https://www.cbc.ca/news/canada/new-brunswick/province-contaminated-sites-backlog-1.6667650
New Brunswick has backlog of 1,046 contaminated sites
Environment Department often misses steps in tracking, enforcing cleanups, audit finds
The Environment Department has failed to document, track or enforce timelines at the sites, most of which are contaminated with fuel oil, diesel or gasoline, according to a new report by the province's auditor general.
"If these issues continue to be unaddressed, there is a risk of contamination spreading, and potential harm to the environment and human health," Paul Martin writes in the audit he presented to the legislature's public accounts committee on Tuesday.
Martin says New Brunswick is the only province in Atlantic Canada with no legislation or regulation applying to its program for environmental cleanup of contamination.
In 86 per cent of cases examined by the auditor general, the lead engineer assigned to a site cleanup did not send a compliance letter within 15 days to whomever was responsible for the contamination, as the department's procedures require.
And 39 per cent of the cases had no compliance letter at all.
"Not sending a compliance letter could lead to delays in remediation of the contamination," the audit says.
The department couldn't explain the lack of letters in those files, it said.
Limited results
The 15-day timeline is critical because with oil and gasoline spills, the department believes contamination must be dealt with by the 30-day mark to prevent further spread into groundwater.
Of the 1,046 known contaminated sites in the province, 438 sites or 42 per cent had fuel oil or diesel contamination and 246 or 23.5 per cent had gasoline contamination. There were 18 listed as contaminated with a carcinogen.
Martin writes that the department launched a plan in 2020 to address the backlog of cases, but so far it hasn't led to results.
A map of contaminated sites in the province. (Auditor-General of New Brunswick)
The department is still working on listing sites, deciding which ones are priorities and figuring out the steps to clean up or "close" each file.
Of the 809 sites assessed and prioritized, 624 have been open files for more than a decade, and 76 date back to before 1990.
The department isn't even sure whether the oldest sites are still contaminated, "often due to a lack of documentation for older sites," the audit says.
The department told the auditor general's staff that it doesn't have enough employees to commit to shorter timelines while being able to maintain regular operations, such as processing permits and inspecting facilities.
"It goes to the point that successive governments have undervalued the regulatory role of the Department of Environment," said Green Party Leader David Coon.
"You watch the budgets over the years and the Department of Environment budget has not kept up with the regulatory responsibilities, with the workload they're faced with."
Coon said the figure of more than a thousand sites "completely surprised me. I had no idea that it was so large."
Bathurst
West-Beresford Liberal MLA René Legacy pointed to the former
Smurfit-Stone pulp and paper mill site in Bathurst, a so-called orphan
site that has yet to be cleaned up. (Jacques Poitras/CBC)
Bathurst West-Beresford Liberal MLA René Legacy pointed to the former Smurfit-Stone pulp and paper mill site in Bathurst, a so-called orphan site that has yet to be cleaned up.
The province, which may ultimately take ownership of the site, needs to take the initiative on such cleanups, Legacy said.
"There's a knowledge that it's in existence, but there's no action. … We need to be a lot more proactive. A thousand sites is an impressive amount."
According to Martin, department staff are also reluctant to send compliance letters to other government entities, "either because of a close working relationship between the two government entities, or because staff assume the government entity understands their remediation responsibilities."
In many cases they also did not document the progress of a file and missed steps in their standard operating procedures.
Sites that were closed or cleared often lacked site closure checklists that documented what had been done to clean them up.
Environment fund under scrutiny
The auditor general also audited the Environmental Trust Fund, a decades-old program that collects money from plastic bottle recycling fees and spends it on community projects for environmental conservation, education, protection, beautification and restoration.
Martin concluded the department is not effectively overseeing the program and has no long-term strategy or standardized approach to evaluate funding request.s
"The department could not demonstrate how over 30 years of funding has positively impacted the environment in the province," he writes.
The audit says the fund had a surplus of $41 million as of March 2022, despite turning down some projects and providing only a part of the requested funding for others.
Green Party Leader David Coon said successive governments have undervalued the regulatory role of the Department of Environment. (Jacques Poitras/CBC)
Without clear criteria, there's "no evidence-based rationale" for those decisions, Martin said.
Meanwhile, the auditor general's review of the province's overall finances says three consecutive large surpluses, including one projected this year, have improved New Brunswick's fiscal position.
But Martin warned MLAs that the flood of tax revenue — including a forecast of $373 million more in harmonized sales tax and $273 million more in personal and corporate income taxes this year — may be a short-lived phenomenon.
"The revenue this year may not be indicative of future results," he said.
Meanwhile, rising interest rates will likely mean a higher cost to servicing the public debt, given the province less financial leeway if it commits to more spending at the same time.
"Prudence is absolutely necessary here," Martin told the committee.
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'Exceedingly high' levels of E. coli detected in Belleisle Bay
At one site, E. coli levels were 1,000 times higher than those recorded in August.
Auditor general says utility failed to meet targets 'year after year'
CBC News · Posted: Feb 25, 2021 11:07 AM AT
One year later
Auditor general reproaches N.B. Power for financial barriers to energy efficiency
Report by Auditor General Paul Martin also questions high salaries for utility executives
Jacques Poitras · CBC News · Posted: Feb 24, 2022
Liberals and Greens say interfering with utility not the best way to help people
Jacques Poitras · CBC News · Posted: Oct 06, 2022 4:34 PM AT
Don't block N.B. Power rate hike, opposition parties tell government
Liberals and Greens say interfering with utility not the best way to help people
Both the Liberals and the Greens say interfering with how the Energy and Utilities Board rules on the 8.9 per cent increase would only perpetuate a history of politically motivated rate decisions.
Liberal energy critic Keith Chiasson said in the legislature the utility was "gouging" ratepayers and told reporters the government "has a role to play."
But party leader Susan Holt, speaking to reporters alongside Chiasson, was quick to add there's a downside to political intervention.
She said the government can't continue to "ruin the utility" by keeping rates artificially low, adding to its debt.
"Our worry is if they force another two per cent increase to N.B. Power, we're going to continue to destabilize our utility," she said.
"The debt is going to continue to grow. The operations won't be able to transition to the kind of green and renewable energy that New Brunswickers want to see from the utility."
Lori
Clark, acting N.B. Power CEO, said Wednesday the utility has taken
steps to ensure the rate increase is as low as it can possibly be. (Jacques Poitras/CBC)
She said the government must balance that with the fact the 8.9 per cent increase "is too large for many people to handle," and find a way to help.
N.B. Power filed the rate application with the Energy and Utilities Board on Wednesday.
It says it needs the increase to cover soaring fuel costs and other expenses subject to inflation, as well as recent interest rate increases.
But even the 8.9 per cent increase will only be enough to keep the utility financially afloat next year. It won't chip away at the corporation's accumulated $5 billion debt.
Previous governments have imposed small rate increases on the utility or have even stepped in to stop the EUB from approving rates considered too high.
The Higgs government says it won't do that and prefers to look for other ways to help consumers cope with the higher rates, such as energy efficiency programs to encourage people to consume less electricity.
"We have to find a way that the utility can get on a footing going forward," Premier Blaine Higgs said Thursday. "Let the EUB do the process. That's why we have it."
Higgs hinted on Wednesday a new energy efficiency program is coming. (Jacques Poitras/CBC)
Green Leader David Coon also agreed with that approach.
"We've seen too much of that in the past, and that is the kind of thing that has helped get us to the point where we are now, where N.B. Power is asking for 8.9 per cent."
But he said the province should offer more robust, "properly funded" energy efficiency programs. Higgs hinted on Wednesday a new program is coming.
Pay increases recommended
In a case of awkward political timing, N.B. Power announced its rate application the same week an independent commission submitted a report recommending pay increases for members of the legislature, cabinet ministers and the premier.
MLA salaries were frozen at $85,000 a year in 2008.
The commission recommended that the pay be raised to $93,150, the salary that would be in effect if governments had followed the advice of an earlier independent study to tie pay levels to increases in gross domestic product — essentially, economic growth.
Higgs said he hasn't read the new report, but pointed out that no one else has had their salary frozen for 14 years.
"Should that continue like that? No, I don't think it should continue like that. I think it should be comparable to what everyone else achieves," he said.
The commission is recommending future MLA pay raises be tied to increases for civil servants.
It also suggests the premier's salary be double that of an MLA and that people in other positions, such as cabinet ministers, have their member salaries topped up based on a formula.
The commission itself, made up of retired New Brunswick Court of Appeal justice Margaret Larlee and Moncton lawyer Robert Basque, acknowledged that implementing its recommendations would be controversial.
"The decision will be based on political judgment," wrote Larlee and Basque. "An increase for any reason will be criticized. There is never a good time for one."
This
is N.B. Power's biggest rate application since 2007, when it asked for a
9.6 per cent increase. That was later lowered to 6.4 per cent, and the
board eventually set the increase at 5.9 per cent. (Mike Heenan/CBC News file photo)
The government is not obligated to follow the commission's recommendation.
Holt did not take a clear position on the proposal, calling it "a tough one."
"I want every tool possible to recruit a great team, so I'm conflicted. On the one hand it will help me build a phenomenal team to represent New Brunswickers. On the other hand it's a really terrible thing to try and oversee your own pay increase."
Coon said he was against a pay increase, especially with New Brunswickers facing higher food, gas and housing prices along with a potential power rate increase.
"The optics would be terrible. We're comfortable in my caucus with the pay we're at right now."
Coon endorsed recommendations in the report to increase the budget MLAs use to pay constituency staff in their ridings.
The commission also recommended a study on whether it would be cheaper to buy MLAs electric vehicles rather than paying them for the mileage they put on their personal vehicles when travelling for their jobs.
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https://www.cbc.ca/news/canada/new-brunswick/new-brunswick-auditor-general-report-1.6362608
Auditor general reproaches N.B. Power for financial barriers to energy efficiency
Report by Auditor General Paul Martin also questions high salaries for utility executives
"Moderate-income households may have difficulty accessing NB Power's energy efficiency programs, due to lack of financing mechanisms," Paul Martin says in a report tabled at the legislature Thursday.
It faults the Department of Natural Resources and Energy Development for not requiring N.B. Power to create a loan program when it folded energy efficiency programs into the utility in 2015.
"Low-income households are really being left out if they cannot obtain that funding mechanism to even consider these programs," Martin said while presenting his report to the legislature's public accounts committee.
New Brunswick is one of only two provinces with no financing mechanism in its energy-efficiency programs. Residents must spend the money up front and then get a rebate for part of the amount.
Martin said N.B. Power doesn't need to be the organization providing the loans as long as they're available somehow.
"Being one of only two province not doing it — there must be a way," Martin said. "Almost everybody else is doing it, so why is this an issue?"
Financing mechanisms "are a widely used and a cost-effective tool to make energy efficiency more accessible to moderate and low-income households," says the report, Martin's first since becoming auditor general on Jan. 1.
It quotes N.B. Power replying that it doesn't have the funds to provide loans because of its focus on debt reduction. The utility also pointed out that the federal government announced a major loan program for energy retrofits in its budget last year.
N.B. Power spokesperson Marc Belliveau said in an email the utility's low income energy savings program provides free energy efficient upgrades to eligible homeowners and 466 homes were retrofitted last year.
"N.B. Power is looking at options to expand this program," he said.
The audit says people who don't heat with electricity aren't using the energy-efficiency programs at the same level and that N.B.Power doesn't believe it has to fund them.
New Brunswick's auditor-general Paul Martin says N.B. Power has the
highest average salary among Crown agencies. (Submitted by Office of the
Auditor General)
It also says the department hasn't given N.B.Power any energy efficiency targets and hasn't provided enough oversight of the program.
Martin's report calls for "a plan" to address the issue.
The utility says as part of its response in that it will conduct a "barrier study" by June 2023 looking at other provinces to come up with recommendations "to increase participation" by low- and middle-income households.
"You're asking for a plan and implementation, and you're going to get a study," Liberal MLA René Legacy told Martin.
"We would always like to see our recommendations addressed faster, and as fast as possible," Martin answered.
Highest executive salary
The report also includes a chapter on salaries at provincial Crown agencies that highlights N.B. Power CEO Keith Cronkhite's $560,000 salary as the highest among any head of a provincial Crown agency.
The utility also has the highest average salary among Crown agencies and is the only one to offer a generous "executive retirement supplement" to everyone in the position of vice-president or higher, like the one availabe to deputy ministers.
For employees earning $100,000 a year or more, the utility's salaries also rise at a faster rate than civil servants working for government departments.
N.B. Power President Keith Cronkhite's salary of $560,000 is the highest
of any at a Crown corporation in New Brunswick. (Roger Cosman/CBC
News)
The report recommends the government set out what it means when it says salaries in Part IV of the government, Crown agencies, should be consistent.
"A lack of clear expectations from government increases the risk of government intentions not being carried out," the report says.
"In our view, government should clearly define what it expects of Part IV Crown agencies with regards to non-bargaining salary and benefits practices."
Martin acknowledges N.B. Power and other Crown corporations don't work directly for the government and each organization is allowed to set its own policies.
But the audit says the province provides "some direction" through memoranda of understanding it issues to the Crown agencies every three year.
Executive retirement benefits
While executive salaries at N.B. Power are higher than normal, the utility has less generous health and dental benefits and lower travel expense allowances than other parts of the provincial public sector.
The report also looks at the New Brunswick Financial and Consumer Services Commission, the Research and Productivity Council, Opportunities New Brunswick, the two regional health authorities and others.
But N.B. Power is the only one to offer the executive retirement benefit to senior officials.
If they work for five years or more, senior executives get a retirement supplement of one per cent of their annual salary for every year worked, up to 10 per cent.
For example, an N.B. Power executive with an average salary of $200,000 per year over 10 years would get an additional $20,000 a year during retirement.
That's on top of the regular provincial pension under the New Brunswick Public Service Pension Plan.
Belliveau pointed out the report acknowledges that the utility sector "is a complex one" and N.B. Power has to offer "a competitive compensation package" to attract qualified executives.
He said the retirement supplement is designed to make up for higher salaries and bonus programs that other utilities offer and that N.B. Power doesn't have.
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Rest assured I saved ALL THE COMMENTS LONG AGO
NB Power's missed financial targets are longstanding issue, says Liberal leader
Auditor general says utility failed to meet targets 'year after year'
Melanson, a former finance minister, said that during his time in government it was sometimes difficult to deal with the Crown corporation.
"t was probably one of the most frustrating pieces, where on a yearly basis, when NB Power actually submitted their forecasts in terms of net income contribution to the provincial government, which impacts the provincial yearly budget," said Melanson, who held a variety of cabinet posts in the Brian Gallant government.
"They were never on target. They were always behind."
The auditor general's report was the topic of this week's New Brunswick Political Panel podcast, with a focus on what the report said about NB Power.
In her report, released on Tuesday, Auditor General Kim Adair-Macpherson said the utility failed to meet financial targets "year after year."
She said debt reduction is "not a top priority" for the utility and its liabilities constitute "the largest contingent risk to the province."
Melanson said the government needs to be serious about getting NB Power to focus on their financial situation.
Green Party Leader David Coon said the legislature's public accounts committee holds some responsibility for keeping the utility in check, but the Energy Act should be amended to give the Energy and Utilities Board the authority to approve the utility's 10-year plans and not just rate increases.
"Without that, you know, they've got one arm tied behind their back and you're not getting the accountability necessary," said Coon.
Adair-Macpherson questioned the business sense of keeping New Brunswick's electricity rates some of the lowest in Atlantic Canada.
Green
Party Leader David Coon, Liberal Leader Roger Melanson, and People's
Alliance Leader Kris Austin responded to the auditor general's report on
this week's political panel. (CBC)
"While maintaining a consistently low annual rate may be advantageous to NB Power consumers, it is likely contributing to its failure to meet the debt to equity target and ever-increasing debt level," said Adair-Macpherson.
Coon said the province should look at amending the Energy Act to deal with industry rates.
"Right now [the act allows] NB Power … to deliver power for less than their cost to heavy industry. So they're losing on revenues there," said Coon.
People's Alliance Leader Kris Austin said he believes the utility would benefit from narrowing its focus to providing electricity to customers.
"I've seen lately that NB Power seems to be branching out into other areas, such as, you know, investment in research and development, which I understand there has to be a certain element of," said Austin.
"You go back to, you know, things like Joi Scientific, where you see money literally just, you know, thrown down the drain here for these whimsical ideas."
The Progressive Conservatives were unable to provide someone to take part in the panel this week.
NB Power management at fault for missed debt targets, says auditor general
Debt reduction is "not a priority" at Crown corporation, said Kim Adair-Macpherson
"It is ultimately management's decision to reduce debt," said Adair-MacPherson, in a 65-page review of the utility she presented to MLAs on Tuesday.
NB Power ended the 2020 fiscal year with $4.9 billion in net debt, about $700 million higher than targets set for it by the Legislature in 2013. That's a concern, according to the auditor general, because the province guarantees what NB Power owes and significant new spending requirements are approaching.
"It's the largest contingent risk to the province," she told MLAs, about NB Power's liabilities.
Debt reduction, her report said, is "not a top priority" of utility management, who she said failed to meet financial targets "year after year" by engaging in "optimistic" and "inaccurate forecasting" of utility expenses.
The report notes how in 2016 the utility projected $549 million in profits for itself over the following four years in its planning but managed to achieve actual profits over the period of just $54 million, less than 10 per cent of what it had suggested.
Damaging storms, spotty performance by the Point Lepreau nuclear generating station, low hydro production during dry summers and other problems have all taken turns upsetting the utility's financial plans, but Adair-MacPherson said those risks need to be better accounted for in corporate planning.
An
ice storm that hit the Acadian Peninsula in 2017 downed dozens of power
lines and cost NB Power a record-setting $30 million in cleanup
expenses. (Jerome Luc Paulin/Twitter)
Reliability problem resurfaces at Point Lepreau nuclear plant
She also expressed concern about whether the utility will be able to significantly improve its finances before 2027, when up to $4 billion in major expenditures will be needed for a rebuild of the Mactaquac Dam and other projects.
"NB Power does not have a definitive plan to do this," she wrote about the need for significant short term debt reduction.
Although NB Power charges some of the lowest rates for electricity in Atlantic Canada, Adair-MacPherson questioned whether that makes business sense given its financial position.
"While maintaining a consistently low annual rate may be advantageous to NB Power consumers, it is likely contributing to its failure to meet the debt to equity target and ever-increasing debt level," she said.
Adair-MacPherson's report comes as NB Power is coping with yet another major unbudgeted cost, the unexpected breakdown of the Point Lepreau nuclear generating station last month.
The
Point Lepreau nuclear generating station appeared to have its
reliability issues resolved in the last two years, until the utility had
a surprise problem with its turbines in January. (Submitted by NB Power)
Turbine problems forced a shutdown of the plant in mid January and more than a month later it remains offline at an approximate cost to the utility of $1 million per day.
In its response to the report, NB Power defended its forecasting practices and expressed confidence it will get its debt level down to the required 80 per cent level by 2027. However, it also promised to do better budgeting for trouble.
"NB Power agrees to evaluate additional means to quantify the impact of significant future cost uncertainties outside management's control and to include this information in its planning process," said the utility's response.
Harsh words, disallowed expenses greet NB Power in rate increase decision
‘The utility must stop overspending,’ Energy and Utilities Board says
"The utility must stop overspending on items … that are within its control," wrote the board.
"It does not appear there has been any meaningful changes taken by NB Power in its approach to control costs or reduce debt. Only modest improvements have been seen on debt repayment."
In the decision released Friday, the EUB ordered NB Power's to recalculate its rate request after subtracting disallowed portions. That will likely lead to a 1.85 per cent power rate increase to customers, although potentially not until next spring.
"With these changes, NB Power is directed to provide the Board, for review, its calculation for a revised rate increase across all customer classes," wrote the Board in its 21-page decision.
NB Power originally applied to the EUB for a two per cent rate hike one year ago on Oct. 2, 2019. It was hoping to have the increase approved and in place for April 1, 2020.
Hearings were conducted last February, but on March 19, with a ruling imminent, the utility requested an indefinite suspension of the application in light of the COVID-19 pandemic.
Energy
and Utilities Board acting chairperson Francois Beaulieu led a
three-person panel reviewing NB Power's request for a rate increase back
in February. The decision finally came on Friday. (CBC)
"Many businesses are closed or at reduced operation for an unknown time frame and many employees of those businesses have been affected as a result," said then NB Power president Gaëtan Thomas in a letter to the EUB.
"NB Power has concluded that a rate increase implemented on April 1, 2020, would be counterproductive."
In August, NB Power finally asked the EUB to issue its decision but requested whatever increase it approved to be moved to March 31, 2021, to minimize disruption to the economy.
The EUB has not yet ruled on that request.
Although focused mostly on the current rate increase, the EUB also turned its attention to a string of poor financial results and missed debt reduction targets posted by NB Power over the last half-decade.
The utility lost $16 million in the last fiscal year, the fifth year in a row it has missed its own profit target, and the EUB called on the organization to look internally for solutions.
"NB Power must find a way to stay within its budget and reduce its costs," wrote the board.
The board did approve most of NB Power's budget request with exception of $1.1 million in inflated costs for buying electricity from the Pokeshaw wind farm in northeastern New Brunswick after NB Power negotiated lower prices than it included in its budget documents.
Maritime Iron study
The EUB also disallowed $300,000 the utility had earmarked to study the potential of integrating the proposed Maritime Iron development in Belledune with its nearby coal-fired generating station.
NB Power has since ceased its investigation of how it might help the Maritime Iron project, and the board said it heard nothing at hearings to justify the utility charging customers anything to investigate the feasibility of a development proposed by an outside party.
"This project is speculative. The Board is not satisfied as to the prudence of this spending," it wrote in its decision.
The disallowance by the EUB of $1.4 million budgeted for those two items in NB Power's budget was in addition to money NB Power itself dropped from its request early in proceedings.
At the start of hearings in February, utility executives, including new president Keith Cronkhite, declared $1.4 million in planned spending to support a hydrogen-from-seawater partnership with Florida-based Joi Scientific inappropriate to bill customers for and withdrew the amount from its budget.
Former
NB Power CEO Gaëtan Thomas, centre, with Joi Scientific executives
Robert Koeneman, left, and Traver Kennedy on a beach in Cape Canaveral,
Fla., promoting the company's hydrogen-from-seawater research. NB
Power's spending on that project and other items is being deducted from
its rate increase. (Joi Scientific)
Those three changes combined total $2.8 million and are all to be deducted from the original two per cent increase requested by the utility.
EUB board member John Herron wrote a dissenting opinion, arguing NB Power should be able to keep the rate increase portions tied to disallowed expenses to boost its bottom line, but that position was rejected by EUB acting chairperson Francois Beaulieu and board member Michael Costello, who made up the balance of the three-person panel.
The EUB will likely rule next week on when the rate increase will take effect, after NB Power recalculates the amount without the disallowed expenses.
Seemed kind of sneaky the sweet deal for a few big local outfits with everyone else stuck with high rates, though.
Also with all the ongoing high profile data breaches, there's other factors where trust will need to be rebuilt.
Trust has been lost for many very good reasons though. Nothing has changed either.
Why is it up to the EUB to reign these guys in?
Why is the government not fixing this disaster?
"[4] Members of the public were invited to submit letters of comment by January 31, 2020. The Board received 46 letters of comment with the vast majority expressing concerns about the proposed rate increase. The Board has reviewed these letters. During the hearing, NB Power was provided with the opportunity to respond to these concerns.”
The only letter in favour of a rate increase is from the unions. Please do not get me wrong, I certainly know the importance of unions. But with a median income of $30,000 a year in NB how can we justify incomes of over $100,000?
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