U.S. consultant questions how well utility did its homework regarding biomass project
Nova Scotia Power Inc. hasn’t done its homework on its planned $208-million biomass energy project in Port Hawkesbury, says a U.S. renewable energy consultant.
"I have a number of material concerns regarding the due diligence and prudence employed by NSPI with regard to estimating the long-term capital and operating costs of the proposed project," said Barry Sheingold, of New Energy Opportunities Inc. in Massachusetts, in testimony Wednesday at a Utility and Review Board hearing in Halifax.
NSP plans to partner with NewPage Port Hawkesbury Corp., a subsidiary of Ohio-based NewPage Corp., on a biomass facility that would burn 650,000 tonnes of wood waste a year to generate enough electricity to power 50,000 homes and help the utility meet provincial renewable energy targets.
NSP would own the plant, which NewPage would operate.
Half of the waste wood would come from NewPage’s sawmill and papermaking operations.
The rest would be harvested, with half of that coming from Crown lands under a 25-year deal NewPage negotiated with the province.
Sheingold, who was certified as an expert witness after being questioned by NSP lawyer Dan Campbell on his familiarity with Canadian law and with Nova Scotia’s energy regulations, said the power company should have conducted a competitive bidding process for other renewable energy proposals, including wind, at least a year ago so that evaluation results would have been available to the board at the time the biomass application was filed.
"I would suggest that the board staff work with NSPI and an independent evaluator on an expedited basis to achieve an agreed upon scope of (independent evaluator) work with a timetable for delivery of the independent evaluation for filing in this proceeding and a process for review by interveners," he said.
Utility company officials declined to comment on Sheingold’s testimony, saying they would let the hearing process proceed.
Sheingold appeared as a witness for the provincial consumer advocate’s office.
Prior to his testimony, consumer advocate office lawyer Bill Mahody questioned a NewPage panel on the potential impact its parent’s $3-billion debt might have on the biomass project.
A September 2009 filing with the U.S. Securities and Exchange Commission tabled at the hearing disclosed that NewPage Port Hawkesbury was one of the guarantors of $1.7 billion in secured notes issued by NewPage Corp. to repay a term loan.
Chris Hooper, vice-president of operations with Cerberus Operating and Advisory Co., a NewPage affiliate, confirmed the $3-billion debt figure but said he wasn’t aware of any discussions with the utility about the potential impact of NewPage debt.
Power company spokeswoman Patty Faith said NewPage’s debt wouldn’t affect NewPage assets bought by the utility, which said earlier in the hearing that it would continue to operate the plant regardless of what happened to the paper company.
Bill Stewart, NewPage Port Hawkesbury’s director of woodlands and strategic initiatives, was also questioned about a letter sent to the board this week by Anthony Mee, owner of the Great Northern Timber Group of Companies, which has wood fibre processing operations in Liverpool and Sheet Harbour.
Mee said the biomass project would hurt his business, which has developed export sales for under-utilised hardwood and softwood fibre.
Stewart said he was surprised by the letter and called Mee on Wednesday to offer to meet with him to discus the supply issue.
Hearing testimony is scheduled to wrap up today. The board plans to travel to Port Hawkesbury on Friday to tour the proposed biomass plant site.
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