PUB rejects proposed $110M diesel generating station in southern Labrador

The Public Utilities Board has denied an application made by Newfoundland and Labrador Hydro to build a new regional diesel generating station and interconnection in southern Labrador.

In an update on Monday, the PUB wrote that Hydro "failed to demonstrate that the proposed project would result in power being delivered to customers at the lowest possible cost, in an environmentally responsible manner, consistent with reliable service."

The proposed plant, which would have operated in Port Hope Simpson, would power and interconnect six communities in the region. It would have replaced several existing small diesel plants.

In an emailed statement to CBC News, Hydro says its extensive and detailed analysis, beginning with its application in 2021, "justifies that the southern Labrador interconnection is the economically viable option for supplying communities with reliable power, that allows for the integration of renewable sources, and is repeatedly proven least-cost."

The company says the plan also meets Canada's clean energy regulations.

The final proposed cost of $110.9 million was far and beyond the initial $49.9 million stated in the original application in July 2021. Hydro estimated the project would be completed in 2029 in its most recent revision in December.

The generating station would have had a capacity of 6,300 kilowatts.

According to the PUB, the board has never rejected a generation project of this scale.

Community input

Residents of southern Labrador communities have been at odds with the idea of a new diesel generating plant since the plan was made public.

The PUB said in its decision that N.L. Hydro should satisfy its duty to consult with the NunatuKavut Community Council (NCC). 

The group intervened in the matter and raised concerns on the environmental impact of a diesel plant. 

"While it did not oppose conditional approval, the next stages of environmental assessment and engagement and fulfilment of the duty to consult and accommodate NCC were important for NCC's continued support," the PUB decision reads.

Arguments against the project reflect the push for green energy — as was the case in Mary's Harbour. 

According to the PUB, the town was of the mind that "all communities should receive clean, affordable energy. In the town's view, a regional diesel plant would prevent future growth in the area."

The town of St. Lewis also expressed interest in green energy projects, and called for more public consultation.

Charlottetown and Port Hope Simpson generally supported the approval of the project, and were pleased with the idea of using the plant to offset renewable energy when it wasn't efficient enough at a given time.

The NCC claims to represent about 6,000 self-identifying Inuit in southern Labrador. 

Inuit Tapiriit Kanatami — the national organization representing Inuit across Canada, including Inuit in northern Labrador — does not recognize NCC as an Indigenous group. Neither does the Nunatsiavut government nor the Innu Nation, who say NCC is a settler organization engaging in Inuit identity theft.

Next steps

Charlottetown's diesel generating station, which also served Pinsent's Arm, was destroyed by a fire in 2019. The towns rely on mobile generation.

"The continued use of mobile generation is not an acceptable long-term solution," the PUB wrote.

The board also said that N.L. Hydro should take immediate steps in ensuring safe and reliable access to power.

Hydro said it knows Monday's decision impacts customers, and will mean "reliance on mobile diesel until a solution is finalized."

The PUB said more "could and should be done by Hydro to ensure the development of alternatives" in southern Labrador, adding that the area has unused potential for renewable energy options. 

The board wrote that it did not reject the application lightly.

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