Ongoing Lepreau maintenance outage is 5th since 2018 to go over budget
N.B. Power told to get more 'realistic' about its nuclear planning and budgeting
It's the fifth planned outage at the station since 2018 to hit delays and go over its budget.
The recurring problem is one that an outside review blames largely on optimism inside N.B. Power that maintenance work at the station will go according to plan — despite years of experience showing it rarely does.
"We expect the station to reconnect to the grid later this week," wrote N.B. Power communications officer Dominique Couture in an email to CBC News about the current outage.
It began in mid-April and was originally budgeted to last 22 days with another five days of "contingency" time if unexpected issues arose during planned work.
As of Tuesday, the plant had been down for 39 days.
"Prior to reconnecting the station to the grid, it was identified that a mechanical seal on a pump was leaking and required replacement," wrote Couture.
"The additional outage time is to ensure that we perform this task safely and with quality including required testing and adjustments to ensure the Station is safely returned to service."
The shutdown was originally budgeted to cost $23 million. Although final costs won't be known for weeks, the price tag on delays is normally high.
Previous planned outages that dragged on longer than expected in 2018, 2019, 2020 and 2022 cost N.B. Power a combined $202 million more than expected, worsening its already fragile finances.
Utility's struggles linked to Lepreau maintenance problems
A recent Price Waterhouse Coopers Canada review of N.B. Power operations found planned maintenance outages at Lepreau that went poorly have been a key contributor to the utility's financial struggles.
It blamed much of that on rosy expectations inside N.B. Power that fixing issues at the plant will go better in the future than it has in the past.
Jason
Nouwens, N.B. Power’s director of regulatory and external affairs, told
the utility's rate hearing last winter that 'improvements need to be
made' in maintenance outages at Point Lepreau that have regularly been
going over budget. (Graham Thompson/CBC News)
"Outage plans are often developed based on the ideal state," said an early draft of the Price Waterhouse report that was entered at evidence at N.B. Power's recent rate hearing.
According to the consultants, the utility needs to stop using "best case data" to develop budgets and plans for Lepreau outages and instead "include more realistic inputs and contingencies."
Asked about the recommendation during the rate hearing, Jason Nouwens, the station's director of regulatory and external affairs said N.B. Power itself has been coming to a similar conclusion.
"We realize improvements need to be made," said Nouwens.
"Gaps in the area for improvement that have been identified aligned with ones that we had already previously identified."
Managers' projecions often overly optimistic
Michael Daniels, an assistant professor at the University of British Columbia's Sauder School of Business, said overly optimistic projections by managers involved in large projects is a common issue that has been studied extensively.
"It stems from this broader issue of what we call optimism bias," said Daniels.
Michael
Daniels is an assistant professor at the University of British
Columbia's Sauder School of Business. He said projects that routinely
go over budget and finish late are often planned by managers suffering
from 'optimism bias.' (Submitted by Michael Daniels)
He said research shows people generally "are quite overconfident in our own abilities" and tend to think about the "best-case scenarios" rather than realistic outcomes when tackling projects.
"We will underestimate costs, underestimate the amount of time it might take, we'll underestimate the degree of risk that there is," he said.
Lepreau has suffered more than 800 lost production days in planned and unplanned outage events since an extensive refurbishment of the facility ended in 2012. It's a cumulative amount of downtime N.B. Power originally projected would not be reached until at least 2034.
More recent estimates about the plant's future performance not been much better.
Daniels said from the outside seeing projects come in weeks late and millions overbudget on a regular basis might suggest the need for changes but that's not something always recognized by those involved.
"Our brains naturally pull from our memory examples where things went really well in the past and we tend to sort of downplay, subconsciously anyway, all the mistakes," said Daniels.
"It's our brain telling us, hey, this has gone well in the past, and sort of forgetting about all the times it hasn't."
ABOUT THE AUTHOR
Sell or privatize NB Power like our neighbours in Nova Scotia did.
Then we can enjoy 15% higher power rates like our neighbours in Nova Scotia do.
Option 2)
Stop the government meddling (impossible?) in the company.
End corporate (Irving!) subsidies for electricity.
Fiscally, it's been an embarrassment from day one.
Or it could be politics, everything NB government is involve in, fails.
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