NB Power

Potential energy┬áNB Power is the state-owned power generation and delivery company in the Canadian province of New Brunswick. As president and CEO David Hay tells Keith Regan, the utility aims to demonstrate how a state-run utility can improve operations by learning from the private sector. Like utilities across North America, New Brunswick Power came into being when government consolidated smaller private power companies to create a state-run electrical monopoly. ┬á Now known as NB Power, the utility was subdivided in 2004 into five units, a holding company and units for generation, nuclear, transmission and distribution/ customer service.The utility runs under a government mandate to break even while delivering power services in the most cost-efficient manner possible. To do that, president and CEO David Hay has brought decades of private sector experience (Hay is a lawyer by training and worked in the mergers and acquisitions unit of a major Wall Street bank) to help the 2,500-employee utility run more like a private corporation. ÔÇ£WeÔÇÖve got a tremendous team creating tremendous opportunities by understanding that weÔÇÖre going to work a model that operates in a government framework, but operates well enough to get the respect of the private sector,ÔÇØ Hay says. The utility has focused much of its energy in recent years on the power generation aspect of the business, where Hay says the biggest bang for the buck can be found. The utility generates power from plants fueled by water (hydroelectric plants on the St. John River), coal (including the top-producing coal-fired electricity plant in North America), oil and nuclear. Its nuclear plant, the Point Lepreau Generating Station, is currently shut down for an 18-month refurbishment that will give it another 25 years of useful life. New Brunswick is the third most energy-intensive province in Canada, but one of its largest industries, the forest products sector, has contracted due to overseas competition and the North American housing slowdown, so demand is not rising rapidly. The winter is the peak demand season for the utility, and in summer it shares excess power with the neighboring New England states and points south. Demand from New England is expected to be especially strong for the new renewable energy capacity being brought on board from a series of wind farms being planned around the province. A second nuclear reactor is also being considered. ÔÇ£We have always had a pretty high acceptance rate for nuclear power here, and now the pendulum is starting to swing back in favor of that option as people realize there are only so many options for us to become less dependent on foreign oil.ÔÇØ NB Power is working toward a government-mandated goal of generating 10 percent of its 4,000 megawatts of electricity from renewable sources, and late in 2007 it received proposals for as much as 1,400 MW of wind power generation capacity from across the province. NB Power also has several other planned upgrades to its transmission system, which benefits from being a circular, loop system with many communities connected to the grid from two locations. Thinking like a private company has helped NB Power gain a reputation as a good employer, ranking in the top 100 places to work in Canada by MacleanÔÇÖs magazineÔÇöthe only New Brunswick-based company on the list. Hay says that in part may stem from a decision to offer an early retirement package that cut 10 percent of the workforce. ÔÇ£No one was forced out, but we did make some room for some new flowers to come out and bloom that might have been overshadowed by the big trees.ÔÇØThat same philosophy extends to how the utility works with suppliers, striving for a partnership approach. For instance, it worked closely with Babcock & Wilcox, the firm that installed the leading-edge coal emissions scrubbers in the utilityÔÇÖs plants. The utility lays claim to the first, third and sixth scrubbers ever installed in Canada. ÔÇ£WeÔÇÖve been ahead of the curve on the environmental side,ÔÇØ says Hay. At its Coleson Cove plant, scrubbers were installed as part of a $750 million upgrade that focused heavily on reducing pollution. ÔÇ£If B&W has a client in the US and they want to sell them on their scrubbers, they tell us to take them to St. John or Belledune, and they know theyÔÇÖll make the sale,ÔÇØ says Hay. ÔÇ£It all makes sense. WeÔÇÖre happy to showcase what weÔÇÖve done, and it demonstrates the way we like to work with companies as partners.ÔÇØNB Power also works closely with environmental engineering partner Jacques Whitford, turning to the consultants ÔÇ£whenever we touch a shovelÔÇØ to ensure environmental compliance and minimal negative impacts on the communities where it operates, and with Atomic Energy Canada Ltd, with whom it will work on the refurbishment of the CANDU technology inside the utilityÔÇÖs nuclear plant. ÔÇ£That technology and that rebuilding process can be fraught with difficulties, and that can lead to cost overruns. We said up front that weÔÇÖve all got to understand there will be no win-lose here. It will only be win-win or lose-lose, and once you do that, itÔÇÖs like an interest-based market. People and companies realized weÔÇÖre all trying to do the same thing. And once you have that at the top of the flagpole, everybody acts and reacts differently.ÔÇØ The results of the efforts are a host of accolades and positive benchmarks. Its Belledune coal generating facility won the ÔÇ£best performerÔÇØ award from the Electric Utility Cost Group for its five-year performance record. The Point Lepreau Generating Station nuclear plant has had 23 years of operation at or above design capacity and recorded more than a million work hours without a lost-time accident to an employee. Despite being pounded by Atlantic winter weather, the power system for the province remains highly reliable. ┬á