18 c/KWh – WARNING – NOT EXACTLY AS ADVERTISED

Guest Post by PlanetNL

PlanetNL12:
18 c/KWh – Warning – Not Exactly as Advertised

The last day of NL Hydro witness testimony at the General Rate
Application hearings at the Public Utilities Board revealed a cruel and
regressive plot twist. 

A senior NL Hydro manager on the witness stand indicated that
Government’s post-Muskrat mitigated rate target of 18 c/KWh was merely an average figure.  He said Hydro was already considering a rate
design scheme that would be presented to the PUB in the coming months based on two-tier
declining rates.  In other words, the
first part of energy used will cost more than 18 c/KWh but the rest will be priced
lower.  When all residential users are
added up together, the increase will average out to a 55% over today’s rate.
We won’t know Hydro’s exact details for a while, but a model
is presented here that plainly shows not everyone will be hit equally.  A substantial number will be hit hard while a
small number barely take a hit at all.

………….

What follows is an analysis for residential rates only.  Commercial energy rates will presumably be
modified to implement essentially the same system – business owners and
managers will have to use their imagination to think how badly it affects them.  The industrial user group, which consists
mainly of Vale’s Long Harbour facility and the Come By Chance refinery, is
expected to be given a get-out-of-Muskrat-free pass by Government.
 

Predicted
Rates in a Two-Tier System

Without turning this post into a complex lesson in algebra, let’s
get some realistic numbers into play.  The
base energy is likely to be set at a rate of 22 c/KWh.  This first energy block is likely to be 1000
KWh per 30-day billing period.  The
second block is simply any electricity used above 1000 KWh per month and it
will be priced far lower: 9 c/KWh is a probable rate.

The idea of a declining rate design is to recover the Muskrat
cost and other Hydro operating overheads in first block revenue and then the
second block is streamlined down to the essential cost of generation and distribution.
 In a very narrow sense, without looking
at the broader impacts of this rate design approach, the declining rate scheme
is actually a technically astute fit to the incredibly high fixed cost
structure Hydro must deal with. 

Admiration can be only be deserved, however, if we look at the
impacts and like what we see.  Most of us
are going to be outraged at what Premier Dwight Ball and Nalcor CEO Stan
Marshall have been keeping secret for quite some time.  The tyranny of mega-project madness,
deploying huge amounts of public capital to benefit the few at the expense of
the many, is clearly continued in this rate design scheme.

Expected Impact
on Three Example Home Types

For the main part of the market, customers with electric heat
in small to average-size housing, the average rate paid in the two-tier system
will work out close to the intended average of 18 c/KWh, a 55% increase over
today’s rate of 11.4 c/KWh.  This is
after all, what Premier Dwight Ball promised us when he put forward his big lie
about the Maritime average rate being 18 c/KWh: we busted that here on July 30
by demonstrating that the accurate figure is 12 c/KWh, very close to today’s
local rate.

At the low end of monthly consumption are non-electric-heat customers
who may have wood or oil heating and can steadily get by on under 1000 KWh per
month.  They will never benefit from the
low second-block power rate: they will always pay 22 c/KWh, an increase of 90%
from today’s rate.  Stan Marshall did
tell us all a number of 22 c/KWh was to be expected, although it wasn’t meant
in the context we now understand it today.

At the high end of electricity consumption, are the super-size
electric-heated homes.  For a home that
uses double the power of the average electric-heat customer, they would predominantly
use low-price second block energy. The resulting average cost would be just 13
c/KWh or only 15% over today’s rate. 
Dwight and Stan surely didn’t want this broadcast widely. 

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Related to this Post:

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Annual Cost
Impacts

A quick look at the dollars demanded from these example household
categories will further illuminate who the biggest losers are, if not already
clear.  For our purposes here, we’ll set
aside any possible changes in energy consumption and we’ll exclude the service
fee and HST.

The annual energy charge of a typical non-electric homestead
using 9500 KWh at 11.4 c/KWh is presently $1083.  Under the two-tier scheme, their costs will
rise to $2090 per year, an increase of $1007.  Under a simple rate of 18 c/KWh, their cost
would have been $1710: the declining rate scheme stings this ratepayer by an
extra $380.

For a modest electric heated home using 19,000 KWh per year,
energy cost would be $2166.  Whether at a
simple 18 c/KWh or via the two-tier scheme, this customer’s cost will be $3420,
an increase of $1254.  Both rate schemes
are equally unwelcome.

The above two example types represent the many.  Let’s turn to the few.

A large home consuming 38,000 KWh annually presently has an
energy bill of $4332.  Government’s two-tier
rate will increase this to $4980, an increase of $648.  On the simple 18 c/KWh rate we thought Dwight
and Stan were promoting, the annual cost would be $6840.  This homeowner type benefits greatly from the
declining rate scheme. 

While a lot of people must cope with increases of over 50% and
some over 90%, the cozy cats in the big houses will be hit by only about 15%.

Paying
for Muskrat By the KWh

The huge rate increases are all about trying to pay off Government’s
unwise boondoggle brought on by Dwight and Stan’s predecessors: the project
Government and Nalcor refused to seek ratepayer authorization for at the PUB.  Now Government, under different leadership, seems
equally hellbent on rushing to pin the cost on ratepayers.  Muskrat costs are not supposed to recovered
until the facilities are 100% complete and in-service yet they’ve had Hydro try
twice this year to commence collecting increased rates 2 years ahead of
schedule.

Government has also silently refused the recommendation made
on this blogsite on Aug.6 to have the PUB properly review the cost of service
based on finding the true least cost available alternative to Muskrat.  They know it would almost certainly exclude
most of Muskrat’s cost from recovery through rates.  The resulting fair and stable rates of such a
review are not on the leadership’s agenda.

Lacking all that, you might still think these esteemed leaders
would at least have a shred of decency to try to distribute the pain equally or
perhaps even bias it a little toward those who use the most electricity but sadly,
Dwight and Stan’s plan is just the cold-blooded opposite.

The non-electric customer example must incur an increase of
$1007 to pay for Muskrat.  On their 9500
KWh they are paying a hefty 10.6 c/KWh penalty. 
Remember that was the entire rate for electricity about a year ago
including Holyrood!  This upcharge is completely
absurd considering this customer type in no way contributed to any demand for the
creation of Muskrat.  In fact, if
everyone had the same consistent month to month energy usage as this group, not
only would Muskrat not exist but Holyrood could’ve been scrapped with a better,
far environmentally cleaner, far cheaper emergency backup power system decades
ago.

The modest electric-heat customer while using double the
energy at 19,000 KWh will incur only a little more Muskrat payback in total
dollars at $1254.  Averaged out into
their total energy usage, their Muskrat penalty is 6.6 c/KWh, a full 4 cents
lower than the non-electric group.  The
electric heat users are the main group that kept Holyrood in service for winter
power needs.  By the Government’s logic,
these are the people largely responsible for Muskrat.  For them to have less responsibility seems
wrong – something odd and perverse is at work here.

The large home example though takes the cake.  Their share of Muskrat cost is only
$648.  On their 38,000 KWh, this works
out to a mere Muskrat fee of 1.7 c/KWh. 
If the ordinary electric-heat crowd seemed to get off a little lightly
then large homeowners can start popping champagne to celebrate their luck at almost
completely avoiding the much-feared rate hike. 
In fact, as their marginal cost of consuming more power is just 9 c/KWh
– the closest today is Quebec’s 9.12 c/KWh which might well the  – they might as well put in that heated
driveway they’ve been longing for while the rest of us cry into our empty
wallets.
 



Next Post
– Why Your Government is Doing This

For most of us, such a rate scheme looks like a tyrannical joke.  It’s no lie – it was laid out in the GRA
hearings.  We can only hope the PUB
understood its meaning but until the numbers are developed and presented as
they are in this post, comprehending the backwardness of declining two-tier rates
might well go unappreciated.  Running the
numbers shows that Robin Hood has switched sides – this is regressive social
policy running amok.

Next time up we’ll explain why Dwight and Stan love their
little secret rate plan and why there is no disputing that is has been their
plan for some time, probably since they took office.  For their ability to string this one along so
quietly all this time, who could argue they are proving to be as great at their
jobs as their predecessors – as instruments of societal destruction.

TEN YEARS AFTER MUSKRAT FALLS SANCTION – We will have to think abandonment of the Labrador Island Link

Put simply, whether Muskrat Falls come online or not, it cannot be relied upon. Without admitting their gross negligence at the start, Hydro is essentially saying that that we should try to salvage Muskrat Falls at an undefined cost and for for however short the duration it might operate.

THE PROOF MUSKRAT FALLS IS NOVA SCOTIA’S PROJECT

The substance of Hydro’s mission is to satisfy the contracts with Emera to get large amounts of power flowing into Nova Scotia for the betterment of that province and its ratepayers.  The Island could easily live without the Muskrat Fals project and in fact, other than for the onerous Emera contracts, NL ratepayers would be best off if it was abandoned and left to rust.

FIRST YEAR OF OFFICIAL ENERGY DELIVERY NOT QUITE WHAT EMERA BARGAINED FOR

PlanetNL52: Happy Anniversary Emera on 1 Year of Official Energy Delivery Not Quite What Emera Bargained For Despite all the bad news related to Labrador Island...

72 COMMENTS

  1. Beware the “Nuclear” Option
    Part One
    In his powerful letter to the Telegram on Saturday Edsel Bonnell borrowed a phrase from Lewis Carroll’s “Jabberwocky.” He said: ‘Beware the Mitigate, my son! The jaws that bite, the claws that catch!’ Edsel could, with equal poetic flair, have said: “Beware the ‘Nuclear’ Option.”
    Both government and Nalcor are fearful that electricity demand will collapse when higher rates are imposed to recover the inexorable costs of Muskrat Falls. Bigger than the fear that energy consumption will drop like a stone is the greater fear, that revenues will also drop, making it impossible to recover the additional $800 million in cost.
    Fuel was added to these fears by the expert testimony of Dr. Jim Feehan who presented a credible argument why demand elasticity may be higher than Nalcor has assumed. See http://www.pub.nl.ca/applications/NLH2017GRA/report/Expert%20Evidence%20-%20CA%20-%20James%20P%20Feehan%20-%202018-07-31.PDF.
    If demand elasticity is high then both consumption and revenues will fall. These fears have triggered the “nuclear” option described today by PlanetNL in his Uncle Gnarley post at http://unclegnarley.blogspot.com/2018/08/18-ckwh-warning-not-exactly-as.html and attached.
    When rates are raised consumers will seek alternatives. This is what demand elasticity is all about. In the Newfoundland context the biggest user is electric heat and consumers will find other ways to heat their homes and businesses. The “nuclear” option is to introduce a two tier declining rate system. Those using relatively little power will be affected mainly by the first tier energy rate, which will be dramatically higher. In many ways these people have few options; they are a captive audience.
    On the other hand, those using a lot of power will be driven by the second tier rate, which will be dramatically lower. This higher income group has many options but their incentive with a reduced second tier rate will be to consume more electricity.
    David Vardy

  2. Beware the Nuclear Option
    Part Two
    This two tier system was referenced at the PUB hearing on August 7, 2018 by NL Hydro official Kevin Fagan.
    See http://www.pub.nl.ca/applications/NLH2017GRA/additionalfillings/PUB-August%207,%202018.pdf for the transcript of his presentation to the PUB.
    This system is highly regressive and will hurt low income consumers unable to afford electric heat. It will benefit those higher income people who will not only be given an incentive not only to continue using electric heat but to use even more.
    Nalcor has been presenting higher demand projections than can be justified by economic forecasts and demographic trends. Their projections do not reflect the impact of higher rates on demand for electric power. Is it because the “nuclear” option has always been on the table but kept secret up to now?
    In a footnote to its June 23, 2017 update Nalcor makes the statement in chart 18 that the “May 2017 forecast is based on a targeted rate of 18 cents/kWh in 2020 escalating at 2.2% thereafter”. Under the “nuclear option” the targeted rate of 18 cents was the average rate for consumption under both tier 1 and tier 2. The small drop shown in the chart discloses only a modest response from consumers rather than the large impact predicted under a single rate system.
    Muskrat Falls has always benefited the few at the expense of the many during the construction phase. Under the “nuclear option,” with two tier declining rates, the few at the top will benefit even more, as PlanetNL has shown in his post today. This is highly regressive and totally unrealistic.
    It is regressive because it will hurt low and fixed income people the most. It is unrealistic because there is a limit to how much can be taken from the personal disposable income of low income families. Government will be forced to pay out the income support they will need to survive. The two tier declining rate system must be rejected both because it is unfair and because the reputed higher revenues will prove to be an illusion.
    The “nuclear option” should be rejected. Instead the authority of the PUB should be reinstated. The PUB should only allow prudent costs to be recovered, prudent costs that reflect the least cost option. The imprudent costs of this “boondoggle” should not be foisted upon ratepayers.
    The Liberal Government has had almost three years to take action but today the Muskrat Falls project remains outside of the authority of the PUB and Nalcor remains an unregulated monopoly.
    Along with the reinstatement of the powers of the PUB, government should also take action to rescind the take-or-pay power purchase agreement (PPA) and the regressive legislation passed by our Honourable House of Assembly in December 2012 when Muskrat Falls was sanctioned. The so-called “business case” for Muskrat Falls must be rejected and reconstructed.
    David Vardy

  3. So, the question is what are we, the majority who get hit hardest with the rates, going to do about it??? Yes, we can protest, but will that get the desired results? Unlikely!! So the only other place we can protest is at the ballot box. Of course, we have to get Ches's and Jerries's plan first. We need their plan on the table, loud and clear, not, well we will figure it out when we get elected, or get a pannel of experts to figure it out. No, if ball et all bellies up to the bar, with their plan in hand, then the other two netwits have to do the same. And we all know politicians, their only purpose in life is to get elected. And whoever gives us the best deal, we will elect them. The other two demands at the ballot box, will be to restore the power of the PUB to set the rates, and the first order of business is to rescind the take-or-pay contract. The next election, will be all about muskrat, and power rates!!! Forget your party loyalty and vote with your pocket book, unless they all offer exactly the same deal to the ratepayers, says Joe blow.

  4. Business always provides most favorable rates to the highest volume customers. Without the high volume users, the sustainability of the business can be brought into question. In this case as well, the highest volume users are most often the customers who have the means to explore alternative power sources, like renewable energy, to displace their need to buy power from Nalcor. If Nalcor does not make it attractive enough for those customers, many of the high volume customers will drop Nalcor, leading to higher costs for power for those who remain with Nalcor. Businesses cannot be run on social principles… or the businesses will likely fail. If you want to see on a large scale what happens when a free market economy is managed based on social objectives, take a look at Venezuela under the guidance of President Nicholas Maduro, a former union leader. Business and a free market economy is driven by competition, not social justice. We have had economic models other than capitalism, like communism for example, that attempted to level out wealth but they have failed miserably because the entrepreneurs with the abilities to drive economic growth choose not to work hard because there was no incentive for themselves or their families. Economic and social issues need to be seen in a different light if they are to be given proper consideration to develop effective solutions. Sometimes solutions that create balance between the two are less than perfect but the best available. The popular response to a dilemma like this is often to say make those who are wealthy pay most of the cost, as was the case with the Liberal budget in 2014. Problem is that approach often gets the opposite effect from the one anticipated, as the wealthy just pull their money out of the NL economy and move it somewhere else in the country for investment… or doctors leave for better earning opportunity elsewhere… further eroding the NL tax base and putting further pressure of NL taxpayers who stay. We already have a situation in NL where 85% of taxes are paid by 15% of the population. These views may not be popular but don't shoot the messenger. These are the factors that face the NL government but none of the politicians will talk openly about it because of possible political pushback from the NL electorate. Easier for them to not say it but act on it anyway.

    • Hi Anon 11:03,

      A great post here! You are 100% right : business can not be run on social principles. Go too hard against the wealthy people and they will just move to a better place. Systems that are ideal in theory, like communism, end up the worst in practice. A system like capitalism may not sound good in theory but in practice, proved itself as the only viable one at large scale.

      Nice to see such a high dose or realism and objectivity.

    • AJ, don’t you agree that past a certain point, tax increases can be negated by an even worst taxation base erosion?

      That's the rule of “diminishing returns” again, but this time created by some big and mobile tax payers leaving the province for greener pastures.

      And no, don't accuse me of being the author of the above 11:03 comment, don't even try 😉

    • Not for a minute ex. Mil…did you not get my Mr. Bean joke… Of course I was accusing Hercules…lol..cheers AJ. But as for the law of diminishing returns, yes I do believe in that. But we are on a different wavelength. As you know my position is the enablers have to pay their share first, and then we can see what we are left with. Sorry, we just disagree on the basic fundementals, and that's ok, we are allowed to disagree.

    • Cheers AJ, and don't worry, I was strictly joking. I knew you were not accusing me of anything – although I indeed did not get that Mr. Bean joke; I must have some newfie blood I'm afraid 😉 (That's ok, It's good blood for sure!)

      About that “enablers have to pay their share first” sentence, should I refrain from commenting, or you let me doing so…

    • Probably others that did not get my Bean joke either, so will digress for a minute. I grew up watching comedies and cartoon, and still do, like Popeye, maxwell smart, Mr. Bean, and Just for Laughs. I have watched all of Bean in French as well as in English, as he has never uttered a single word in either language. And he regularly mails letters to himself, Christmas gifts, birthday cards etc. to himself. He then rings the doorbell to advise himself that he has mail at the mailbox, and appears so anxious, excited, and surprised that he has received mail. And is very excited in opening it and it says just what he wanted to hear. So, your own mail is better than no mail, so there you go…lol. But I do believe in democracy, and not autocratic government where they decide what is good for the masses, and then try and shove it down their throat. So as a democracy we will decide which government and policies are best for us, and how a democratic government should treat its citizens, and do what is in their best interest, including a federal government that we helped elect too. Of course, you can comment on any topic you wish, my permission is never required or requested. So cheers, and keep on truck'en says Joe blow.

  5. There is little difference in my view and that of Dave Vardy and this UG post by Planet NL: How do we get the fat cats to pay more?
    Some may recall my comments that a case could be made that all pay 23 cent rates.That way the fat cats with their large and monster houses get hit the most, which is fair. With tax loopholes on personal and cooperate rates, they can often avoid increases, but hitting them on power consumption and heat for their 2 and 3 car garages would be harder to avoid, unless you devise the devil's scheme as presented here to favour the fat cats. This scheme hits the small guy with 22 cent rates while most of the fat cat power is just over 9 cents. Truly Robin Hood in reverse. And just look at Stan's photo, is it not like the Grinch that stole Christmas: that smile and upturned eyebrows.
    Also as mentioned before , in Quebec, large residential power users get hit with over 300 dollars a month demand charge, so a penalty which helps pay for infrastructure of the high winter peak consumption. This is as it should be, least we keep on truckin as usual, as to the high winter peak vs the low summer peak. A formula for future winter rotating outages when the unexpected happens.
    We have government, not by the people for the people, but controlled by the fat cats for the benefits of the fat cats. There should be outrage over this planned 2 tier system, but the ratepayers remain passive and mostly quiet.
    Of course, the minisplit users are targets here as well, my 313.00 a year heat bill will put me in the 22 cent rate. Still 600.00 for heat for me is tolerable. But I may now go to solar panels to run my minisplit, if government plays this game.
    Winston Adams

    • The wealthy are those who are best positioned to spend the money for renewable energy, eliminating the need completely for power from Nalcor. The net effect will be a further rate increase for those who continue to buy power from Nalcor. Although the wealthy are some of the hardest working people in our society, many investing long periods of time and money in education before entering the workforce or long hours over many years in building their businesses, it has become fashionable to demonize them in NL. The wealthy largely have their money invested in businesses here, creating employment, or provide vital services in our medical system. They also already pay a hugely disproportionate amount of taxes in NL. In recent years, the wealthy have been leaving this province at a quicker rate than most because of their mobility (special skills are in high demand globally) and next time a doctor leaves rural NL, we can ask ourselves if it was because of taxation or just because they got sick of listening to the criticisms of the underachievers here.

    • Wow. You really had to look a long way down your nose to write this and presumably the similar comment a ways above.

      You dangle the doctor issue to gain sympathy. This affects only a very few individuals but you want a loophole that many thousands can take advantage of.

      Blaming the poor for their underachievement. Classic stuff. Glad you stopped by to humor us.

    • Anonymous 14:03: I apologize if your comment was meant to be taken sarcastically, but since the following two comments appear to indicate that you are indeed serious, I will likewise assume you are being serious.

      The notion that somehow the rich are penalized in NL is groundless. As
      the graph in this report-

      https://www.conferenceboard.ca/hcp/provincial/society/income-inequality.aspx?AspxAutoDetectCookieSupport=1

      -indicates, NL is the L-E-A-S-T egalitarian Atlantic province in Canada when it comes to revenue distribution along class lines.

      I suspect that if one additionally factored in regressive power rate structures such as the one described in this posting, NL might well be the most stratified province in Canada (in terms of the distribution of disposable income). Be that as it may, the point is that any notion that the rich are somehow endangered/overtaxed in NL belongs to the world of fantasy.

  6. NL Hydro must be religiously reading UG and it smelled that HP frenzy building up…

    Their scheme is very clever (or diabolical) as it will basically make HP savings a mere 9 cents/KWh…

    Now, what will get somewhat more attractive is just going off grid (and escape that 22 cents…)

  7. From an accounting point of view, this two-tiered scheme provides for maximum overall Hydro revenues (in avoiding that large scale shift toward HPs/EE) while still maintaining the competiveness of NL’s businesses (including those high volume customers, as extremely well explained by anon @11:03 above).

    Obviously, those additional revenues from the rate-payers will lessen the burden that has to be shifted to the taxpayers.

    We got to sell that hydro anyways (Take-Or-Pay…), so better ensure it creates/maintains the most jobs in the process. There are no points of end up with large unsold hydro surpluses (due to EE).

    This two-tiered scheme may well be that “optimal rate” we’ve been talking about…

    • The optimal rate MAY be the too tier rate, or MAYBE NOT. Like the optimum tax rate, there is no concensus on what rate brings in most tax dollars, economists argue anywhere from 35 to 70 %. Read up on voodoo economics, under Ronald Reagan. I guess they will hand the poor a bone with some relief, and the middle class gets shafted, the rich gets a pass.
      Will it kill the minisplit uptake? Not likely, as uptake started 6 years ago with rates about 9.5 cents, and will now average more than that. It will slow the uptake, but with 400% efficiency, it is a little might mouse, and also gives summer air conditioning. Nalcor and Nfld Power must bow down to the Japanese heating technology, I suspect, while trying to mislead customers on the best units to use, to keep their revenue up.

  8. Well, this is stunning news for the landlords and renters of 2-apartment homes. If the house has a separate meter and billing for the basement renter, they are going to suffer under a lot of the expensive 22 cent power. For houses on one meter, the apartment's electricity would be paid at 9 cents instead. I don't know how many two meter houses there are but if I own a house with two meters, I'm taking the basement one out because otherwise the high bills are going to eat into my rent money when I compete with the one meter crowd. Otherwise, there's about $150 per month in the difference between the two. Thousands of customers will leave the grid pretty easy. So much for that part of this money grab.

    Ditto for the elderly staying in their own homes. In ones and twos, they'll be moving in with junior.

    Cabins and summer homes on the grid would become awful expensive too. Disconnecting and going on a generator while you're there could be the way to go for a good many.

    There are probably more ways too. This is cracked.

    • Welcome to your low carbon future. Solar panels and thermal storage should quadruple. Without a coherent Energy conservation plan by PC/Lib governments, at last the general public will survive by reducing dependency on fossil fuel and grid. Multiunit housing should return as the more economical way to build, maintain and service. Also improved land use planning, live/work neighbourhoods, less driving to work, sustainable development, etc. Cracked you say:-)

    • To any landlords out there: Your safest option is to have all the wiring in each apartment go to a small sub-panel in the apartment (an electrical box with space for perhaps 20 breakers) and have this fed from your main panel elsewhere in the home. This way your tenant can reset a breaker if they trip a breaker and you can easily install a sub-meter. These meters are less than $200CDN and could be installed next to either the main or sub panel so that the tenant can see it. You will then have the option of including light/heat in the rent or allocating the cost based on actual usage. Many apartment blocks in the USA are like this — the building buys bulk power and water and they have dozens of sub meters — often hiring a billing service to read them and send bills to tenants. An easier option might be to offer free light/heat up to some reasonable maximum, reserving the right to bill the tenant for excessive usage – like a smoker that keeps the windows wide open and the baseboards at 100% all winter long. When we get charged for water, you can do the same by feeding the apartment with a single cold water pex line and inserting an in-line water meter. These are also less than $200.

    • Anon 08:35 There are many proven ways to deliver utilities more efficiently to multi unit housing, which don't get too much consideration by Municipalities, who need to get more directly involved in Urban Planning, and energy use. A the point of planning a new mixed use, mixed income 50 unit residential building we are considering;

      Durable R2000, passive solar construction with Solar roof, low e windows, motion controlled low energy lighting.
      6 electrical appliances per unit
      Central Underground parking/unit storage
      Radiant or Hot water heating based on the local best renewable source; Solar in ground storage, etc.
      Elevator and full accessibility, (We all age and need this).
      Full maintenance, waste separation, recycling, and grounds keeping
      Incentivize energy conservation by giving rent reductions for above all in services and amenities; (Say $50/month if no fossil car or electric car). Construction Budget $200,000 per 2 bedroom unit, mortgaged CMHC 50 yr with current Fed/Prov incentives, 50% capital infusion.

  9. Inevitable, fatal, fateful, ineluctable, inescapable, necessary, predictable, unavoidable
    Inexorable, grim, relentless, stern, unappeasable, unforgiving, unrelenting, adamant, adamantine, intransigent

    Finally, as everyone is seeing the picture, I ask my question again, "What are we going to do?"

    Whine, snivel, grizzle, yammer, yawp, complain, go, kick, kvetch, locomote, mouth, move, plain, quetch, sound off, speak, talk, travel, utter, verbalize
    Mewl, wail, whimper, pule, cry, weep

    • Well Tor, you WERE TO GET HIT ONE WAY OR THE OTHER.

      By having the ratepayers to pay more, we'll shift less of the burden to the taxpayers. Nothing more, nothing less.

      The admirable accomplishment of this “22 and 9” cents rates is that we’ll save a maximum number of jobs – by maintaining a competitive costs environment for the businesses.

    • Yes, and the businesses, the Board of Trade (St John's Board) were enablers of MFs, so they should get low rates, right? And stiff the small guy or gal. Fair? All is fair in love and war and screwing the poor and middle class with the cost of the boondoggle based on voodoo economics.
      The merchant class, with business and big houses are just fine with this. And more of the burden on the back of ratepayers instead of taxpayers fits the bill as well.
      PF

    • On the west side of the country, in BC, where Fortis also operates, BC is asking for public input on a long term Clean Growth Strategy that will will released in the fall., part of the action plan on climate change to achieve economic growth by using cleaner energy and reducing emissions. , aimed at ensuring the people benefit from advances in innovation and technology., so they are reaching out to the public for input
      Issues are: Building energy labelling; financial incentives; stronger codes and standards; low carbon buildings innovation program; training and certification.
      The Heating , Refrigeration, and AC Institute (HRAI has a specific interest in clean efficient buildings). Individuals and organizations can email their submissions to BC's Climate Solutions and Clean Growth Advisory Council.
      Where is our equivalent? The proposed rate structure keeps us in the dark ages as to mitigating climate change, and customers using efficient and clean technology. The more electricity we use and waste the better. Down the rabbit hole we go again. Why is Fortis onboard with climat change mitigation in BC but here, not at all, the shareholder first and last, the residential customer taken for granted, screwed.
      PF

    • PF, you are indeed right that here "the small guy or gal" would get a relative bigger hit by this rate increase. For that reason, tax brackets (or tax credits) must to be adjusted accordingly to negate that impact.

      (FWIW, at the introduction of the GST, it was assessed that the "small guy/gal" would get hit harder than the richer, so we specifically introduced the GST tax credit in order to negate the impact – at very little administrative costs)

      PF, the alternative would be to just have a 9 cents rate all across the board, and shift the entire MF burden to the taxpayers – however at the risk of an even bigger taxation base erosion. You pick your ordeal…

    • Agree, the ideal is to counter rates with adjustments on taxes and tax credits.
      On the other hand, if MFs don't operate, and it may not, all this is useless, as high rates must be imposed to counter oil burning at Holyrood, and avoid rotating outages in winter peaks, still using baseboard heat…..so then a urgent need for minisplits! Even incentives maybe? Already they can only get 45 MW over this 900 MW line, the Telegram reports, due to software problems they blame on GE. Liberty warned of technical issues. So don't count your chicken too soon with these optimum rates.
      PF

    • Indeed, if MF doesn't operate, then totally agree that a plan B must be found. Higher rates as you say (to avoid continously run Holyrood and/or rotating outages in winter peaks).

      Or get that win – win agreement in place, allowing HQ to provide all the power needed for both NL and NS.

  10. Is there a single gem in such rates? Well, with rates at 18 cents, or 23 cents, electric cars were not so attractive. With rates of about 9 cents above 1000kkwh per month, suddenly the Nissan Leaf is looking better.
    So, reduce with minisplit and increase with the electric car, I am almost ready to order. For those who drive a lot, a good move. Maybe Ball will turn in his Audi for a Tesla? More torque than gas engines, as engineers know. Bay Roberts is already considering a charging station. And didn't Andy Wells try to go Green to try and become mayor again? Zoooommm Zoooommm. The Leaf has much more acceleration than my Prius hybrid having both a gas engine and electric motor.

    WA

    • Hi WInston,

      Instead, there is a real gem in that rate structure : it matches perfectly the Take-Or-Pay nature of MF contract. The structure ensures that people first pay the big price and than does not care much about how much power they take because they paid it already as required.

      It illustrates perfectly how and why efficiency can not be the solution to MF : MF must be paid for no matter what. Thanks to such a rate structure, elasticity will be of minimal effect because the big cost is at the beginning of the power bill, not the end.

      So as for a gem, yes, there is one. Is it a good news for Newfoundlanders ? That I doubt because it suggests that the government tries to do the impossible, which is to pay back for MF by itself. There is not enough money / money making in NL to pay such a fiasco. The more and longer the province will try, the worst the consequences will be for the population.

  11. I think this will devolve into a large, minimum monthly charge or fee just for being connected to the grid. It is a cat and mouse game. The Cat is trying to skin us while we do our best to outsmart it. The comments on multiple meters on rental units is a good example. Why not feed one home from a neighbour and share the cost? Will they ban sharing power like they do with internet connections?

    I just went up the coast through New Wes Valley and drove through every community. There were large LG brand heat pumps everywhere, sometimes two or three homes in a row. There was also a lot of firewood piles, but not as many as heat pumps.

    Nalcor will not sell as much of the lower tier power as they expect and people using oil and wood will start to look at things like solar PV with micro inverters since they will be generating 22 cent power.

    Ontario killed its feed-in tariff because it was too generous – meaning that many took advantage of the program to make money and it increased the electricity cost for everyone else to the breaking point. It was 31 cents/kwh for small rooftop solar (less than 6000 watts). Our expensive tier of .22/kWh coupled with the ever lowering cost of panels and micro inverters may very well do the same. Unlike Ontario where you can cancel the feed-in program, here Nalcor will not want to cancel the 22 cent first tier. The only way to kill solar PV / microinverter and heat pumps is to keep all electricity very cheap and look for a better way to clear the massive debt.

  12. Does anyone know the legality regarding neighbours sharing a power connection? You could have a 400 Amp service and then provide a buried armoured cable to the neighbours home. This is done all the time with public buildings when they are grouped nearby. A group of two or three homes would be well into the low price tier.

    • Wisewebwoman: Ah, but it gets even better! So many of those frozen dead elderly peasants will not have any younger kin (who will long since have left NL) who might take care of funeral expenses.

      Now, it is my understanding that Aquaculture in NL is not at the moment a profitable venture because of the price of imported fish feed. With some out-of-the-box thinking I am sure some members of your townie elite are going to get substantially richer in the near future!

      Further into the future (after a few unusually cold winters) this business model could be replaced by a system involving…refugee claimants! I can see it already…while their claims are being evaluated, with the efficient celerity induced by our (forthcoming) PHOENIX on-line Canadian Refugee + Asylum-seeker Program (better-known by its acronym, CRAP), refugees being processed (I'm sure an answer will be produced and sent them before our sun turns into a Red Giant. Yes, I am an optimist) will be in a legal limbo wherein such things as minimum wage or labor-safety regulations needn't concern any employer, thereby giving aquaculture a double boost: not only will labor costs remain low, but since on such salaries paying for heating will remain a pipe dream for refugee claimants, no fish feed will need to be imported from outside NL ever again. And as long as refugee claimants keep coming, the business model will work out fine. Considering that many countries, on different continents, produce refugee status claimants, I could see that there would be an excellent marketing angle: who wouldn't want to feel virtuous eating "multicultural seafood"?

      On a completely different topic, has anyone here seen that fine science-fiction movie classic, SOYLENT GREEN?

      P.S. (OKAY, SARCASM OFF) I sincerely apologize if the above strikes readers as offensive or tasteless, but frankly, I have no means other than black humor to voice my utter dismay and disgust when it comes to the insanity described in this posting. NL frankly seems more and more to be neither a democracy nor an aristocracy nor (as I once thought) a plutocracy, but rather a genuine kakistocracy. Look it up.

      P.P.S. (To my fellow Quebeckers) Pour ceux qui se demandent comment je fais pour pondre quelque chose d'aussi monumentalement…fucké, je le reconnais, et bien, j'appartiens à la génération qui a grandi avec ROCK ET BELLES OREILLES.

    • Yes true,NL frankly seems more and more …a genuine kakistocracy.
      I had to look it up And a old word much more used recently to also describe Trump style of government. Trump, who Ball wanted to go meet and greet.
      Now if Ex military could excuse my ignorance of the French language, and translate his and Etienne's last words, I'd be grateful.
      Winston

    • Hi Winston,

      Ex-mil said that he too always watch the clips by RBO. RBO was a group of humorists who was very active in the past.

      May things go as well as possible while you are in Texas : good news and actual health improvement,

    • Hello Winston,

      Just type "RBO" (or "ROCK ET BELLES OREILLES") on YouTube.

      It was like "This hours has 22 minutes ", but much more funny / sarcastic and DEFINITELY not politically correct. They took no prisoners, believe me. (including McDonald by exemple, despite them being a big ad client…)

      Take this one by exemple (even if you don't understand French, you get idea…) https://youtu.be/eTxmU6gdFPw
      (If you ever remember those cottonelle TP ads – see toward the end, where one of the cat is mistaken for TP…)

      Or this song – illustrating the Montreal police https://youtu.be/Kt2zv672YMI

    • Observations from Texas:As to M.D. Anderson Cancer Centre, MD does not stand for medical doctor. Mr Anderson was a wealthy cotton exporter, and in the 1930s, expecting most of his estate would be subject to estate tax, he decided instead to fund a cancer research facility in Houston, initially with 300,000 dollars, but was 19 million at his death around 1940. Its initial buildings were old army barricks.
      Anderson now handles over 100,000 cancer patients a year,and beds for 600, and adding 300 more. They operate out of some 25 buildings. A typical building is 20 to 25 story, and assocoiated with Texas University. Just one building, impressive for size and volume , not architecture, could contain all the buildings at MUN and including the new Core Science building.
      Anderson mission statement is to "Make Cancer History", but I think this is as much marketing, as cancer is not a thing of the past, but a fast growing and source of high paying jobs, paying twice on average as high tech jobs pay.
      My walk around had 2 such big towers as childrens cancer buildings, another for women's health, another for nurse training, etc,about 8 such big buildings near our hotel, and on the outskirts, a more modest 10 story Shriners kid's hospital, which had more architectural appeal.
      Staff are from many ethnic backgrounds. Only cancer patients stay at the hotel, and none appear sick, as I guess, none are are pallitive,but in search of a cure, which is probable, so like my wife, is an outpatient for a second opinion and possible treatment. Many are from outside the USA. On the day after we arrive, Anderson is again rated as number one for cancer treatment, now 14 out of 17 years.
      They are well organised. We arrive Tue, and blood work is done that afternoon. Wed at 1 we are to see a surgeon for opinions( our Nfld medical records was sent last week). At 1:05 we go in. We were to see the oncologist the following day, but this got done also Wed afternoon, and then a CT scan wed evening at 8 pm.
      The Davey Crockett site is abridge too far, so the next day we go to Galveston, less than an hour drive. With temperatures at 95, it is maybe 88 at the beach with the sea breeze, but half an hour is our limit. The beach is a quarter mile walk from the road over a boardwalk. On our return we then notice the sign "Beware rattle snakes". Many house are built on 12 ft high stilts,for hurricane resistance, so 2 sets of stairs to the main floor, not an attractive feature.
      Friday we get the written consultation reports and scan and blood reports and some follow up discussion for an hour, so not an hectic affair.
      Saturday morning, the busy cafeteria at our hotel is nearly empty, so outpatients is Monday to Friday.
      So, what takes us from Nfld to Texas? Partly frustration and desperation, yet my wife, still with cancer, as of yet, is more physical fit than I. Her chances last Oct for a cure was only 10-15 %, so there is yet good hope.
      Winston

  13. Did you know, that the recent announcement of a new offshore oil development is to produce some 3 billion in revenue for NL over 20 years. The reserve is about 300 million barrels.
    If this great reserve was used to feed the whole world oil consumption, it would run out in 3 days. Such is the scope of the problem to reign in climate change from fossil fuel burning. Every 3 days, year in, year out, a reserve this size is used up. Carbon tax anyone?
    PF

  14. All of the discussion points to one clear conclusion – the project was totally uneconomic from the start. What happens to an expenditure that is a poor investment? It gets written-off, written – down to its current value. That is what needs to happen here, NLers and our politicians, particularly, need to be truthful and state the obvious the Muskrat falls project is relatively of little or no value. The debt associated with the project needs to be managed as a public debt, federally amd provincially. The project is relatively worthless! No Surprise!

  15. Heracles thinks this 2 tier rate is an excellent thing to maximise the revenue. He is fond of the raw capitalist approach, protect the business and fat cats. Meanwhile, HQ has a power surplus, which is manageable, but they have rates of 5.9 cents for the first 1000kwh, not 22 cents as proposed here.
    Heracles gives not one idea of how to grow the load. As to Adams's electric cars, hard to separate the energy use on residential as to heating and car energy. But if electric cars mileage was checked once a year, if the rate at the meter was 18 or 22 cents, a credit of 10cents per kwh , calculated on miles used, could be given back, and so promote electricity as low cost power for transportation. If oil use at Holyrood can be added, and overcharged be credited back, so can power for cars.
    PF

    • Hi PF,

      What I said is that the 2 tier model is well designed to achieve its goal, which is to force Newfoundlanders to pay back MF by themselves. But I also said that I do not think that goal is good for NL. I think Newfoundland screwed itself beyond what you can fix yourself.

      As for the surplus HQ has, it is one of the many reasons why MF was a bad idea. To increase offer in a market where the offer is already too big is not smart at all.

      As for ideas about how to grow the load, I did not gave any because I do not think the solution is on that path. There is not enough money / money making in NL to pay back the previous debt, the structural deficit and MF. As such, one should not try to do it.

      The only solution I see is from HQ. Either by a transfer of UC to HQ or a long extension of the Power Contract, there is a way for HQ to receive a value high enough to compensate for the terrible fiasco that MF is. So by receiving the value for UC at production cost of around 4 mills, up to say 2070 (29 years extension) and the MF fiasco (13 billions in debt), the net cash value is about 0$. By transferring the clients from the maritime, at least NL and NS, HQ can now turn a benefit from such a deal.

      On NL side, to get rid of the MF fiasco and receive power at a much lower rate would also be a very real win.

      Win – Win scenario and as for me, the only win – win I can see.

  16. I guess energy efficient homes in NL which have always been a hard sell judging by what i see being built around metro St.John's will fall completely off the radar. Better to build with 2×4,no insulation and electrical baseboard heaters cranked to the max. Might even save yourself a few dollars. Man aren't we going backwards.

    • Ah, Bruno, sorry to hear of you having health issues. And perhaps your passion for the injustices of MF is a factor, as it can effect both the mental and physical health. However, UG provides a great benefit to naysayers here. You say give me liberty or give me death, but even our Charter has limits on free speech, as you cannot yell FIRE at a movie theatre. So, I recommend you try and moderate your passion, hard as that might be.
      Richard Nixon said: If I hate those who hate me, it comes back to hurt me. Trump however hates those who he perceives to hate him. Nixon a small crook compared what appears to be now unfolding for Trump, with yesterday Cohen and Maniford events.
      Perhaps Nixon,once exposed, saw the Light, I believe he said :Hating others would only destroy himself.
      I wish you well, and hope you engage here again. May death not be your choice.
      Cheers, Bruno.
      PF

  17. Dave Lane was on CBC Radio this morning and I'm still seething. He was sowing the seeds of a mil rate hike coming. Saying ,well, house prices have dropped due to the economy, so the property tax mil rate will be hiked to compensate. The economy west of Port Aux Basques is chugging along just fine so we have to compensate for pathetic,inept government direction by paying more and more and more at every turn. The sooner I can get out of this hole, the better.

    • It is strange Levy that so many like you say that intend to leave, and so would sell a house when prices are low, etc, and risk of greener pastures, …so a big decision, and people do move away, but almost no one protests or take other action to address and oppose the poor governance here, a couple dozen protest outside the PUB, with rates set to skyrocket.
      Nfld could never develop a 4 legged sheep industry, as dogs roamed and killed so many, thought our climate allows for sheep raising. Maybe that failed because we have a substantial 2 legged sheep variety, cowed by the fat cats, who control our political system.
      PF

    • Levy, this morning on VOCM, the spokesperson for the Board of Trade (St John's fat cats, and what trade I ask, that ended with the decline of the sailing schooner),
      The BOT wants a say on the Nfld carbon tax, least it affect their profits. So we have govn who wants to feed bck the carbon tx t the polluters, the off shore oil industry etc, now we have the BOT wanting it fed back to them. The common Joe or Jane is silent on this here, and will get stiffed again as like th epower rates if they are not vocal and protest. In Alberta 500 dollars a year is fed back to citizens. The tax is coming soon, and the govn is silent on their plan, which is now a done deal: screw the average citizen again, as like the ratepayer.
      Call yourself Levy Payer 2, as first the power bill, now the carbon tax credit that you will not get, so the double wammy.
      PF

  18. http://www.cbc.ca/news/canada/newfoundland-labrador/nalcor-quarterly-report-q2-2018-1.4794311
    Don't be too surprised that only $9.7B of the projected $12.7B "has been spent" (Accounting talk). What matters, and is not reported by Construction Manager Stan, (but should be), is an update on "Contract Commitments + Change Orders + Allowance for Changes + Disputed claims" along with Commissioning and Start Up Expenditures + Forecast ops expenses, if Muskrat is actually put into operation. Ball and Stan seem to be lowballing, just as they are assuring the public before the 2019 elections, (Feds and Provs), that ratepayers and taxpayers will not be hit with full recovery of Boondoggle costs. Bring on the Forensic Review. Does anyone know what Grant Thornton has uncovered to date?

    • Normal Construction Contract Lien holdbacks, (Nominally 10% payments to date), are presumed to be about $1 B, assuming "spent" implies Payment Certificates processed.

      This would indicate that "Uncertified Work" including all allowances for Final Certification is estimated at $2 Billion. Would some of the knowledgeable PEngs who post here, give us your comments please.

  19. So Dwight pulled the high rates and taxes for debt rugs out from under us today.
    An election promise, but it seems like he has a plan in the works for 2022 or thereabouts.

    I really don’t care what we have to give away as long as I am not stuck in a eat or be warm conundrum.

    Maybe I am naieve.

  20. European rates averrage 0.22 Euro per kWh thats about $0.33 in our dollars. Makes $0.18 seem like a bargain. Its just a matter of time before rates go up even more to encourage efficiency of use. Its cheaper to ration it out and charge more in the long run than to add more capacity. If power rates eventually do go up across the country, it may actually make some money. But for now, its a big sinkhole.

    • Also consider how much France relies on nuclear ; that their hydro potential has no common points with Qc or the Churchill river, even less when considered on a per capita basis…

      No point comparing the local situation with the one in Europe…

    • Of course you can compare, allowing for climate difference etc. Europe is energy efficient and Nfld and Canada energy wasteful. HPs are common in Europe for decades, and can be also used for making hot water not only space heat. And they use distributed heat as well. When energy efficient you use less and rates can be higher and all is fine. Here we have had low rates and energy inefficiency, and thought to continue on that path with MFs as least cost. Now Feehan says (a bridge a little too far I suggest) that efficiency alone could spell doom for Holyrood and MFs, but 6 years too late. Meanwhile we continue with inefficiency; but…. best thing this inefficiency says Heracles, and also the power companies who want to keep revenue high.
      So Heracles you can now repeat your argument; drum roll : "must be inefficent until Take or Pay is no longer in place". Ball said yesterday Take or Pay must die, maybe he lie? Even so, Still there is the natural law of the turnip.
      WA

  21. The tiered system is funny to say the least. Give a break to the large energy sucking homes while shafting the smaller homes. It just doesn't fit with an energy efficient future. If you build an energy efficient house like I did (recently finished a passive house flatrockpassivehouse.blogspot.ca), you get penalized for using less power? It makes no sense. If you choose to purchase a huge energy sucking home you should pay. I have used less than 1000 kWh for 4 months straight and electricity has been my primary energy source. So I will pay double for my service compared to a energy sucker of the same size? Investing in the future is about sustainability. Low energy homes and retrofits would make a massive dent in our energy consumption. So it appears that the tiered system will penalize people wishing to build energy efficient houses and buildings.

    My previous house used almost 36000 kwh per year + $1200 in propane. My current house has the same square footage and the estimate is about 12000 kwh per year. The energy usage is about 75% less. So small and low energy homes will foot the bill of MF? wild…to say the least. But, of course, it doesn't surprise me that much I guess.

    • They all talk about price per kWh like it's $ figure comparable to a liter of fuel. But the taxes and fees make my usage more like $.18 per kWh already. No one is debating how the gov is going to fill both their pockets at once with increased pricing and doubled tax revenue .