NB Power and NS Power continue joint efforts to find efficiencies and lower costs
Fredericton, NB/Halifax, NS – NB Power and NS Power are working together to explore new ways to reduce operating costs that will create long-term savings for the two utilities.
The utilities are exploring a regional approach to procurement and contracting. Joint purchasing would enable both NB Power and NS Power to advance their ongoing commitment to provide stable and predictable rates for customers by reducing operating costs.
The two utilities began working together in March 2015 on a joint dispatch pilot project that saw the two utilities jointly optimize their generation fleets for the first time. That experience generated new ideas and prompted the two utilities to consider exploring additional ways to lower costs on behalf of customers including a possible joint regional procurement approach to purchasing.
“At a time of year when the cost of heat and lighting is top of mind for our customers, we’re very pleased to announce this next step in our partnership with Nova Scotia Power to pursue additional cost savings that will help us keep customer rates low and stable over time,” said NB Power President and CEO Gaëtan Thomas. “While NB Power has already found nearly $50 million in our own cost savings since 2010, we’re committed to running our utility as lean as possible and that means we need to be innovative in our search for the additional cost reductions we’ve committed to over the next 5 years. Greater regional collaboration is our next best opportunity to achieve rate stability for our customers.”
Pursuing a potential joint procurement process would allow the utilities to leverage their combined purchasing needs and allow for lower prices with higher volumes being purchased. It will encourage innovation and adoption of best practices, and the sharing of information to improve the purchasing process. Just recently, the two utilities came together for the first time in a joint purchase of fuel (pet coke) that saved the utilities an estimated $250,000. Both utilities believe there are more opportunities like this one that could add up to bigger savings overall.
“Nova Scotia Power has been working hard to stabilize rates for customers. Our customers expect us to do everything possible to deliver affordable electricity and that means looking at every aspect of doing business,” said Bob Hanf, CEO of Nova Scotia Power. “Exploring the possibility of joint procurement is the next logical step in our efforts to build on the cooperative relationship between our two utilities. It provides a new avenue to keep costs under control as we explore creative ways to ensure predictable and affordable electricity prices for Nova Scotians.”
The joint dispatch project has already generated new ideas for partnering for joint savings as well. Since November, the utilities have been working collectively to share back-up generation, or reserve services. Both utilities are required to keep generation capability in reserve that can be brought on line quickly in case other generation suddenly becomes unavailable. In the past, the utilities often had to start up fast-acting generation to meet this reserve requirement. Working together, the utilities have created a new way to avoid the need for this generation by relying on each other’s reserve capabilities instead. In just 10 weeks of greater collaboration, the two companies have been able to avoid nearly 3 dozen generation start-ups.
In the coming months, the utilities will continue to work together to seek further opportunities for regional cooperation that will lower costs and keep customer rates stable in the long run.