NOTE TO HYDRO CEO: THOSE “GROWING PAINS” MIGHT BE YOURS

The new Hydro President, Jennifer
Williams, is either threading very softly with a Furey Government afraid of
taking decisions or has already succumbed to Nalcor’s long established culture
of deception.

Because Ms. Williams is still new,
we can only hope that her comments to CBC last week are matters of misspeak rather than signs of an evolving attitude. There is good reason to be concerned.

CEO Williams suggested to CBC that it is common for new utility infrastructure to experience “growing pains”.

The comment left the impression that those “growing pains” include the major problems currently plaguing the Muskrat Falls project, which are limiting production to around a third of capacity. After spending nearly $15 billion and years behind schedule, growing pains should constitute only the minor problems identified in a punch list audit during commissioning.

Hydro CEO Jennifer Williams

“Growing pains” do NOT include the 1100
kl. transmission line deliberately constructed  contrary to Canadian utility standards.

“Growing pains” do NOT describe the
sorry state of three new synchronous condensers at Soldier’s Pond where severe vibration issues are interfering with shaft rotation (known as “binding”), Nalcor having already acknowledged that the
“fix” by General Electric is not a long-term remedy.

And “growing pains” do NOT reflect the unresolved software problem going on since June 5, 2019 (according
to the Liberty Consulting Group) at a cost Ms. Williams would do well to
confirm.

For the purpose of this post, let’s
stick with the under-designed LIL. Why is it necessary to obscure the real
problem – after Nalcor’s refusal to adhere to the CAN/CSA regulations governing transmission
line standards at the design stage? 

As a Professional Engineer, does she not
share the public’s disgust at the decisions taken in the very office which she now
occupies, in defiance of the public interest? 

What has “growing pains” got to
do with professional standards anyway, the holy grail – ostensibly – of her profession?  

To this point, first, an NL Hydro 2011
Technical Note draws attention to CAN/CSA C22.3 No. 60826:06. This is an International
Standard; the design criteria of overhead transmission lines reflect “Canadian
deviations (which have) been approved as a National Standard of Canada.” The
following excerpt from p. 6 of the Hydro Technical Note will suffice:

In 2012 Nalcor planned to shutter the Holyrood
Thermal Generating Station, leaving the Island without a back up power source in the
event of an LIL failure. Hydro now plans to keep Holyrood open only until 2024
– though no alternative to Holyrood has been identified. This is the case
notwithstanding, I repeat, the requirements of Canadian utility standards.

Second, the standard described
in the excerpt (above) is largely the same as that which Manitoba Hydro International (MHI) recommended
to the PUB at the time of the DG-2 Reference.

Though
Nalcor adversely influenced other recommendations made by that consultant, in order to
smooth the path to project sanction, MHI did not change what it acknowledged as
a requirement for the LIL, when it acted for the PUB at DG-2. MHI correctly proposed
a far more robust return standard of 1:500 years in the absence of an alternate supply, and
the consultant went further, recommending “an even higher standard in the
alpine areas.”

Third,
the PUB made this observation in its Report on the DG-2 Reference: Nalcor…support(s)
a design standard for a critical component of the Island’s transmission
infrastructure, even though it has no experience with the transmission line
conditions in the alpine areas contemplated by the proposed route.”

Fourth, on the witness stand at the Muskrat Falls Inquiry Nalcor Project
Management Team member, Jason Kean, told Commissioner LeBlanc that “Nalcor had
an “intention” to move toward a higher reliability period as DG3 progressed.”
The Commissioner noted that the DG-3 estimate did not reflect “the cost of
these engineering upgrades.” Kean acknowledged the fact and attributed the
failure to “a disconnect internally.” 

Where, I might ask, do “growing pains” fit into
this narrative? Isn’t this a sordid tale of budgetary 
low-balling, of decit, and of “disconnects” of the irresponsible kind? Isn’t this about a CEO wishing that the horrid stuff would go away? 

In the same CBC story, Ms. Williams suggests “that the province has to strike the right balance between cost
and reliability”. In this context, she opines: “Do we
do some upgrades (to Holyrood)…Do we invest in actual backup, and if we do, do we back it up
fully?” All of these, she states, “are questions that we’re going
through with the regulator right now.”

At
the start, the questions are not legitimate if the outcome means a lower
standard of power security than those that meet regulatory requirements, or a standard less than that available to other Canadians. 

They
are not questions for Hydro/Nalcor anyway. 

To begin with, it is unconscionable to have the very same people engaged in issues of the Island’s power security who either participated in or paid lip service to the decision to build a substandard Labrador Island Link in the first place. 

On this point, Ms. Williams is exposing her ignorance over what occurred. The sanction decision made in 2012 did not constitute a choice between Muskrat Falls and Holyrood. That decision was pre-determined even if, at a regulatory level, the need for a back up source of power was never eliminated. In reality, Holyrood was done only away with in the framework of Nalcor’s manipulative and deceptive public communications, and in the telling to the Williams’ Government what they wanted to hear. Admittedly, a lot of very silly people bought into the absurdity.

CEO Jennifer Williams ought to know that the
stain of distrust earned under the leadership of CEO Ed Martin did not
disappear with the tepid executive changes introduced by CEO Stan Marshall.

Ms.
Williams has made some of her own, but she must do far more to restore the public’s
trust in the power utility. 

If
those decisions are not hers to make, she should leave as fast as she can, lest
she is tainted with her predecessors’ legacies, even if we should bear in mind it is Premier Furey’s decision that V-P Gilbert Bennett continues to occupy the executive office 

To this point, if Ms. Williams had even scantily read the Report of the Commission of
Inquiry, it might have occurred to her that Bennett and Project
Director, Paul Harrington did not fare well in the Commissioner’s appraisal of the management decisions taken in pursuit of the Muskrat Falls fiasco. 

Surely, she is not discussing the Holyrood Plant with them? 

If they have a different expectation, she should just shoo them away. 

Jennifer Williams is still new, but her public comments do cause us to wonder if she is ready for the job. Indeed, she may discover too late that the
“growing pains” to which she refers are found neither in the hardware nor the software needed to run Muskrat Falls, but
right in her own office.

Des Sullivan
Des Sullivan
St. John's, Newfoundland and Labrador, Canada Uncle Gnarley is hosted by Des Sullivan, of St. John's. He is a businessman engaged over three decades in real estate management and development companies and in retail. He is currently a Director of Dorset Investments Limited and Donovan Holdings Limited. During his early career he served as Executive Assistant to Premier's Frank D. Moores (1975-1979) and Brian Peckford (1979-1985). He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB). Uncle Gnarley appears on the masthead representing serious and unambiguous positions on NL politics and public policy. Uncle Gnarley is a fiscal conservative possessing distinctly liberal values and a non-partisan persusasion. Those values and opinions underlie this writer's views on NL's politics, economy and society. Uncle Gnarley publishes Monday mornings and more often when events warrant.

OPINION POLL OVER-RATES INEFFECTIVE TORY OPPOSITION

Having survived in spite of themselves, in Opposition the Tories have been lazy and uninspiring.  The fact that it is summer, and the House of Assembly is closed, admittedly makes their job tougher, except that the Party’s manifest weakness is not a seasonal problem.

REMEMBERING CABOT MARTIN (1944-2022)

He was an exceptional person. A gifted intellect for sure; irascible and argumentative, too. What endeared him to many was not just that he was analytical and insightful, but that he was honest and forthright. He was a public policy wonk; resource policy interested him most. He loved to travel and read; people, with something to say, were always important.

GNL RUSHING INTO ANOTHER “SCHEME”: CABOT MARTIN

I must say that after the Muskrat Falls fiasco, I thought our government had finally learnt its lesson and would not to rush into another such scheme where calling it “green” was enough to suspend all critical analysis.