Utility may be forced to explain Orimulsion boondoggle

The Public Utilities Board now says it will hear legal arguments over whether the Orimulsion fiasco can be raised as an issue in NB Power's application for a $125 million a year rate increase.

Board chairman David Nicholson said he wants to hear more arguments on the Orimulsion issue before ruling on whether to allow its full introduction into NB Power's rate case.

• FROM FEB. 15, 2006: NB Power has too much freedom: PUB boss

Previously the board had ruled the subject to be out of order, but public intervenor Peter Hyslop says the multi-million dollar debacle is critical to deciding whether ratepayers should pick up the slack for NB Power's money problems.

"The board should take into consideration a blunder of NB Power's management and whether that should reflect on the determined rate," said Hyslop.

The Coleson Cove generating station, which was overhauled at a cost of nearly $1 billion to burn cheap Venezuelan fuel, is so expensive to operate it's used only as a last resort now by NB Power. Venezuela won't sell the fuel anymore, leaving NB Power to burn much more expensive Bunker C oil instead.

Although the station doesn't generate a lot of electricity, it is producing sparks down at the PUB, which is hearing arguments for and against NB Power's request to raise rates by an average of 11.6 per cent on April 1.

NB Power officials have long admitted the Orimulsion mixup is costing the corporation $100 million a year, and Hyslop wants those public admissions entered into evidence so he can argue the rate increase should be reduced by $100 million.

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NB Power lawyer Terry Morrison is fighting hard to keep Coleson Cove's problems out of the utility's rate hearings. But he says if the fiasco must be brought into the open, the hearings will have to be extended substantially.

"I would say this is most irregular and I would submit improper," said Morrison. "To have this thing brought up at this point is just unfair."

Hyslop says that's just too bad. "Now Mr. Morrison is here today saying, 'if I want to go down that road I better develop all kinds of evidence' so if that's the case, I would ask if he might want to open up his panel so we could go into how that blunder was made. If that's what he wants me to do I don't have a problem with that."