2021/22 BUSINESS PLAN - April 2021 - NB Power
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2021/22 BUSINESS PLAN April 2021
TABLE OF CONTENTS About NB Power ................................................................................................................................................. 1 Mandate ........................................................................................................................................................... 1 Our Plan ............................................................................................................................................................... 3 Strategic Excellence Areas................................................................................................................................. 5 Safety Excellence ............................................................................................................................................ 6 Customer Excellence ...................................................................................................................................... 7 Organizational Excellence ............................................................................................................................. 8 Reliability Excellence ...................................................................................................................................... 9 Environmental Excellence ........................................................................................................................... 11 Attachment A – Measure Definitions ............................................................................................................. 12 Attachment B – Financial Highlights .............................................................................................................. 13 NB Power’s 2021/22 Business Plan has been prepared by management and reviewed and approved by the New Brunswick Power Corporation Board of Directors.
ABOUT NB POWER
NB Power is the largest electric utility in Atlantic Canada and is responsible for the generation,
transmission and distribution of electricity throughout New Brunswick. Our more than 2,500 employees
across New Brunswick are dedicated to providing safe, reliable and economically sustainable service to
our more than 400,000 direct and indirect customers in New Brunswick.
The Electricity Act gives NB Power the authority to sell electricity within the province, and to manage
and operate NB Power’s resources and facilities for the supply, transmission and distribution of
electricity within New Brunswick. The Act also establishes that, to the extent practicable, rates charged
by NB Power shall be maintained as low as possible, and changes in rates shall be stable and predictable
from year to year. Our rates are regulated by the New Brunswick Energy and Utilities Board.
As a provincial Crown Corporation, the Province of New Brunswick is the owner and sole shareholder of
NB Power. NB Power reports to the Shareholder through the Minister of Natural Resources and Energy
Development and the Shareholder’s expectations are expressed through legislation, policies and a
mandate letter. NB Power’s most recent mandate letter from the Minister calls for focus on the
following priorities.
Mandate
COVID-19
Like most organizations, COVID-19 has had a significant impact on NB Power’s operations and its
customers. As the supplier of an essential service to all New Brunswickers, NB Power continues to
maintain an updated operational plan which meets Public Health, Safety and other applicable
Government requirements. In addition to safeguarding the health of employees and the public, these
plans ensure critical infrastructure and essential services are maintained as a top priority. This is
managed at an operational level through internal emergency preparedness processes.
Climate Change
The transition to a lower carbon economy is an essential priority for NB Power. Therefore, NB Power is
focused on several initiatives developed to lower its carbon footprint while keeping rates affordable.
Net Metering and Embedded Generation
NB Power remains committed to the net metering and embedded generation programs. This includes
continued investments in testing options for customers through the Smart Grid Atlantic Projects. The
embedded generation program is currently fully subscribed and under review by NB Power.
Reducing our Carbon Footprint
Another important area of focus is reducing NB Power’s carbon footprint. This is achieved through
internal reductions of energy usage, continued diversification and optimization of our generation
through additional non-emitting sources and an equivalency agreement with the federal government. In
addition, NB Power is exploring evolving and alternative non-emitting generation and technology
options of the future such as small modular reactors.
1 of 13Energy Efficiency
NB Power also continues to mature service offerings aimed at reducing the demand for energy and
provide savings to customers. These services are available for all classes of customers and for all fuel
types used in the province.
First Nations
NB Power believes in building long-term, mutually beneficial working relationships with our surrounding
First Nations communities based on a foundation of respect, inclusion and responsiveness. Maintaining
regular consultation with First Nations as a recognized Rights Holder in New Brunswick is a standard
process within NB Power. This includes proactive consultation as part of major project planning and
execution as well as to enable energy related development programs such as the Locally Owned
Renewable Energy Projects that are Small Scale Program. In addition, NB Power looks to provide specific
opportunities in First Nations employment and procurement.
Debt Reduction
NB Power remains committed to meeting its mandate to achieve a capital structure of at least 20 per
cent equity by 2027. This Business Plan has been developed to reflect that commitment through cost
reductions, and rationalization and prioritization of capital investment requirements. These actions have
been balanced with ensuring NB Power continues to deliver safe, reliable and affordable electricity and
services to our customers.
Community Collaboration
NB Power actively works with communities throughout the province to meet energy related needs and
support economic development in the province. This includes partnering in the build of the first smart
community and testing advanced smart grid solutions. This also includes working collaboratively to
understand community unique needs, build capacity and advise or develop energy solutions.
New Business Development
The energy industry continues to change at an accelerated rate. NB Power recognizes these changes
come with opportunities that can support its vision of sustainable energy for future generations. NB
Power provides regular updates to the Shareholder on these opportunities via face-to-face meetings
and/or briefing notes to ensure alignment and support. An example of a new business development
opportunity actively being explored would be small modular reactors.
New Brunswick Energy Marketing
New Brunswick Energy Marketing continues to be active in the business of importing and exporting
electricity and related products and services to keep rates low in New Brunswick. It remains focused on
preserving existing customers while exploring opportunities to expand in other evolving energy related
markets.
2 of 13OUR PLAN
The COVID-19 Pandemic has had a significant impact on NB Power, the Province of New Brunswick and
countries around the world. As a critical service provider, NB Power plays an essential role as part of the
province’s pandemic response. In support of our customers during this very challenging time, NB Power
has been focused on
• delivering critical customer services and meeting essential customer needs while adhering to all
health and safety guidelines
• offering flexible bill payment arrangements and rate relief in recognition of the toll the
pandemic has had on the economy
• ensuring safe and reliable infrastructure for our health care system, businesses and all our
customers
NB Power’s commitment to support New Brunswick through this pandemic has led to the
postponement and delay of other longer-term objectives. Although NB Power remains committed to
supporting its customers to the end of this challenging crisis it also recognizes the need to resume focus
on other mid to longer term priorities. COVID-19 has reinforced that planning in uncertain times adds
significant complexity and requires NB Power to remain agile in order to ensure essential services to our
customers in a financially responsible manner.
NB Power’s 2021/22 plan has been developed with three longer-term strategic objectives including
focusing on reducing debt to improve the financial health of the organization, advancing the
modernization of the grid and supporting the transition to a low-carbon economy. In doing so, NB Power
must continue to put customers at the center of everything it does and ensure the utility is responsive to
customers’ changing expectations.
In the development of this plan, NB Power has made every effort to reduce controllable costs,
rationalize capital investment requirements and minimize upward rate pressure while targeting critical
debt reduction opportunities.
NB Power will develop and implement strategies to meet financial targets recognizing increasing cost
pressures due to climate change impacts (increasing storms, lower hydro flows, carbon pricing), rising
fuel costs, pandemic related economic challenges and emerging advancements in the industry. NB
Power’s target is to achieve a debt/equity ratio of 80/20 by 2027.
Also critical to New Brunswick’s energy future is a modern grid that is multi-directional and capable of
accommodating connected renewable energy resources such as solar and wind. Improvements such as
Advance Metering Infrastructure (AMI) and the Smart Grid Atlantic projects will provide increased
options, real-time information for customers and help manage the impacts on local and regional power
quality. NB Power also needs to prepare to adopt flexible strategies such as demand response and
battery storage to offset variability instead of using fossil fueled power plants to steady the power grid.
AMI will enable two-way communication between customers’ meters and NB Power. This technology
will provide customers with near real-time information on their energy use; empowering customers to
understand how and when they are using electricity and allowing them to make behavioural changes to
lower their overall usage. This technology will also enable customers to leverage Distributed Energy
3 of 13Resources, generate and store their own energy and support our efforts to reduce and shift electricity
demand. Smart meter installation will begin in winter 2022 and conclude in early 2024.
The Smart Grid Atlantic (SGA) project is a four-year federally funded research, development, and
deployment initiative aimed at helping Atlantic Canada move to a smarter, cleaner grid. New Brunswick
has three community projects that will help NB Power better understand how customers can best use
energy in the future, reduce their energy bills, and help the region reduce emissions.
Mitigating the impacts of climate change is a key area of focus for all utilities. NB Power maintains a
robust and diverse energy system that is 80 per cent non-emitting. Continuing to reduce New
Brunswick’s carbon footprint, while maintaining an infrastructure which is able to withstand the impacts
of severe weather and adopting emerging technologies will shape the future of energy in the Province.
Like the telecom industry, the energy sector is experiencing unprecedented disruption which increases
the complexity to remain safe, cost efficient and responsive to customer needs. Anticipating and
meeting customer expectations must be at the center of everything we do at NB Power. This includes
leveraging new technologies, products and services to enhance our customers’ experience and increase
value.
Effective risk management is a necessity and integral part of good business practices. NB Power
manages its risks through systematic, proactive and integrated processes to identify, understand,
manage and communicate risks that may impact NB Power’s ability to achieve its strategic objectives.
NB Power’s risks are managed through an Enterprise Risk Management (ERM) Program. Corporate
strategy and goals serve as the foundation of all risk management activities and as part of the planning
process the Board of Directors sets the overall risk appetite and tolerances for the Corporation. The ERM
process employs a consistent methodology across the organization that results in a comprehensive view
of risk that is regularly reported to management and the Board. By embedding risk management
techniques in day-to-day operations, NB Power is better equipped to identify risks affecting its goals and
to manage risks in ways that are consistent with the company strategy.
This Business Plan represents a one-year view of the key initiatives and targets needed to achieve the
strategic objectives of NB Power and address identified risks. The five areas of strategic excellence
provide a reporting framework that incorporates all aspects of our business including legislative
requirements, regulations, our Shareholder expectations, and direction provided by our Board of
Directors.
4 of 13STRATEGIC EXCELLENCE AREAS
Our areas of strategic excellence are Safety, Customer, Organizational, Reliability and Environmental
(SCORE). Whether the efforts are in innovation or continuous improvement, within Nuclear, Generation,
Transmission, Distribution, Customer Service or Corporate Services, all align to support progress in our
excellence areas.
Enterprise key performance indicators have been established as part of this Plan to reflect key areas of
focus and performance. In each of NB Power’s excellence areas, management is focused on determining
the goals, initiatives, processes, measures and attributes required to pursue excellence based on
relevant internal or (where applicable) external industry performance comparisons.
Key goals, measures and targets are set in each excellence area. NB Power will continue to measure and
report performance against targets.
2021/22 Best Practice/
Key Performance Indicators
Target Top Quartile
Safety Excellence
Total Recordable Incident Frequency 0 0.69
Customer Excellence
Customer Satisfaction Score ≥705 ≥716
Organizational Excellence ($ millions)
Operating Earnings $277 Unique to NBP
Cash Available To Pay Down Debt $72 Unique to NBP
Net Capital Expenditures $334 Unique to NBP
Operations, Maintenance and Administration (OM&A) $521 Unique to NBP
Reliability Excellence Nuclear
Nuclear Equipment Reliability Index ≥80 (Rev. 4) 90 (Rev. 4)
Nuclear Capacity Factor (%) 96.0 90.7
Reliability Excellence Operations
Generation Equivalent Availability (%) 81.6 79.8
Bayside Capacity Factor (%) 34.6 TBD
System Average Interruption Frequency Index (SAIFI) 2.15 1.79
System Average Duration Frequency (SAIDI) 5.40 2.69
Environmental Excellence
% Generation Non Emitting 82.1 Unique to NBP
In-Province Energy Reduction (GWh) 47 Unique to NBP
The following section will highlight each of the excellence areas, with details about the associated key
initiatives planned for the 2021/22 fiscal year. Attachment A contains Measure Definitions.
5 of 13Safety Excellence
Keeping employees safe has taken on new meaning as a result of the pandemic. New distractions, new
ways of working and the widespread impact of COVID-19 has affected employees both at work and at
home. Our commitment to support the physical, mental, work and life aspects of health is more critical
than ever. Our Total Health Strategy remains focused on reducing preventable illness, the risk for
accidents and injury, containing health care costs and building resiliency in our workforce. Our relentless
focus on safety extends to ensuring the wellbeing of our contractors and the public.
2021/22 Best Practice/
Targeta Top Quartile
Total Recordable Incident Frequency a 0 0.69
2021/22 Strategic Initiatives
• Strengthen our safety culture, prevent accidents and reduce safety risks. Focus will be on improving
the investigation of high potential incidents to help prevent future occurrences and utilizing the
results of a recent safety culture survey to develop targeted improvements including working
directly in the field to remove barriers and better plan safety into all aspects of the work.
• Increase mental wellbeing by building employee resiliency. Many companies are facing significant
increases in mental health and mental illness related challenges. NB Power will provide specific
training and programs to employees to help improve coping skills.
• Enhance contractor safety through focused training, improved supervisory oversight and improved
screening and validation of qualifications with vendors. This year changes have been made to
Contractor Safety Management to more clearly outline oversight requirements. Time will be
invested by divisions on improving accountability at all levels of supervision for contractor safety.
• Enhance physical and cyber security by implementing processes and tools to proactively identify
and mitigate risks. This includes upgrades to tools used to identify issues or tampering with NB
Power equipment.
a
The target for Total Recordable Incident Frequency is a stretch goal recognizing NB Power’s aspirational vision and efforts to
prevent all injuries and accidents.
6 of 13Customer Excellence
Customer Excellence means putting the customer experience at the center of everything we do. NB
Power is committed to being “easy to do business with” and working with our customers to find the
energy solutions that work best for them.
2021/22 Best Practice/
Target Top Quartile
Customer Satisfaction Score ≥705 ≥716 a
2021/22 Strategic Initiatives
• Be trusted energy advisors. Helping all customer segments and communities meet their energy
needs efficiently and sustainably. NB Power will work collaboratively with stakeholders across the
province to understand their needs, build capacity and advise on, or develop, energy solutions for a
greener, cleaner future.
• Progress the implementation of Advanced Metering Infrastructure (AMI/Smart Meters) needed to
facilitate the installation of meters beginning in the winter of 2022 and enable the benefits for
customers and grid management.
• Make it easier for customers to do business with us. This includes adding more self-serve options so
customers can engage 24/7, improving proactive communications around the status of complex
work orders, establishing customer-driven notification options and optimizing energy efficiency
program delivery with new and simple offerings.
• Partner in building smart communities and testing smart grid solutions via the Smart Grid Atlantic
(SGA) project. The three community projects will help NB Power better understand how customers
can best use energy in the future, reduce their energy bills, and help the region reduce emissions.
a
Based on JD Power 2019 study
7 of 13Organizational Excellence
Organizational Excellence focuses on establishing the long-term financial health of NB Power. Debt
reduction is the most critical focus area and will involve utilizing best practice information to complete
internal improvements and utilizing new technologies to improve productivity, reduce costs and
increase value for customers. This area also includes enabling initiatives which help the business achieve
results in all areas.
2021/22 Best Practice/
($ millions)
Target a Top Quartile
Operating Earnings $277 Unique to NBP
Cash Available To Pay Down Debt $72 Unique to NBP
Net Capital Expenditures $334 Unique to NBP
Operations, Maintenance and Administration (OM&A) $521 Unique to NBP
2021/22 Strategic Initiatives
• Develop and implement strategies to increase NB Power’s ability to meet financial targets through
improvements in investment governance, financial forecasting and determining new streams of
revenue.
• Reduce costs by streamlining and grouping supply chain requirements, joint utility material
purchasing and improved inventory management.
• Enhance decision making and reduce costs through the use of data and continuous improvement.
This includes finding ways to maximize the value of assets and equipment maintenance programs
and increasing efficiency in the field.
• Sustain efficiencies gained during the pandemic and implement additional tools and new ways of
working in a more digital based environment.
• Execute workforce and succession planning activities to ensure required knowledge and skills are
maintained to support high performance operations and meet business objectives.
Attachment B contains Business Plan 2021/22 Financial Highlights.
a
Financial targets are based on meeting approved budgets established by the NB Power Board.
8 of 13Reliability Excellence
Nuclear Excellence
Improving and sustaining the reliability of Point Lepreau Nuclear Generating Station (PLNGS) continues
to be a key area of focus. Significant capital and OM&A investment in our nuclear station reflects the
unique and critical role that safe and reliable operation at PLNGS plays in providing value to our
customers.
2021/22 Best Practice/
Target Top Quartile
Nuclear Equipment Reliability Index ≥80 (Rev. 4) 90 (Rev. 4)
Nuclear Capacity Factor (%) 96.0 98.0
2021/22 Strategic Initiatives
• Implement 250 prevention action cards to reduce costs and help bridge the gap to top decile
performance by engaging all Nuclear employees.
• Improve Equipment Reliability using an industry standard approach to preventive maintenance,
ongoing investments in equipment improvements, upgrades and replacements through our capital
program to allow transition to a 24-month outage cycle. Continue to reduce maintenance backlogs
with a specific focus on deficient critical orders and leaks.
• Develop life cycle management plans for all critical equipment to the end of plant life. Integrate
those activities in the station’s plant life capital plan and maintenance strategies.
• Execute the obsolescence and critical spares initiative to re-establish an accurate and robust critical
spare parts inventory for improved safety and reliability.
9 of 13Operations (Generation, Transmission and Distribution) Excellence
NB Power operates and maintains a diverse generation, transmission and distribution infrastructure. In
order to sustain high levels of performance NB Power needs to regularly and strategically invest in
infrastructure.
2021/22 Best Practice/
Target Top Quartile
Generation Equivalent Availability (%) 81.6 79.8
Bayside Capacity Factor (%) 34.6 TBD
System Average Interruption Frequency Index (SAIFI) 2.15 1.79
System Average Duration Frequency (SAIDI) 5.40 2.69
2021/22 Strategic Initiatives
• Execute planned equipment upgrades and maintenance outages within the Generation fleet to
sustain high levels of reliability.
• Progress the modernization of the distribution system by upgrading infrastructure and needed
operational technologies to provide the Energy Control Center with improved grid visibility and
control, including better management of Distributed Energy Resources.
• Progress the transmission rebuild and vegetation management programs to improve reliability.
10 of 13Environmental Excellence
Environmental Excellence focuses on NB Power’s response to climate change. This includes efforts to
strengthen infrastructure to sustain high levels of reliability, reducing our own carbon footprint through
energy and emission reductions and pursuing new ways to economically and environmentally balance
generation sources. It also reflects our commitment to realizing energy efficiencies through products,
services and process improvements both internally and for our customers. Targets will include short,
medium and long-term actions to ensure sustainable operations for future generations.
2021/22 Best Practice/
Target Top Quartile
% Generation Non Emitting 82.1 Unique to NBP
In-Province Energy Reduction (GWh) 47 Unique to NBP
2021/22 Strategic Initiatives
• Progress the life achievement plan to operate Mactaquac to approximately 2068 by finalizing the
scope of work and preparing for the regulatory process.
• Continue to work with; and support the New Brunswick Small Modular Reactor (SMR) vendors, in
the development of their advanced SMR Technologies. This includes progressing pre-project
activities that support the potential siting of SMR demonstration units at the Point Lepreau Nuclear
Generating Station site.
• Work with Federal and Provincial governments to gain clarity and certainty on how NB Power will
support New Brunswick’s carbon plan. Help New Brunswickers transition to a low carbon economy
by providing accessible energy efficiency and energy management programs and services.
• Reduce our internal energy consumption through the optimization of generating stations and other
facilities. Product offerings such as LED lighting (target of 100% within rented light fixtures by
March 2022) and Eco‐Peak domestic hot water heaters, leveraging as a distributed energy
resource.
• Progress the replacement of equipment containing greater than 50 ppm of Polychlorinated
biphenyls (PCBs) as part of our strategy to meet Environment Canada Regulations by the
compliance date of December 31, 2025. NB Power has set an internal target of December 31, 2024
to be compliant.
11 of 13ATTACHMENT A – MEASURE DEFINITIONS
Key Performance Indicator Definition
Safety Excellence
Total Recordable Incident Frequency Number of Fatalities + Number of Lost-Time Injuries + Number of
Medical Aids + Loss of consciousness + Restricted work + First aid
x 200,000/ Exposure Hours
Customer Excellence
Customer Satisfaction Score Residential Customer Satisfaction Index. North East Category. The
index measures the following factors: power quality & reliability,
price, billing & payment, corporate citizenship, communications,
customer service.
Organizational Excellence
Operating Earnings Revenue less fuel and purchased power, OM&A, depreciation and
amortization and taxes
Cash Available to Pay Down Debt Amount of money available to pay down NB Power’s debt once other
financial costs and obligations have been met
Net Capital expenditures Amount of money spent on capital investments
OM&A Total operations, maintenance and administration spending
Reliability Excellence
Nuclear Equipment Reliability Index Index which uses a composite of 16 key Sub-Indicators that have a
weighted value to add up to 100 as the highest score.
Each Sub-Indicator has a number value and color assignment that
reflects overall station performance for the key aspects of the AP-913
equipment reliability process model.
Nuclear Capacity Factor (%) The ratio of the energy which the power reactor unit has produced
over a specific period divided by the energy it would have produced
at its reference power capacity over that period
Generation Equivalent Availability (%) The equivalent percentage of hours that a unit is available to
generate at its maximum capability
Bayside Capacity Factor (%) The ratio of the energy which the unit has produced over a specific
period divided by the energy it would have produced at its reference
power capacity over that period
System Average Interruption Frequency Average Number of Interruptions in power (based on three-year
Index (SAIFI) average 2018-20)
System Average Interruption Duration Average number of hours customers were without power (based on
Index (SAIDI) three-year average 2018-20)
Environmental Excellence
% Generation Non Emitting Total of all non-emitting generation and purchases as a percentage of
In-province load
In Province Energy Reduction (GWh ) In-Province Energy is the total energy consumed within New
Brunswick (except Perth-Andover) in a given fiscal year. It is inclusive
of losses.
12 of 13ATTACHMENT B – FINANCIAL HIGHLIGHTS
Financial Highlights
($ millions)
Budget
Fiscal Year Ending March 31 2021/22
(1) In-province revenue 1,461
(2) Out-of-province revenue 297
(3) Fuel & purchased power expense 656
(4) Gross margin 1,102
(5) Miscellaneous revenue 75
(6) Operation, maintenance & administration 521
(7) Depreciation and amortization 330
(8) Taxes 50
(9) Operating earnings 277
(10) Finance charges & other income (238)
(11) Mark-to-market of fair value through profit and loss investments 42
(12) Net earnings before adjustments in regulatory balances 80
(13) Net changes in regulatory balances (13)
(14) Net earnings (loss) 68
(15) Capital expenditures (net) 334
(16) Net debt 4,802
(17) Change in net debt (77)
(18) % Debt in capital structure 92%
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