NB Power may be forced to pay customers to drop electric heat

NB Power may soon be required to offer residential customers an incentive to stop using electric heat, even though NB Power executives have been openly opposed to the idea.

The Energy and Utilities Board quietly directed NB Power last week to develop what it called a "multi-fuel energy efficiency strategy" by late 2017.

The order will likely force the utility to offer incentives to its own customers to abandon electric heat for alternative fuels, such as natural gas.

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Enbridge Gas New Brunswick pushed for the idea at NB Power's last rate hearing.

Gilles Volp, the natural gas company's general manager, said NB Power's own studies show that supplying winter heat costs more money than it generates.

He said he does not comprehend why the utility opposes the loss of winter heat customers to help fix that problem.

"We don't understand it why they're not focused on significantly reducing the demand from electric space heating," said Volp.

"It's a mystery to us."

NB Power has been investing millions of dollars trying to reduce the problem it has with major surges in power demand during cold winter days.

It has been working on an ambitious "reduce and shift demand" program that will eventually allow it to temporarily interrupt power going to appliances, such as water heaters and refrigerators, to smooth out consumption patterns.

Last year, the Crown corporation offered cash incentives for people to install high efficiency and lower consumption heat pumps.

It also ran a "beat the peak" promotion trying to get consumers to reduce their own consumption of electricity during peak winter periods.

EUB chair asked about program

Keith Cronkhite, NB Power's vice-president for business development and generation, dismissed the idea of encouraging or paying for electric heat customers to switch to other fuels when he was pressed at rate hearings last spring by Raymond Gorman, the EUB's chairman.

Cronkhite said that might be too successful and he pointed out the utility has power plants that it built to service a big winter load that it still needs to pay for.

"We have infrastructure in place today that requires a certain level of revenue obviously to sustain that," said Cronkhite

"A concerted effort to move away from existing baseboard that is in the home today could be a challenge."

Gorman followed up, saying that the utility's hesitance was "because there is a revenue reduction that causes a problem?""

"That is correct," said Cronkhite.

Utility studying EUB report

Volp said NB Power's reluctance to aggressively reduce its number of winter heat customers is contrary to its new role as New Brunswick's energy efficiency agency

Two years ago, NB Power was put in charge of provincial energy efficiency programs by the provincial government.

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Those programs used to include financial incentives for homeowners to move away from electric heat in favour of other fuels, but those no longer exist.

Deborah Nobes, a NB Power spokeswoman, said the utility has no immediate response to the ruling.

"We are analyzing the decision of the EUB and will of course comply. We will provide a more formal response to thisand to the other directives in the decision in our next application to the board," said Nobes in an email to CBC News

About 60 per cent of New Brunswick homes rely on electric heat, one of the highest levels in North America achieved because of earlier government incentives.

More than 26,000 provincial homes switched to electric heat in the early 1980s financed largely by a federal government program aimed at reducing Canada's dependence on imported oil.