power played a key role in the economic development of New Brunswick. The construction of a thermal generating station at Grand Lake ensured a steady demand for 20,000 tons of coal per year from the Minto mines. This facility produced power for Fredericton and Marysville. At about the same time, a new line from Dalhousie to Belledune introduced electrical service to residents of the North Shore. Consolidation of the system continued with the purchase of municipal distribution networks in Chatham and Newcastle.

The war years of the 1940s saw many Commonwealth airmen coming to New Brunswick for flight training. To serve the needs of the air force bases, work crews from NB Power and the military worked together to design and install additional generating and transmission capacity. After the war, this infrastructure would serve the province well, permitting a rapid expansion of domestic service in response to growing demand. Installation of diesel generators brought electrification to many smaller, more isolated communities, such as St. Stephen, Saint-Quentin, Shippagan, and Grand Manan. In 1949, the Commission moved its head offices from Saint John to Fredericton.

NB Power Enters the Post-War Era

By the early 1950s, demand for electricity had outstripped supply. With power rationing in place for the first time in the history of the Commission, it was evident that additional generating capacity was badly needed. Construction of the Tobique dam and hydroelectric generating station was completed in 1951. The Beechwood station was inaugurated in 1955, and private, commercial power stations at Milltown and Grand Falls were purchased in 1958 and 1959, respectively. It was during the 1950s, too, that the concept of an integrated, province-wide power grid, with links to systems in adjoining jurisdictions such as Maine, Quebec, and Nova Scotia, was adopted by the Commission as a guiding strategy.

In September, 1960, the first power line interconnection with the province of Nova Scotia was energized. During the decade that followed, continued growth in the demand for electrical energy led to the construction of three major projects: the first high temperature, high pressure thermal plant in the province, at Courtenay Bay; the first phase of the Dalhousie thermal generating station; and the extensive Mactaquac hydro complex with its 40-metre dam and 100 kilometre headpond on the Saint John River.

In the 1970s, the Commission, now renamed Énergie NB Power, and sporting a new corporate logo and identity, entered into an agreement to purchase low-cost hydroelectric energy from Hydro Quèbec, and installed the world's first solid state, high voltage, direct current converter station at Eel River. Another interprovincial power link was established in 1978 with the installation of a pair of 138 KV submarine cables to connect the New Brunswick and Prince Edward Island grid systems.

As New Brunswick and its neighbours moved towards establishing an integrated power grid, it became increasingly cost-effective to build stations with greater generating capacity. The negotiation of a contract with New England power authorities enabled the Commission to build the oil-fired Coleson Cove plant with a third 335 MW generating unit, in addition to the two that had initially been planned to meet in-province needs. Ironically, the completion of this project coincided with a world-wide energy crisis which drove the price of crude oil from $3 to $37 per barrel. Instability of fuel prices was a major factor leading to the decision to begin construction of a nuclear generating station at Point Lepreau in 1974.

Broadening Corporte Strengths in the 1980s and 1990s

During the 1980s, Point Lepreau came on stream and rapidly became a world leader among nuclear power plants, for its enviable record of availability. Environmental and cost concerns encouraged the utility to experiment with alternative fuels. The quest for efficiency also led to a changeover from traditional administrative methods to a computer-based system that has won the company a leading place among the most technologically advanced utilities in the world.

In the 1990s, the Corporation's determination to combine excellence and efficiency continues unabated. October 1993 saw the integration of the 450 MW coal-fired Belledune facility into the New Brunswick power system. The first base load unit to be commissioned in the province in 10 years, the modern plant is equipped with the first limestone flue gas scrubber in Canada. Although construction of the Belledune plant began in 1989, the purchase of power from Hydro Quèbec satisfied the growing demand for electrical energy until its completion.

NB Power is proud of its many achievements such as the first utility scrubber in Canada at Belledune, the conversion of the Dalhousie plant to Orimulsion_ and the retrieval and recycling of waste by-products from stack emissions. Now, with sufficient generating capacity to sustain the province for the rest of the decade and well into the future, much of the emphasis rests on improving efficiencies and fine-tuning a state-of-the-art system.

A More Private Sector Style of Operation

The past five years have marked a transition for NB Power, characterized by the Government's desire to have the utility operate more like the private sector and less like an arm of government. The Commission became subject to formal regulation for the first time in 1990, when amendments to the Public Utilities Act required changes in charges, tolls and rates to be subject to approval by the Public Utilities Board (PUB). A series of generic public hearings covering all aspects of NB Power's operations exposed the PUB to the nature of the business. These were followed by full rate hearings in 1991 and 1993.

To reflect the reality of the complex business operation it had become, the Commission changed its name to New Brunswick Power Corporation in 1991. In 1993, the Government announced a number of changes intended to reflect a more private sector style of operation, including the planned appointment of the first non-elected Chairperson in NB Power's history. Changes to the regulatory process were also announced, including a requirement for the PUB to review any direct capital expenditures related to additional generating capacity, and a move to a "price-cap" regulation model. Under this model, future annual rate changes amounting to less than 3% or the rate of inflation, whichever is higher, will not be subject to regulatory approval.

Business Planning

As part of these fundamental changes, NB Power committed to the delivery of a five year Business Plan to be updated annually. This commitment ensures an open accountability process with the public, the provincial government and the Legislative Assembly. The first such plan was tabled in the Legislative Assembly in April 1994 and was referred to the Standing Committee on Crown Corporations. Public hearings on the plan were held by the Crown Corporations Committee in the summer of 1994, and reports were issued by the Committee in December 1994 and January 1995 each containing recommendations for future Business Plans. The second Business Plan was tabled in the Legislative Assembly in March 1995.

This document represents the Corporation's third public five year Business Plan. A brief recap of NB Power's history is followed by background material on the nature of electricity and electric utility operations and specific material on NB Power. This information is presented to better explain complex issues facing NB Power, choices made in the past and future challenges.

The overview material is followed by focused business plans, including details on the Load Forecast, a discussion on external factors influencing operations, including some sensitivity analysis, and detailed financial forecasts. The document outlines NB Power's ongoing commitment to maintaining competitive rates for its customers. Additionally this Business Plan allows all customers to better understand the issues which the Corporation is addressing to remain competitive.

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