Did an unasked question cost N.B. Power customers $158 million?
N.B. Power has been criticized by its regulator for not asking enough questions about $158 million in potential savings on a major generator repair at the Point Lepreau Nuclear Generating Station that customers are now responsible to pay.
The New Brunswick Energy and Utilities Board (EUB) issued a decision on Friday, signed by chairperson Christopher Stewart and members John Logan and Michael Pickup, retroactively approving the 2025 refurbishment of Lepreau’s main electrical generator.
The board did agree repairs to the one-million-horsepower unit were urgent and N.B. Power was not acting in bad faith by undertaking them without permission, but it questioned a lack of analysis on a cheaper option for the project that, if feasible, it said could have saved N.B. Power customers up to $158 million.
“The lack of fulsome analysis on this point has caused the Board concern," the board wrote, adding that N.B. Power’s actions showed a “lack of rigour in its decision-making.”
The repair was necessitated when N.B. Power discovered a fault in the main generator at Lepreau in the summer of 2024.
Full repairs were deemed to be not possible for at least a year due to a lack of replacement parts and expertise. As an alternative, a temporary fix was designed and executed to allow the critical generating station to operate through that winter.
N.B. Power hired Toronto consulting engineer Ian Thompson to certify that the temporary generator repairs would last that winter, but the utility neglected to ask Thompson to evaluate whether they were good enough to hold over two winters.
N.B. Power’s plan was to start full repairs on the generator in August 2025, but evidence at the EUB hearing showed that delaying the project until April 2026 could have saved up to $158 million.
The demand for electricity is weaker in the spring and the price of replacing Lepreau’s daily electrical output would have been considerably lower.
However, delaying generator repairs that long would have required the temporary fix to last for two winters and Thompson testified no one asked him to evaluate whether that would be safe or feasible.
“We never thought about it beyond nine months when we wrote this document,” said Thompson under questioning by the EUB chairperson.
“I could have been convinced to go a bit longer, but we weren't asked that question at that time.”
In its ruling, the EUB said repairing the generator in 2025 may have been the right decision, but it is impossible to know with certainty given the failure to fully investigate the feasibility of waiting until the spring of 2026.
“The Board accepts that there was good reason for proceeding with the project sooner in order to be finished before the winter, but believes there should have been a more fulsome analysis conducted by N.B. Power,” it wrote.
In an interview, Steve Bagshaw, N.B. Power’s chief nuclear officer and site vice-president for Point Lepreau, said the $158 million in savings identified by the EUB had repairs been delayed until 2026 were only “potential savings.”
“Operating longer with the temporary repair, there were no guarantees for the duration of that temporary repair. And so risk associated with extending operation could not be precisely quantified,” Bagshaw said.
“The consequences, however, of an unplanned outage were well understood.”
As an example, Bagshaw said during the recent cold snap in January, if Lepreau had gone down, the cost of replacement power would have been about $10 million per day.
“So, you know, it just underscores further just how the decision that we came to, to rewind the generator with a permanent repair, was the prudent decision both financially and for energy security as well.”
Bagshaw said the utility does "acknowledge the feedback from the board” and would factor it into future projects that come before the EUB.
In its decision, the board also scolded N.B. Power for choosing to ask for permission retroactively, writing this “deprived the Board of a meaningful ability to assess the prudence of the selected option, to the potential detriment of ratepayers.”
“If N.B. Power had applied for approval in advance, the Board and ratepayers would have at least had the opportunity to avoid potentially imprudent replacement power costs," it wrote.
Under the variance account regulations, most of the costs for the generator repair falls on N.B. Power customers, not on the utility directly. A rate rider or surcharge is added to customer bills to pay for the expense.
