Power now, pay later: Muskrat Falls generating station complete
CBC
All four generating units from Muskrat Falls are now ready for service and will supplement existing power sources in Newfoundland and Labrador this winter, says Newfoundland and Labrador Hydro.
At a media briefing Monday, N.L. Hydro CEO Jennifer Williams said the news is a significant step toward the final completion of the delayed and over-budget Muskrat Falls project.
Now that Muskrat Falls power is available through the Labrador-Island Link, the company will spend less on fuel for the Holyrood power plant, which will remain in service while the link is in testing.
The link is a high-voltage, 1,100-kilometre DC transmission line from Muskrat Falls in central Labrador, site of the 824-megawatt power-generating station, to Soldiers Pond on the Avalon Peninsula.
During a technical briefing, representatives from N.L. Hydro said the province gets about 30 per cent of its power from the Holyrood power plant, and about $200 million is typically spent on fuel annually, depending on the price of oil.
When running at its peak during winter, the plant burns about 18,000 barrels of oil daily.
The power coming from Muskrat Falls will be able to replace about two-thirds of the power coming from Holyrood, said N.L. Hydro.
According to Williams. customers will not see an increase in their bills until the rate mitigation deal between the provincial and federal governments has been finalized — and rates will not double. She said prices will go up later in 2022, but couldn't give a precise time frame.
She said N.L. Hydro has applied for a deferral account with the Public Utilities Board that will capture costs and savings that will be dispensed when the rate mitigation deal is done.
"We're very conscious of the costs," Williams said.
Until rate mitigation kicks in, N.L. Hydro plans to pay for the $34 million monthly Muskrat Falls mortgage through savings on oil for the Holyrood plant, funds from operations and borrowing.
N.L. Hydro representatives said while the link is being tested this winter, customers can expect some power outages of about 10 to 20 minutes.
"We have to test the new assets more and more at higher and higher power levels," Williams said.
The peak capacity of the link will be 900 megawatts, but is currently at 330 megawatts while the company works with an interim version of the software, Williams said. The company plans to increase the power to 400 megawatts over the first quarter of 2022.
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