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September 14, 2015

PUBLIC

ACCOUNTS COMMITTEE

The

Committee met at 2:00 p.m. in the House of Assembly Chamber.

CHAIR (Bennett):

Good afternoon, this is a

hearing of the Public Accounts Committee of the Province of Newfoundland and

Labrador, and I am the Chair. My

name is Jim Bennett; I am the Member of the House of Assembly for St. Barbe

district. On my left are my

Committee colleagues; on the right are witnesses.

Some of

the witnesses have not, as yet, been sworn, and some of them have, so our Clerk,

Ms Murphy, will swear the witnesses first, and then I am going to give my

colleagues an opportunity to say who they are.

We will go to our Auditor General for his background information, then we

will go to the department for background or information, and then we will start

our questioning.

Murphy has to attend to something which will take only a moment.

I am going to call on my colleagues to each introduce themselves,

starting with our Vice-Chair.

MR. K. PARSONS:

Good afternoon, everyone,

nice to have you here on this beautiful day so far, before the rain comes.

I would just like to welcome our members from the Department of Natural

Resources. I hope we are not too

hard on you today in our questioning, but it is a very important part, role,

that we play in making sure that we get the answers to the questions that the

Auditor General put out there and these concerns that he had.

welcome the department, the Auditor General, and the folks from his office also.

That is about it from here.

Thank

you.

CHAIR:

Mr. Peach, would you like to

introduce yourself?

MR. PEACH:

Yes, Calvin Peach, Bellevue

district. I just want to clear

something up before we go. We heard

in a conversation outside earlier, we were talking about the food fishery and I

said two weeks; but my colleague, Kevin Parsons, says it is only one week, so I

will go by Kevin. So I am sorry

about that, but anyway, we move on.

MR. K. PARSONS:

We got it straightened up.

MR. CROSS:

That is a fishy story.

MR. PEACH:

It is a fishy story, yes.

MR. CROSS:

Eli Cross, Bonavista North.

MR. MURPHY:

George Murphy, MHA for St.

John's East.

MR. OSBORNE:

Tom Osborne, MHA, St. John's

South.

MR. HUNTER:

Ray Hunter, MHA, Grand

Falls-Windsor – Green Bay South.

CHAIR:

Mr. Hunter is the

Vice-Chair.

Murphy will now administer the oath.

Swearing of Witnesses

Mr.

Patrick Morrissey

Mr.

Charles Bown

Mr.

Wesley Foote

Mr.

Paul Morris

Mr.

Paul Carter

Jackie Janes

Tanya Noseworthy

CHAIR:

Thank you, Ms Murphy.

We will

begin today by having our Vice-Chair, if he wishes, say a few words.

We also have Mr. Paddon, the Auditor General, or if he prefers his

Auditor who actually handled the audit, to say a few words.

Then we will go to the department to say a few words if they wish to.

This is to provide a context so that we do not just jump into asking

questions and nobody knows why you are asking these questions of these people.

It sort of provides an opening.

When we

go into questioning, the questions alternate between an Opposition member and a

government member. Nominally it is

ten minutes. Sometimes it is a

little longer; sometimes it is a little shorter.

We go in rotation so that members can feel free to ask any questions that

they wish.

I am

going to ask Mr. Hunter if he would like to say anything.

MR. HUNTER:

Pardon?

CHAIR:

Would you like to say

anything today?

MR. HUNTER:

Not right now.

CHAIR:

Okay.

Mr.

Paddon, could you give us some background on this particular item?

MR. PADDON:

Yes.

Thank you, Mr. Chair.

First

of all, I will just introduce staff here from my office.

Sandra Russell is Deputy Auditor General, she has been here many times

before, and Patrick Morrissey is Audit Senior with the office.

He was the one who was responsible for the conduct of the audit.

Mr.

Chair, this is, I guess we could say, a relatively short report item that we

have. Our objectives were small.

We had two objectives – I guess to back up a little bit.

The Energy Plan was released by the government in 2007.

So about a seven-year time horizon had passed since the release of the

plan. Our objectives were, one, to

determine how much progress was being made towards implementation of the plan;

and, two, to determine what systems were in place to monitor and report on the

action items in the plan.

The

Energy Plan had 107 policy action items that were intended to guide development

of the Province's energy resources.

It was our objective really to see how the department was making out in terms of

implementing those policy objectives or policy items, action items.

In terms of our conclusions around the implementation of the policy

items, we felt the department was doing a fairly good job in terms of

implementation of the plan of 107 items.

By and large, it would probably be fair to say that well over 90 per cent

of those items were well in progress towards being implemented.

The

issue that we did find, and the one recommendation that we do have, revolves

around reporting, and despite a commitment to do so, there had been no public

reporting of the implementation of the Energy Plan.

So the recommendation we made to the department was that they should put

a process in place to ensure there is a public reporting process.

Really,

that is it. It was a relatively

small

chapter in our report, but the Energy Plan is a fairly significant policy

with government so we thought it deserved a look.

CHAIR:

Thank you, Mr. Paddon.

Mr.

Bown, did you want to provide some sort of feedback or background on what your

department or your division, the section, does or has done, or proposes to do

with respect to the Energy Plan?

MR. BOWN:

First of all, I would like

to thank you all for inviting us here today to discuss the Auditor General's

review of the implementation of the Energy Plan.

First

of all, I would like to introduce my officials.

Energy. Behind me is Wes Foote, he

is the Assistant Deputy Minister, Petroleum Development.

Going down the line from my left is Paul Morris, Assistant Deputy

Minister, Energy Policy; Paul Carter, Assistant Deputy Minister, Royalties and

Benefits; Jackie Janes, Assistant Deputy Minister, in the Office of Climate

Change and Energy Efficiency, not in my department; and Tanya Noseworthy, who is

the Executive Director of Policy and Planning.

Our

department thanks the Auditor General for his review of the Energy Plan.

The review was a thorough analysis of the work that we have undertaken

since September 2007 to implement the 107 policy actions contained in the plan.

As the

Auditor General did note, he highlighted two findings that the department had

made progress toward the implementation, toward the policy actions of the Energy

Plan, and that there was no comprehensive report in the implementation of the

plan as a whole has been raised to the public as of yet.

There was one recommendation that the department complete the report on

the status of the implementation and related outcomes of the plan.

So that should be made available to the public.

I am

pleased to report we have fulfilled this recommendation with the release of a

progress report on May 11, 2015.

This report provides an overview of the implementation of all 107 actions.

As of December 31, 2014, ninety-four of 107 actions contained in the

Energy Plan have completed or are operational.

The remaining actions are in the planning stages, or are longer-term in

nature.

More

specifically, fourteen of these actions are discrete pieces of work that are now

complete. Eighty actions, or 75 per

cent, have been fully operationalized and have been incorporated in our

day-to-day work in the department.

Ten actions continue to be actively worked on and are expected to be completed

or operationalized in the very near future; and three actions are longer-term

policy actions that rely either on the completion of existing actions or have

been deferred until sometime in the future for strategic reasons.

With

the release of this report we have committed to continue to release periodic

updates on the implementation of the Energy Plan.

As well, we will continue to provide updates on Energy Plan

implementation as we have done in the past, as part of the normal monitoring and

reporting activities of the Department of Natural Resources, including

strategies, annual reports, and budget monitoring.

It is

our intention to answer all of your questions here today.

If for some reason I cannot, I will endeavour to provide the answers to

the Committee as soon as possible.

I would also beg your indulgence, that sometimes when you ask a question to

allow us the time to go through the information here; 107 actions is quite a

large amount of information, as you can see that we have carried here with us

today. So if there is a pause just

for a moment, it is because we are cycling through the mounds of information

that we have here.

Thank

you very much.

CHAIR:

Thank you.

We will

start the questioning with Mr. Osborne.

MR. OSBORNE:

I thank the witnesses across

from us as well today for participating.

Just a

couple of questions in the 2007 Energy Plan: the policy action to continue to

pursue the acquisition of the 8.5 per cent federal investment in the Hibernia

Project, whatever happened to that particular policy action?

MR. BOWN:

That policy action was

pursued on a number of occasions.

In reality, the desire to purchase it is also coincident with the desire to sell

has indicated on a number of occasions that it would be their policy to sell,

but on other occasions they have not.

We did

have early discussions with them, post-2007, but as of this date those

discussions have not resulted in the conclusion of a purchase of those shares.

MR. OSBORNE:

Okay.

The 10 per cent equity position in all future oil and gas projects, has

that happened?

MR. BOWN:

The 10 per cent says that we

would purchase up to 10 per cent.

As of 2007 when this action was posted, we were already in discussions with the

Hebron Project and also with the White Rose growth lands project.

At that

time, we secured 4.9 per cent of the Hebron Project.

That was in 2008. In 2009,

it was 5 per cent of the White Rose growth lands expansion project.

In 2010, we secured 10 per cent of the Hibernia Southern Extension.

So the first two projects were already under negotiation by the time we

had made this commitment, however, the final project we did secure the 10 per

cent equity.

MR. OSBORNE:

Okay.

I just

wanted to clarify something. In the

Action Plan it says, “Establish a policy to obtain a 10 per cent equity position

in all future oil and gas projects … .”

Where did you get the position up to 10 per cent?

MR. BOWN:

At the time, 10 per cent was

based on where we were in the maturity of our oil and gas fields.

Also in terms of establishing our energy company, at the same time it was

felt that a target of 10 per cent was appropriate for where we were in our

evolution. Also, it is consistent

with some similar type targets we had seen in other jurisdictions where they had

started out, that a lower percentage would be best to start, but that does not

mean that sometime in the future that 10 per cent may be revisited.

MR. OSBORNE:

Okay.

When

exactly did that change from obtaining 10 per cent to up to 10 per cent?

MR. BOWN:

Sorry, that was my mistake.

I said up to, it is 10 per cent, correct.

MR. OSBORNE:

Okay.

Another

policy action under wind energy, that government would “Pursue opportunities for

locating manufacturing and fabrication of wind turbine components such as

towers, tower bases, and turbine blades in the province.”

Has that ever happened?

MR. BOWN:

Since the initial RFPs,

there were two RFPs for wind power in the Province where we saw the

establishment of twenty-seven megawatts of each in both Fermeuse and in St.

Lawrence, that there have been no additional calls for RFPs for wind power in

the Province. That does not mean

going forward that with the Maritime Link we will also have the capacity to

establish more wind power in the Province.

At that time we will pursue that particular action to have those

components, if possible, and commercially possible, to have them fabricated in

the Province.

MR. OSBORNE:

Okay.

I guess

just to redirect the question again, the Province was going to “Pursue

opportunities for locating manufacturing and fabrication of wind turbine

components such as towers, tower bases, and turbine blades in the province.”

I understand the projects and the call for proposals, but what happened

with that particular policy item, the manufacture of turbine components and

parts?

MR. BOWN:

That has not been pursued

based on need. There has not been

an identified project come forward except for the most recent project that has

been announced by Beothuk Energy, which we have been in conversation with them

as well pertaining to their manufacture and fabrication opportunity in Corner

Brook. At that time, that policy

was not pursued as there was not an opportunity that we foresaw in the near

future whereby there would be an additional wind power in the Province, given

that we were isolated from the North American grid.

MR. OSBORNE:

Okay.

The

policy action, “Installing scrubbers and precipitators, and maximize the use of

wind, small hydro and energy efficiency programs … .”

I just wanted to start with the scrubbers and precipitators at Holyrood.

Can you tell me what happened with that?

MR. BOWN:

That decision of whether to

use scrubbers and precipitators was coincident with the decision on whether to

build the Muskrat Falls Project. If

the decision had been made to pursue the Isolated Island Option, scrubbers and

precipitators would have been installed at the Holyrood facility.

At the

time, it was a nominal cost of $600 million to $800 million for those particular

pieces of equipment. When the

decision was made to pursue the Muskrat Falls Project and to sanction the

project, then it was not necessary to continue on with a decision to make that

capital acquisition.

MR. OSBORNE:

Okay.

Now, I

understood from the 2007 Energy Plan that one of the objectives was to pursue

the development of the Lower Churchill.

In looking at the policy items, when it talked about installing scrubbers

and precipitators at Holyrood, I did not identify where it said that was

contingent on whether or not the Muskrat Falls Project proceeded.

MR. BOWN:

I recognize that.

Yes, I do recognize that. In

some respects a lot of the policy actions are meant to be dynamic.

In this

particular instance, in choosing not to pursue using Holyrood over the longer

term, it would not make appropriate sense from a ratepayer perspective to make

such a significant capital investment in scrubbers and precipitators, which

would have been designed to last for a long period of time, when you had made a

decision to pursue another capital project to provide electricity to the

Province.

MR. OSBORNE:

Okay.

wonder how well thought out the plan actually was, then, if on one hand we were

saying we were going to pursue the development of the Lower Churchill, and on

the other hand we were saying we were going to install scrubbers and

precipitators, not either contingent on the other.

It seems like a conflict if we were looking to pursue both

simultaneously.

MR. BOWN:

I just want to be clear, we

are saying the same thing. The

action that is in the Energy Plan says that we will pursue the Lower Churchill

Project, or install scrubbers and precipitators.

MR. OSBORNE:

Okay, I will review that

when the next person questions, but I did not recognize that.

MR. BOWN:

Yes.

MR. OSBORNE:

Okay.

It also

talked about maximizing the use of wind, small hydro, and energy efficiency

programs. I am not aware of either

of those being fulfilled, maximizing the use of wind.

I know we had a couple of projects, but I do not – when you look at the

2007 Energy Plan, it talks about this Province being one of the best wind energy

resources in the world. So two or

three projects I would not consider maximizing the use of wind.

Why is it we did not further pursue wind energy?

MR. BOWN:

That is a good question. I think

around the time we were making the decision on whether to pursue the Isolated

Island Option, or to pursue the Muskrat Falls, the decision then was made, how

much wind capacity could the Island actually absorb in the Isolated Island

Option? That was a large part of

the discussion that occurred at that time on whether we should pursue the

Isolated Island Option.

There

were a number of studies that were done that pegged us at around an additional

fifty to an additional 100 megawatts of wind that could have been done at that

time. With the decision to do the

Muskrat Falls Project and installing the Maritime Link, we actually unlock a

greater potential to pursue wind in the Province.

Wind is a tremendous supporter of hydroelectric power.

apologize, my phone is buzzing. I

am sorry, I just lost my train of thought.

What we

can do when we install the Maritime Link, actually it would present a greater

opportunity to maximize the value of our wind resources, far superior than we

would have been if we had stayed with the Isolated Island Option.

With the Labrador-Island Link and the Maritime Link, we are actually able

to monetize wind energy not only on the Island, but in Labrador as well.

We have access to the reservoirs in both Labrador and on the Island that

wind power could actually support.

There is a growing demand for electricity in the North American marketplace, for

clean energy that is also supported by wind energy as well.

MR. OSBORNE:

Okay.

Can you

point out to me where in the 2007 plan that it says if the Lower Churchill is

developed that we would not pursue the scrubbers and precipitators and that we

would not pursue wind? Because I am

just looking, all three policy items are there.

One of the policy actions is lead the development of the Lower Churchill

Hydroelectric Project, through the Energy Corporation.

Another policy item is install scrubbers and precipitators at Holyrood.

Another is: maximize the use of wind energy.

So they are all listed as policy actions.

I am

just wondering if you can point out to me exactly where it says that if the

Lower Churchill proceeds, we would not look at the scrubbers and precipitators

and we would not look at wind energy.

MR. BOWN:

The intent was not wind either/or with Lower Churchill.

In the Isolated Option, actually wind power was part of that scenario as

well. I apologize if I had

characterized it to you as an either/or.

I just painted it in the context of the Lower Churchill Project.

In the

Isolated Island Option it also included not only maintaining the Holyrood

facility, but also new wind projects and small hydro projects as well.

MR. OSBORNE:

Okay.

I just

want to clarify, I guess, for Hansard and for the record.

Does the policy 2007 Energy Plan state that – as you stated earlier, does

it state that if the Lower Churchill is developed we would not install scrubbers

and precipitators?

MR. BOWN:

If I could direct Mr.

Osborne to page 38 in the Energy Plan in the left-hand column, it reads: The

Government of Newfoundland and Labrador will address environmental concerns

related to Holyrood by either (

a) replacing Holyrood generation with electricity

from the Lower Churchill through a transmission link to the Island; or (

b) installing scrubbers and precipitators, and maximize the use of wind, small

hydro, and energy efficiency programs, to reduce reliance on Holyrood.

MR. OSBORNE:

Okay, thank you.

MR. BOWN:

You are welcome.

CHAIR:

We should move on to a

government member now.

MR. K. PARSONS:

Thank you, Mr. Chair.

I just

wanted to go back to what Mr. Osborne was asking.

I am just going to when we were here debating all this in the House of

Assembly. At that time I think the

options were put forward whether we do the regeneration at Holyrood or the Lower

Churchill that, at the end of the day, once we did the Lower Churchill,

eventually Holyrood would be shut down.

Was that the plan that was in place?

MR. BOWN:

Correct.

So that very clearly identified that if the Lower Churchill Project did

proceed, that the Holyrood plant would shut down for a number of reasons: one is

that there are a lot of environmental issues associated with the burning of

fossil fuel at Holyrood; and the other is the age of the facility and the

reliability.

MR. K. PARSONS:

Okay.

With

the facility there right now we are looking at a couple of years before we get

Muskrat really on. What would be

the time frame that you would be looking at?

Probably I know you would not want to shut down the day that the switch

is turned on, but is there a time?

MR. BOWN:

I can give an approximate.

MR. K. PARSONS:

Okay.

MR. BOWN:

Based on the construction

schedule for Muskrat Falls, it depends actually on the commissioning, and how

the commissioning goes for the generation units and the transmission line from

the Labrador-Island Link. It is

very clear that the commitment has been made that Holyrood will stay open until

such time as that assurance of reliability has been met.

The current project

schedule would see that approximately 2021.

MR. K. PARSONS:

Okay.

Hydro

is after making a lot of investments in Holyrood in recent years, last year in

particular. Can you talk a little

bit of what they did and is Holyrood any better today than it was when we had

DarkNL?

MR. BOWN:

I guess the objectives,

regardless of whether we were going to build Muskrat Falls or not, were to

ensure that there is reliability in the system and that maintenance work takes

place. Clearly identified in 2010

in a report that Hydro had made to the Public Utilities Board, the decision on

generation was required and it needed to be made.

It was very evident at that time that new generation was going to be

required prior to a major expansion at Holyrood or at Muskrat Falls and, in the

interim, combustion turbines or gas turbines were going to be required.

The

initial estimate was that that was going to be needed in 2015.

Contrary to some of the earlier, I guess, beliefs, it is clear that

electricity demand is increasing in the Province and that the absolute need for

having a combustion turbine was moved forward both to meet demand but also to

improve reliability at Holyrood.

MR. K. PARSONS:

Okay.

I just

want to go back to a little bit of the other stuff too about the wind energy.

My understanding of wind, wind is like a secondary source; it cannot be a

number one source. Is that correct?

MR. BOWN:

Wind is intermittent use; it

cannot be relied on as base load. I

will give an example. During the

January outage in 2014 the wind speeds were in excess that the wind turbines

were not working as efficiently.

Again, with wind, it is either blowing too much or not enough.

You cannot rely on it as base load in your generating system.

Hydro's

base load, you run the water through and it is there for you to use.

The lights will come on when you flick the switch.

The same thing with a gas turbine or Holyrood, an oil-fired thermal

plant, when you flick the switch, the lights will come on.

With

wind, it runs on a capacity factor is the term that is used.

North American, 25 per cent to 35 per cent capacity factor – that means

that 25 per cent, 35 per cent of the time you can rely on that to provide you

with electricity.

MR. K. PARSONS:

You also mentioned about the

Maritime Link with wind. What is

the plan? Is it the plan to

generate more electricity through wind generation so we can supply it to the

Maritime Link?

MR. BOWN:

Once the Maritime Link line

is constructed there will be excess capacity.

Nalcor has secured capacity on that line.

We can make use of that excess capacity either through small hydro on the

Island – we have a number of sites that have been on the books for years – as

well as additional wind.

Actually the opportunity is there for wind projects far in excess of what we

have seen to date. Our largest –

both of them are twenty-seven megawatts, so we do have the capacity for

large-scale wind.

MR. K. PARSONS:

Okay.

I just

want to get back to the Auditor General's report now.

In 2008 in the Budget, it was estimated about $35 million was going to be

spent on implementing the report.

From 2008 to 2013 there was $66 million spent.

What was the main reason for the cost to be so much more than what it

was?

MR. BOWN:

I guess I would characterize

that differently in that it is not that $66 million was spent.

MR. K. PARSONS:

Okay.

MR. BOWN:

The Auditor General reports

that $33 million was actually spent.

The issue there was not so much that more dollars were spent; it is that

it was not spent within the years that it was budgeted.

MR. K. PARSONS:

Okay.

MR. BOWN:

If you add up all of the

years when money was budgeted for the Energy Plan, it would add up to $66

million in total budget. However,

if you go back and add up the money that was actually spent, it would be $33

million. That is due to delayed

implementation of some of the programs and actions in the Energy Plan itself.

MR. K. PARSONS:

Okay.

That is

it for questions from me, Mr. Chair.

CHAIR:

Mr. Murphy.

MR. MURPHY:

Thank you, Mr. Chair.

Welcome

to Public Accounts, everybody. I

understand from these recommendations that this is your first progress report.

I must say I will compliment you on the extent of the report.

It is a very good report, but I think there are some questions to be

asked in the report itself.

I will

say, I guess, the first couple of questions, Mr. Bown, at this particular time,

the timing of the report. Will you

be coming out with this report now once a year?

Do you have a particular time frame that you will be releasing this

report? Will it be done every six

months? How are you going to be

doing it?

MR. BOWN:

We have not established a

fixed timeline for when we will report next.

However, we have taken, very clearly, the notice from the Auditor General

that we need to report more regularly on the actions on the Energy Plan.

MR. MURPHY:

Okay, but you have not

decided on how many times in the run of a year you are going to be reporting it.

Right now this is report number one.

I would

like personally to see it at least every six months considering – well, I guess

your department is dealing with a lot of things now, market volatility of oil

being number one. So a lot of these

action items that you have here in the report obviously are going to be affected

by that.

I would

like to see it every six months. I

do not know how everybody else feels about that, but, again, congratulations on

having the report finally done. I

think it is timely, as the public has a right to know exactly where their

dollars are going and what the focus is on government, and of course it supplies

the ability for whoever is next to actually have a platform to go by and gets

everybody pulling on the one rope.

So, if

I can, I would like to ask you about some of the items that are contained within

the progress report itself. On page

8, for example – some of my own observances, too, if you do not mind, and maybe

suggestions. I do not know if you

can take it that way.

It says

here: Investing in Geoscience. “In

March 2009, a Memorandum of Understanding (MOU) was signed between Nalcor and

the Department of Natural Resources … .”

It carries on here by talking about the actual fact that what they are

doing is marketing of the potential of the oil properties that are off our

shores.

I am

just wondering if the Department of Natural Resources would have considered the

same thing for our mineral resources, too, not just oil and gas?

MR. BOWN:

That is a really good point. I will

take you back in time a little if you do not mind, if you will indulge me for a

moment.

MR. MURPHY:

Sure.

MR. BOWN:

Our interest here was to try and find a way to increase the level of exploration

in the offshore. I think from 2005

to 2009 we were experiencing about 1.5 to 1.8 wells per year.

Again, if you want to have new discoveries, you have to have a greater

level of exploration in your offshore area and our intent was to try to increase

that level to three to four wells per year, if we wanted to be successful.

We had

discussions with the oil companies about how that could occur and I guess their

approach of us providing them with money to do that was not in line with what we

had seen as the best approach for government to take.

So we did exactly what you had suggested.

Within

my department, within the Mines Branch, we actually do open-source geoscience.

So the purpose of the geological survey is to do public geoscience, on

behalf of the people, to publish the results of their work and to make it known

to prospectors and to junior exploration companies about their current

geological understanding of their mineral prospectivity in the Province.

So the open-source GeoFiles are updated every year based on the work of

the geological survey.

That

was a template that we actually turned to and said maybe the best thing we could

do is to follow that same model, do our own geoscience in the offshore, and make

that available to companies to attract them here and indeed cause them to

purchase the land at very high prices and to drill as well.

We also

looked to other jurisdictions. Nova

Scotia, around the same time, had made the same decision to do public

geoscience.

MR. MURPHY:

Okay.

understanding, through the mineral industry, is that mostly it is chemical

surveys that are being done. Am I

right on that? Right now there are

no geomagnetic surveys done, aerial surveying?

MR. BOWN:

We have not done a geomagnetic survey in a number of years, but we do lake bed

sediments, we do till samples, we are doing rock analysis – we have our own

laboratory.

MR. MURPHY:

Okay.

MR. BOWN:

We publish all of our results, and actually our GeoFiles online gives you access

to all the work that the department does on an up-to-date basis.

MR. MURPHY:

Any sign of a slowdown in

that area on the part of our prospectors going in and looking, or some companies

expressing interest in coming in and looking at various areas that you have

surveyed?

MR. BOWN:

Prospectors are always interested in coming and looking, but the funds that are

made available to them have diminished because other companies are not

supporting them.

MR. MURPHY:

Okay.

When it

comes to the actual name of the program for prospectors –

MR. BOWN:

The prospectors' incentive program.

MR. MURPHY:

The prospectors' incentive

program, any plans by government to boost up that fund, by the way?

MR. BOWN:

As we went through our

program review last year we did make a cut to the program as a whole for

prospectors and for junior mining companies, but we cut the amount for junior

mining companies and not for prospectors.

So we did not cut it last year.

MR. MURPHY:

Okay, thanks for that.

If I

can just make the suggestion to consider the aerial survey work too, it might

help you get some more people into those areas.

At least that is what I am hearing, anyway, from the industry.

It is a good job on that. I

can see why government would have something to sell when it comes to offshore

oil and gas.

On page

10, Ensuring Local Benefits, I wanted to talk to you about this particular item

because, of course, a couple of months ago we were dealing with ExxonMobil

winning a court case – I think it was ExxonMobil won a $19 million court case

and they ended up not having to pay for the retaining, I think it was, of

educational resources. You might be

able to refresh me on that one now.

It came to me when I was going through the files last night.

MR. BOWN:

Are you referring to R & D?

MR. MURPHY:

Yes, research and

development.

MR. BOWN:

NAFTA?

MR. MURPHY:

I think it might have been

tied into NAFTA, yes. They won a

$19 million court case, I think it was.

MR. BOWN:

Seventeen.

MR. MURPHY:

It was somewhere, $17

million, $18 million, $19 million anyway –

MR. BOWN:

Seventeen.

MR. MURPHY:

– as reported.

MR. BOWN:

Yes.

MR. MURPHY:

That was a direct benefit

that this Province lost. When I

read the paragraph about ensuring local benefits, I can understand the intent of

government in trying to do that; but sometimes we lose these cases, and some of

these benefits we lose at the same time, and it costs jobs.

It obviously costs research money too.

How do

we ensure that? Is government going

to be changing its policies or anything like that?

Is there anything that they can do to change policies to ensure that once

something is bargained for that the companies follow through on it?

MR. BOWN:

In this instance, this

relates to new research and development guidelines that the Offshore Petroleum

Board instituted after the Hibernia and Terra Nova Projects had completed their

benefits plans and were signed.

MR. MURPHY:

Okay.

MR. BOWN:

Prior to that there were

notional requirements for R & D spending in the Province.

What the offshore board did was instituted specific spending requirements

based on capital expenditures in the Province.

Both Exxon and Murphy brought the case to the NAFTA tribunal.

Actually, Petro Canada went to the provincial courts, which they lost the

case in court.

At the

NAFTA, two of the three panelists on the tribunal agreed with Exxon and Murphy,

and one did not. The concept or the

principle behind the judgement is that the deal was already in place and that

the regulator had no capacity to be able to change the regulations

post-establishment of the previous agreement.

In this

particular instance, the R & D spending will continue in the Province.

I will not make light of the fact that the spending will still take

case under NAFTA.

So the

impact the amount of R & D spending in the Province.

If Exxon and Murphy spend a dollar of R & D spending in the Province,

back to Exxon and Murphy.

MR. MURPHY:

Okay, so that is not costing

the Newfoundland and Labrador taxpayers then?

MR. BOWN:

No.

MR. MURPHY:

Okay.

I will

leave that at that for now.

On page

15, I have two questions here.

Under the Delivering Efficiency and Conservation Programs, on the second

paragraph, Residential, it says, “The average client is saving an average of

$720 per year on their heating costs.” I

wondering, do you have a survey or a sample – I guess, how did you do that

survey? How did you come up with

those numbers? I am wondering if

you can make that publicly available, too, as an incentive to the general public

about residential energy and conservation program.

MR. BOWN:

Okay, I understand.

This is a program that is actually delivered by the Newfoundland and

Labrador Housing Corporation.

MR. MURPHY:

Yes.

MR. BOWN:

The reason that they know is

that they actually collect those statistics themselves.

What

you are asking is can we make those statistics available.

MR. MURPHY:

Sure.

MR. BOWN:

Okay.

Then I will bring that up with the Housing Corporation and if I can make

that available to you, I will, absolutely.

MR. MURPHY:

Okay.

It also

says here – I am just trying to see here now.

The amount of energy, for example, which was burned by the average house

– they obviously saved $720. I

believe I saw a government press release that expressed the figure of about 30

per cent to 35 per cent energy savings over the run of a year.

Do you recall that from Newfoundland and Labrador Housing Corporation?

That would have been in 2012.

I believe they had the release out in June or July.

MR. BOWN:

No, I do not recall.

I would say that this program was initiated through the Energy Plan with

an initial $6.9 million investment.

We worked very closely with the Housing Corporation to put this program in

place.

first, we were able to leverage federal dollars through the EnerGuide program.

Actually, the Housing Corporation itself

applied for grants under the EnerGuide program.

It would not double their investment, but they could get a return on the

dollars they invested. That would

indicate that this program to date has been very successful.

MR. MURPHY:

Okay.

I will come back to that too, I guess, after when we get to the direct

policy items.

Further

down on page 15, in the

section Fostering a Culture of Conservation, it talks

about the money that was allowed Grenfell, for example, to leverage $2 million

from the Atlantic Canada Opportunities Agency.

You

managed to get $100,000 from a private donor, McCain Foods.

What was their interest in investing $100,000 there?

Were they going to gain anything commercially from that particular

program?

MR. BOWN:

I apologize, I do not have

an answer to that one, Mr. Murphy, but I can check with the forestry agency.

MR. MURPHY:

Okay.

That is fine.

Yes, we

would be good with that if you can get us an answer for that one.

CHAIR:

Mr. Murphy, we should go to

a government member now.

MR. MURPHY:

Sure.

Okay.

MR. PEACH:

Thank you, Mr. Chair.

I just

have a couple of questions. I am

interested in a little operation that is going on in my district.

I have asked questions before and I do not seem to get many answers, but

not many people know about it. That

is the little operation that is going on in the Monkstown area with regard to

the seven turbines there. Once this

new transmission line comes on scene now throughout the Province, I am just

wondering what the future is for that little operation out there?

MR. BOWN:

That is a generating

facility?

MR. PEACH:

It is a turbine, so water

flow. Yes.

MR. BOWN:

The addition of the

Labrador-Island Link and the power from Muskrat Falls will not impair any

existing generation in the Province.

All that will continue.

MR. PEACH:

So that will pretty much

remain the same because there is a lot of work going on out there this summer, I

understand. The residents there are

asking me questions about it, but I just cannot answer them because I did not

even know the operation was being upgraded or what is happening out there.

MR. BOWN:

Depending on the facility,

existing generation is the least-cost generation that we have.

Because all you are paying now are operating and maintenance costs, you

do not have large capital. If you

had to do a major rebuild on a very old facility, sure, then you would

reconsider that. I think you have

Petty Harbour that is more than 100 years old that is still generating

electricity, and that is going to continue.

MR. PEACH:

I know it is only a small

operation, but when we had DarkNL the people in that area there, six or seven

communities, still ended up with power.

It was really a great asset to the Burin Peninsula and to those areas.

We are

still experiencing some power loss now.

Like last week there was a power loss in one of the stations there, I

think in Chapel Arm, and last year when we had some weather there was a failure

down in Sunnyside. We are still

experiencing that from time to time normally when there is bad weather, if it is

windy and rain, or a lot of sleet in the wintertime and things like that.

Are we

doing any checking on upgrades needed to these facilities at the moment, or what

is happening there? It seems like

there are a lot of outages. People

are still asking me questions saying, well, you know we had DarkNL and we are

still having experiences now with outages.

What are they doing about it?

Are they trying to upgrade the system so that we do not have that

experience every year?

MR. BOWN:

Yes.

I think I will go back in time.

Probably most of us can think back to our youth and probably our twenties

and thirties, and I might recall even in university, we had power outages in

those days as well. I think our

understanding is that the frequency of outages really has not changed that much

over time.

The

fact that we are an isolated system means that whenever there is a weather

incident, depending on how localized it is, that if there is a generation issue

then we do not have any other location to draw generation from.

If you are in Ontario and you have a generation issue, you can pull it

from New York, or from Quebec, or from Manitoba.

We do not have that capacity.

Specifically to your question, a lot of money has been reinvested into the hydro

system, particularly starting in 2008 when a new capital asset management

program was put in place to upgrade the system.

So, yes, we are always going to have some kind of weather-type incident.

I think

in Vancouver this past summer they had eighty kilometres of wind, which is a

rare occurrence, 500,000 people were without power.

So weather is always going to play a factor on the supply and

distribution of electricity.

MR. PEACH:

Yes.

Normally with breakages there is always something that is unforeseen.

If you buy a new car you think you have it made because you have a new

car, but it could break down on the way home.

MR. BOWN:

I guess it is a balance also between cost and reliability.

You continue to buy a new car every other year or every four years to

maintain the warranty and have good reliability, or you continue to pay

maintenance on a five, six, seven, eight, or ten-year-old car but as time goes

on it becomes less reliable.

MR. PEACH:

Yes.

In some

areas now there are some pockets of work going on with regard to the new

transmission. How far along are we?

Is working picking up on the Island now?

I am getting a lot of people asking me when work is going to start.

When

can we see some work coming to our area and that sort of thing?

Can you give us a little bit of information as to when we will soon see

things starting to get up and running?

I know Soldiers Pond is there.

There is a lot of work going on there and in some other areas.

How far are we right now?

MR. BOWN:

I can highlight that right-of-way clearing and some transmission work has

already started on the Northern Peninsula.

I do not want to be too exact, but as I understand it right-of-way

clearing is headed toward the Central part of the Province.

So this year and next year you are going to continue to see progress on

the transmission line moving east.

MR. PEACH:

So we are moving from the

Northern Peninsula this way. There

is no work right now going on or planned at this immediate time for the Eastern

or –?

MR. BOWN:

Not for the Eastern portion. It

will be focused on the Central and on the Northern Peninsula.

MR. PEACH:

Okay.

I just

wanted to refer to page 31 of your progress report.

I was looking at and reading the

section there where it says, “Work with

Aboriginal governments and groups in areas where potential wind developments are

subject to an Aboriginal treaty or a land claim.”

Then over on the side there you see, “The Provincial Government continues

to fund wind monitoring studies in coastal Labrador to assess the potential for

small scale wind developments to …” replace diesel generators.

How many diesel generators do we have in Labrador?

MR. BOWN:

We have twenty-one in the Province as a whole.

So we have twenty-one isolated diesel communities.

We have sixteen in Labrador.

MR. PEACH:

Sixteen in Labrador.

MR. BOWN:

Yes.

MR. PEACH:

When the new operation is up

and running, will some of those still exist or are we looking at alternatives

for –?

MR. BOWN:

Muskrat Falls will not provide power to these coastal communities.

Over the past six or seven years we have looked into things such as what

would the cost be to connect or interconnect those communities?

Our focus, to date, has been on what other alternatives do we have to

provide electricity to these communities other than diesel.

We have

funded a number of studies. The

first one we funded was a $250,000 study in 2008 to look at, in seven

communities, what the alternatives were with respect to wind or to small hydro.

We followed up on that with a $2.5 million study for hydro sites and a

$900,000 study on wind sites.

The

wind towers we installed – I will just back up a bit.

The hydro power, the opportunities are more prevalent in the Southern

regions of Labrador and wind actually is better in the Northern regions of

Labrador. We worked with the

Nunatsiavut Government, Newfoundland and Labrador Hydro did, for the

installation and location of those wind towers.

That wind monitoring program is coming to an end this summer.

The wind towers are coming down, with the full co-operation of the

Nunatsiavut Government. The

hydrological studies are going to continue until 2016, at which point they will

end.

Our

objective here is to, if possible, get these communities off the higher-cost

diesel and to provide them with opportunities where, at least if they wanted to

grow or business wanted to expand in those communities, you would not have to

look at the incremental cost of a large diesel unit versus having a hydro site

or wind power nearby –wind would be supplemented by diesel, of course.

Or in the case of some Southern Labrador communities where you could have

two, three communities interconnected off one hydro site.

MR. PEACH:

So the cost here says $3.5

million. Was that the cost included

in the study that was done? It says

down on the bottom there, “The Provincial Government and Newfoundland and

Labrador Hydro completed the Coastal Labrador Alternative Energy study … .”

MR. BOWN:

Yes.

MR. PEACH:

So the $3.5 million, that

was the cost for that?

MR. BOWN:

That includes the $250,000 I

just referenced, the $2.5 million, and the $900,000.

MR. PEACH:

Okay, so that is the $3.5

million.

MR. BOWN:

Yes.

MR. PEACH:

One other question I have

taken notice of in 2011-2012, maybe.

There were a lot of prospectors who were on the Burin Peninsula around

Grand Le Pierre. They were

exploring for a lot of minerals and that in the ground up there.

Some of

them, they said, probably would bring some kind of a mining to the area.

There were quite a few and I do not know all the names of the ones that

were there. I am just wondering, do

you have any update on what happened there?

Or does there seem to be any future for the ones that were in there?

MR. BOWN:

We have not seen any

increase in staking activity there based on the prospecting.

Normally what follows is if a prospector has a find, they will stake that

property. We have not seen an

increase in staking, nothing that has been brought to my attention, nor have we

seen any of the junior companies come in and highlight that there is anything

there.

Newfoundland and Labrador is a very large place and you never know from one day

to the next when you are going to kick over a rock and you are going to find a

really good discovery. I think at

one point back in the early 2000s someone said that we would never have another

large discovery in Labrador – that was pre-Voisey's Bay.

So never say never.

MR. PEACH:

I would assume, in talking

to the prospectors myself, I was kind of getting the impression that a lot of

what they were finding was mostly surface and not into the mining part of it.

They were jumping from one area to another and they were finding some,

but in small quantities.

Okay,

Mr. Chair, I do not have (inaudible) –

CHAIR:

Thank you, Mr. Peach.

Mr.

Osborne.

MR. OSBORNE:

Thank you.

I have

a couple of more questions on the policy actions outlined in the 2007 plan.

One was to join the Climate Change Registry to ensure consistent and

verifiable measurement of greenhouse gas emissions, as per the commitments from

the August 2007 meeting of the Council of the Federation.

Can you

give us an update on that?

MR. BOWN:

In June 2008 we did join the Climate Change Registry.

MR. OSBORNE:

That was June 2008?

MR. BOWN:

Yes.

MR. OSBORNE:

Okay.

“Release of an updated Climate Change Action Plan by 2008 incorporating specific

targets and commitments which build upon initiatives being undertaken by the

Province … .” Can you give us an

update on that?

MS JANES:

Yes, the Province released a plan in August 2011, a Climate Change Action Plan.

It contained seventy-five commitments.

It is a five-year plan; it runs from 2011 to 2016.

The Province committed to release an update report, a progress report,

and that was released in September 2014, midway through the five-year

implementation period. It contains

greenhouse gas reduction targets.

In 2001

the Province adopted regional greenhouse gas reduction targets as part of the

New England Governors and Eastern Canadian Premiers forum.

In the 2007 Energy Plan the Province adopted those targets on a

province-specific basis. The 2011

Climate Change Action Plan reaffirmed the Province's commitments to those

targets. Those targets were to

stabilize greenhouse gas emissions at 1990 levels in 2010, to reduce greenhouse

gas emissions by 10 per cent below 1990 levels by 2020, and to reduce greenhouse

gas emissions by between 75 per cent and 85 per cent below 2001 levels by 2050.

MR. OSBORNE:

Did you reach the 2010

target?

MS JANES:

The Province did not reach

the target; it came very close to the target.

It came within 0.5 per cent of meeting the target, but it was slightly

above stabilizing at 1990 levels.

MR. OSBORNE:

Okay, thank you.

There

was a commitment to provide funding through the Newfoundland and Labrador Green

Fund for feasibility studies on, and the potential implementation of, methane

capture from large existing landfills and utilize that energy source for heating

electrical generation and municipal vehicle fleet fuel.

I know the City of St. John's has been doing some work at the Robin Hood

Bay landfill. Other than that, what

has the Province done to capture methane release from landfills?

MR. BOWN:

Our intent there was to

provide an incentive through the biogas program whereby we would incent

companies or municipalities to capture methane and generate electricity.

We announced that in 2013 –

WITNESS:

In 2014.

MR. BOWN:

In 2014, sorry.

We have had conversations with the City of St. John's since with the

intent that methane capture being one element of being positive for the

environment, but to also capture that methane and use it to generate electricity

would provide an additional benefit as opposed to flaring that gas.

We have had conversations with the City of St. John's and it is open to

other municipalities as well.

MR. OSBORNE:

Has there been any funding

provided since 2007 for the capture of methane from landfills throughout the

Province?

MR. BOWN:

I am not aware of that, Mr.

Osborne. I would have to consult

with the Department of Environment under the Green Fund.

I can get that information for you, but I am not aware of any, other than

for the City of St. John's.

MR. OSBORNE:

Okay, thank you.

There

well as industry, to develop a technology fund that would invest in transmission

for the Lower Churchill power as well as wind opportunities.

Can you give us an update on that?

MR. BOWN:

Sure.

Churchill Project, and in particular, Muskrat Falls, that was one of the options

that was pursued. Our conversations

ultimately led to a federal loan guarantee as being the preferred opportunity

The technology fund option was not pursued, but rather it was replaced

with the federal loan guarantee.

MR. OSBORNE:

Okay.

When

looking at energy efficiency and conservation the 2007 Plan states, “Reducing

our energy use is the most direct way of reducing our energy footprint.

The difference between energy efficiency and energy conservation is often

overlooked, but these are two different approaches.”

It goes on to say that, “Greater energy efficiency combined with

conservation measures will lower our reliance on oil today, thereby reducing the

amount of emissions released into the environment.

Such measures can also help ensure we have sufficient electricity until

the completion of the Lower Churchill development … .”

The

Province had committed to promote and facilitate the energy efficiency and

conservation programs not only for residences, but also business.

Can you tell us what has been done through the 2007 Plan to accomplish

that?

MR. BOWN:

Sure.

Initially, starting in 2007 our first two programs was the EnerGuide program

where we piggybacked with the federal program to allow for residences, private

individuals in the Province, to participate in a program whereby if they

retrofit their home, that they would receive a rebate from the Government of

Canada matched by the Government of Newfoundland and Labrador.

supplement that initiative we actually sponsored the ability of individuals to

pay for the pre-audit. In order to

participate in the program, you had to have a pre-audit.

We actually sponsored having audit companies establish here.

We facilitated individuals and these companies to get together to do the

pre-audits, which would enable the individuals to participate in the program.

We also paid for a portion of the post on it as well.

The

statistics from that particular program, I think we had 2,200 individuals who

actually did the pre-audit portion of the program, and I think 660 did the

post-audit. That does not mean that

all those individuals in between did not participate or receive funds from the

EnerGuide, it is just that maybe they did not do the audit at the end of the

program. I think we expended $4.3

million in that particular program.

addition to that, we ran an energy efficiency program on the Coast of Labrador.

We selected a number of communities there.

Again, important to promote in diesel communities is energy conservation

and energy efficiency. We spoke to

both while we were in the communities there.

We had both hydro employees and we engaged a consultant to go in with the

companies to run some community sessions on the importance of energy efficiency

and conservation, and actually went to people's home within the community to

demonstrate things that they could do to improve their energy efficiency.

We also

talked to them about energy conservation and how important that was.

Again, home heating is a significant issue on the Coast and people rely

on wood or rely on oil. Having them

using their heating stoves or range to provide supplemental heat had an

additional draw on the diesel plants and that caused some issues in the

community. So we spoke to

them about that. We actually did

two programs. We did the two

communities in one year and we went back and did two communities in the next

year.

As of

today, energy efficiency programs are largely run by the utilities through the

takeCHARGE program and supplemented through programs and policies through the

Office of Climate Change as well.

There is a commercial program run through the takeCHARGE program for businesses

to have audits done on their business and what they can do to conserve energy.

MR. OSBORNE:

Okay.

Is the

energy audit program still in operation?

MR. BOWN:

Unfortunately, the

our funding for energy efficiency ceased as well.

It was cost prohibitive to continue that program on our own.

MR. OSBORNE:

Okay.

Now

under the 2007 Plan, unfortunately the energy audit program was cancelled, but

the two initiatives you spoke about that is really a drop in the bucket compared

to what the 2007 Plan outlined as targets.

One was to establish an Energy Conservation and Efficiency Partnership to

develop a coordinated and prioritized five-year energy conservation and

efficiency plan, a detailed plan including priorities and targets by March 2008.

Did that happen?

MS JANES:

Well, Charles can speak,

too. The Department of Natural

Resources did establish the Energy Conservation and Efficiency Partnership to

talk about priorities in 2008. That

was prior to the establishment of the Office of Climate Change and Energy

Efficiency.

After

that office was established in 2009, the energy efficiency strategy was

developed. It was called the Energy

Efficiency Action Plan. It was

released at the same time as the Climate Change Action Plan in August 2011.

It contained forty commitments to try and advance and improve energy

efficiency and conservation across the Province.

That

was also reported on. The progress

in implementing those commitments was reported on in September 2014.

Like the Climate Change Plan, it is a five-year plan.

It runs from 2011 to 2016.

MR. OSBORNE:

So it happened in 2014 as

opposed to 2008?

MS JANES:

No, it was released in 2011

and progress was reported on it midway through implementation in 2014.

MR. OSBORNE:

Okay.

CHAIR:

Mr. Osborne, we should go to

a government member now.

MR. OSBORNE:

Perfect, thank you.

CHAIR:

Mr. Hunter.

MR. HUNTER:

I would like to get into

just a couple of questions that I had in mind about the heating costs for

people, particularly in rural Newfoundland.

There a couple of years ago we had a program where we encouraged pellet

stoves, pellet burning, and manufacturing to cut down on the electricity costs,

but give a good source of high energy, high-efficiency heating, particularly in

rural Newfoundland towards people on low incomes and fixed incomes.

What

happened to that plan? We do not

hear tell of it anymore. It should

be directly related to electricity costs because some people who were putting in

these stoves had electric heat and now they went to pellet stoves.

They got a rebate from the pellet stoves.

Everything disappeared. There was

no mention of it the last couple of years.

Is part of the plan now to go back to other sources of heating,

particularly the pellet stoves?

MR. BOWN:

That particular program was

run through the Forestry and Agrifoods Agency.

The program ended in 2011.

MR. HUNTER:

Yes, but it did save a lot

of electricity that was being produced.

I guess the point that really was on my mind is back in the 1960s we had

a program where if you used electric heat then you got a lower rate on your

light bill and two meters on the house.

One was for your domestic power and then one for your electric heat.

Is part

of the plan down the road, when we are going to have an abundance of electricity

– particularly with seniors, because they are the ones who cannot burn wood

anymore and they cannot avail of other heating sources, and they are living in

smaller accommodations. Will there

be a plan to look at heating costs for seniors on fixed incomes?

MR. BOWN:

Yes, that is very important.

I agree with you.

There

were a number of programs over the past few years run through the Department of

Finance to reduce the cost of home heating for lower income individuals.

I cannot speak specifically to if there is any new program that is in the

offing related to low-income families.

MR. HUNTER:

You cannot say if there will

be a lower cost of electricity. I

am not talking about rebates or anything through Finance –

MR. BOWN:

I understand the exact question.

MR. HUNTER:

– but a lower cost in an

energy plan that we would be saying here is the availability of electricity at a

cheaper cost because –

MR. BOWN:

I cannot speak to a specific initiative at this time, no.

MR. HUNTER:

I know from Grand

Falls-Windsor, I was born and raised and grew up there, many, many years ago of

course, the company supplied all the electricity from the mill.

Today, in Central we have a lot of generation through – I do not know,

there was probably a dozen there, small generating plants.

One of

the questions I did have in mind you already answered for Mr. Peach, but part of

the question that I did have in mind was the new expansion of generation down

the road. We still have a lot of

high potential sites. There is one

on Island Pond in the upper salmon, and the Granite Lake area, and the Exploits

River which had three potential sites for expansion.

If something happened to existing generation, particularly the Lower

Churchill or Holyrood, then Central Newfoundland always seemed to be still

online. Like the power outage we

had a couple of years ago, my power was only off for about an hour.

MR. BOWN:

Yes.

MR. HUNTER:

Central Newfoundland did not

seem to be hit so hard, but there are still lots of generation in that area and

lots of potential generation. Is

the power plan down the road to do more development with possible sites?

MR. BOWN:

As I had mentioned a moment ago, when the Maritime Link is commissioned it will

have excess capacity to what is going to be provided to surplus from Muskrat

Falls. So there will be capacity on

that line for additional energy.

One

example would be we know that Massachusetts and a number of other New England

states are interested in issuing an RFP for electricity.

We have been in conversations with Ontario about providing them with

electricity. Sites such as Island

Pond, that is 36 megawatts; Round Pond is 18 megawatts; Portland Creek on the

Northern Peninsula, Daniel's Harbour, I believe – Daniel's Harbour?

WITNESS:

Yes, twenty-three.

MR. BOWN:

Yes, 23 megawatts.

So we

still have a number of prime hydro sites that are left – not on salmon rivers,

by the way – that are left to develop.

These sites, coupled with wind power on the Island.

Yes, we do have the capacity to have additional generation in the

Province that we would build and sell to market.

We could use it. Obviously

it would be there for reliability for ourselves if we needed it, but for the

most part, yes, we could use that to develop those sites and sell electricity.

MR. HUNTER:

Most of the questions I do

have on my mind are probably better asked to Hydro rather than government.

It is hard to ask questions on this topic when a lot of the questions you

do have pertain to areas where there are other people involved, like Hydro and

the gas companies, oil companies.

MR. BOWN:

Yes.

MR. HUNTER:

We are getting a lot of

questions now about the Labrador oil and gas on the coast, in around central,

because the potential for development up there affects more of Central

Newfoundland, like the Botwood area and places like that.

MR. BOWN:

Correct, yes.

MR. HUNTER:

They are just waiting for somebody to say that the gas finds on the Coast of

Labrador and the Northeast Coast of Newfoundland is really going to be a big

boost for Central Newfoundland. I

get a lot of calls, and people talk to me about the development down there, but

that is better questions, I guess –

MR. BOWN:

Yes. I can speak to that a little,

though, because it is a positive coming out of the Energy Plan, if you do not

mind.

Because

of the public geoscience we funded and the seismic work that we undertook off

the Coast of Labrador we are actually able to reinterpret what the offshore of

Labrador looks like. It was a

widely held belief that there was only ever gas in the near-shore area,

relatively speaking, off the Coast of Labrador, but the work that has been done,

seismic work has identified three new deep-water basins off the edge of the

shelf that look well prone. One of

the existing basins that was south of that is much larger than was initially

thought. It has piqued the interest

of quite a number of companies.

Labrador is not what people thought it was.

It could be quite oil prone.

The

land sale for Labrador takes place in 2017.

So we will have an indication then.

That is the value again – I sort of want to trumpet, I guess I am here to

trumpet the Energy Plan, so I will.

One of

the features of the Energy Plan as well is to make changes to our regulatory

framework as it relates to the offshore.

When that was a scheduled land tenure system, previously companies were

only made aware of what lands were coming open in the year that they were going

to be bid. Now with the scheduled

land tenure system, companies now will have known since last year –

WITNSS:

(Inaudible).

MR. BOWN:

I apologize for turning my

back.

With

the scheduled land tenure system, companies knew four years previous.

So in 2013 we announced when the land sale was going to take place off

the Coast of Labrador. Companies

had four years to prepare for that, and that is the value of adopting that type

of approach. They have the

opportunity to participate in seismic programs now well in advance of bidding on

lands.

MR. HUNTER:

It sounds pretty exciting to

me.

MR. BOWN:

It is very exciting what we

are seeing there, actually.

MR. HUNTER:

Thank you very much.

MR. BOWN:

You are welcome.

CHAIR:

Mr. Murphy.

MR. MURPHY:

Thank you, Mr. Chair.

That is

one of the reasons they have to get that road up to Cartwright you see, for all

that resource development in Labrador.

Mr.

Bown, and I guess the staff too, again, thank you for the report.

I want to keep on carrying through with some of the elements of the

report.

On the

– I guess it would be the first page of Appendix A - Energy Plan Commitments,

“Assume an ownership interest in the development of our energy resources where

it fits our strategic long-term objectives.”

I have

to make, I guess, a bit of a statement.

Are all these asks of the oil companies wanting to get equity shares,

that sort of thing – they would no doubt be contingent on the price of oil.

In 2008-2009, and 2010 when Nalcor was out there acquiring some of these

working interests and such, there were long-term projections of course on a

pretty expensive barrel of oil, but the market has changed now, obviously.

Has the outlook of Nalcor changed as a result of the lowering of the

price of a barrel of oil? How has

that affected their assumptions and their operational needs as regards to going

ahead with this?

MR. BOWN:

I guess like any other

company, for that matter for the Treasury, a lower price of oil impacts

everybody negatively. However,

Nalcor has been very successful over the past two years in price hedging, so the

impact has not been felt so great.

Nevertheless, if it continues for the longer term, clearly it will have a

negative impact.

Nalcor's interest in the offshore is clearly predicated on the interest of other

companies in exploring and having commercial discoveries.

While the price of oil has had some impact in other jurisdictions, we are

still seeing an active interest in wanting to explore in this area.

Again, only a very small portion of our offshore is under licence.

Six per cent of our offshore is under licence.

MR. MURPHY:

Yes.

MR. BOWN:

From that we are producing –

we are going to have three fields producing now, another one producing soon, and

then we have a major discovery.

MR. MURPHY:

From your previous statement

then, what Mr. Hunter was asking about – well, I will say it, the limitless

expanse off the Coast of Labrador, of course.

There is a huge interest up there, of course, in natural gas.

He has to thank his predecessor, by the way, Brian Peckford, for gauging

up interest in natural gas up there.

Those were some of the first major discoveries.

When it

comes to the permits, the bidding wars, I guess you could say, that happen for

exploration in this last year – $554 million was gained on the permits.

Are you saying that was gained mainly on the call for licences that would

have been made, in this particular case, in 2012, four years previous?

It was four years previous to that one, I guess, that they were bidding

on in 2013.

MR. BOWN:

Yes, that one went out in

MR. MURPHY:

Okay.

MR. BOWN:

I will add more to that.

The active interest in that area is prefaced not only on scheduled land

so they know that when these bids are coming, but it is also based on the fact

that we have been out there for a number of years now doing seismic.

MR. MURPHY:

Yes.

MR. BOWN:

We have been making that

seismic available at cost recovery to companies that want to participate.

Actually, it is a result of us being out there as well doing seismic,

demonstrating, and showing. My

team, and the oil and gas team at Nalcor, have been going to geoscience events

where vice-presidents, et cetera, of geoscience and exploration at these large

companies visit making presentations and demonstrating to them that the history

and the story they know of Newfoundland and Labrador is not what they really

think it is, and that is what has been generating the interest.

So,

when you see a bid of $559 million for a single parcel, which is the highest in

our history, that indicates that they have been hearing and listening and they

see what we see.

MR. MURPHY:

Yes, okay.

No, I understand too, and I think that is probably –

MR. BOWN:

As Wes reminds me, he said being adjacent to a discovery does not hurt either.

MR. MURPHY:

Yes, and I think there are

some pretty big advantages to knowing that there is a pooled resource under your

feet, rather than a fractured geology, too, and I think is a better sell.

Can I

ask you a question about the OCMWG – the Offshore Continental Margin Working

Group?

MR. BOWN:

Yes.

MR. MURPHY:

Again, just another

suggestion – I do not know; it may have already been done in government.

Maybe you do not see the need to put it in the mineral industry, but I

scribbled down a little note here next to that particular point that you have

here when it comes to your Energy Plan commitment.

I have wrote down here: establish a mining sector working group for the

same purpose that you would have – obviously to discuss barriers to exploration,

the group was formed, and development in the offshore, including costs,

regulatory modernization, and exploration attraction.

I am

just wondering: Is that an ongoing thing that would be considered for the mining

industry? Obviously there are some

groups that are out there, but I do not know if they have that same purpose or

not.

MR. BOWN:

Before I answer your question I will come back to the Offshore Continental

Margin Working Group and the reason why we created it.

More often than not we hear from the industry, singularly through their

association, through the Canadian Association of Petroleum Producers – CAPP.

We felt

that we were getting a kind of a filtered voice on what was going on in our

industry, so we felt it important that we needed a forum where we could all sit

at the table, leave your ego at the door kind of thing, with each of the

operators or each of the companies who are participating in our offshore where

they could sit and we could have a very frank discussion based on what each

company itself was experiencing and whether there are particular rules,

regulations, practices, programs, et cetera, that needed to be employed or no

longer employed we could use.

With

the mining industry, actually we have a far more open discussion with the mining

association. I take your point and

we will pursue that, but we do not seem to have the same difficulties with the

mining industry as we do with the oil and gas industry in getting the filtered

voice. We get disparate voices

coming from the mining industry. In

managing a department where you have both, it is very clear that it is chalk and

cheese between mining and oil and gas.

MR. MURPHY:

All right, thanks for that.

MR. BOWN:

You are welcome.

MR. MURPHY:

Page 28, a couple of pages

over, the fourth point down on your commitments, “Aggressively pursue refining,

petrochemical, and other value-added secondary processing opportunities.”

This one I think you could say is near and dear to me.

I think that the market is ripe right now for extra refining capacity.

The outage I think in Nova Scotia, the simple fact that people were out

of gas, out of other product at the same time, probably would be reflected

particularly in Atlantic Canada in the strategic terms that we do not have

enough refining capacity. We have

lost the Holyrood refinery; we have lost Dartmouth.

It is obvious that there are troubles in other regions of North America.

government actively pursuing the possibility of a second refinery here in the

Province, number one? Number two,

when it comes to the other requirements that other oil companies look for, they

obviously look for the resource to be handy enough, there is obviously a need

for refinery capacity in North America-wide, though – I am just wondering: How

does government assess that?

Whenever they are required to complete their assessment plans of course and

development plans, all that would be included in there.

Are we close to getting a second refinery, or have there been plans

brought forth by other companies to open up that second refinery?

MR. BOWN:

Some time ago, I think we

were on the cusp of a second refinery being built.

There was a lot of active interest.

It went through environmental assessment.

I think at the time there was a change in fuel regulations in Europe

where there was a large call for clean diesel and it was a kind of niche market

that a particular refinery could fill.

Since

that time, we have seen no interest.

I know that there have been feelers put out, of sort.

I think the environmental assessment will expire in the near future –

WITNESS:

I think it has.

MR. BOWN:

Or has expired –

MR. MURPHY:

Yes, it has.

MR. BOWN:

Thank you.

It has expired. So no, we

have not had any active interest to date.

If I wanted to put it in a little bit of context of how Newfoundland and

Labrador compares to refineries in North America, we do have an advantage in

that we are very close to shipping lanes and access to markets.

The disadvantage that we have is that we are the only refinery in North

America that is still fueled by oil.

So all the process units out at that plant are still fueled by oil, or

what the benefit of this particular company whose has come in and taken over,

SilverRange, and purchased North Atlantic Refinery have actually converted half

of their burners in the units to butane, which has reduced the environmental

footprint at that refinery significantly.

It allowed it to meet its environmental commitments.

would be very difficult, I think, in the current context of refineries that – we

are seeing new ones being built in India, which are an order of magnitude larger

than ones that we have here and refineries that are closed in North America.

There seems to be a consolidation that is taking place.

In the absence of natural gas as a fuel supply, I would see it as a

challenge. It is not a barrier.

I am not saying that it will not happen, but it is a challenge.

MR. MURPHY:

I think that we will have

natural gas here someday.

MR. BOWN:

Yes.

MR. MURPHY:

I think that is a pretty

important backup for any refinery anyway.

When

does that ask happen on the part of an oil company?

Obviously it would be depending on the resources in the ground, how much

they actually find. When would

government actually pursue a second refinery in a case like that?

Does government have a barrier or a line

in the sand that has to be crossed?

What do they have to actually gauge for something like that?

MR. BOWN:

Sure.

I think we have highlighted two commitments.

One is they pursue – the two that are below that, Mr. Murphy, is that

companies that are interested in developing in the offshore that have a project,

they would provide us with an assessment of feasibility prior to submitting a

development plan for a refinery; but, also at the same time, they provide us

with a detailed assessment and feasibility of landing natural gas as well.

prior to submitting the development plan, we have identified to companies that

we would like to see an assessment provided to us before you file that plan with

the regulator.

MR. MURPHY:

Okay.

So the

same thing would obviously happen then, I guess, if there was going to be an

assessment done. If there was a

massive reserve that was discovered off Labrador, for example, would government

step in on any particular case of course like that and see that development plan

happen, or at least see an assessment from a company if they were to do that?

MR. BOWN:

Yes.

MR. MURPHY:

I know there is no finer

time than right now for an oil company to make money.

If they are going to make it anywhere, it is going to be on the refining

end of things, we know that.

CHAIR:

Mr. Murphy, we should go to

a government member now.

MR. MURPHY:

I was just going to say, Mr.

Chair, just to clue up; all my questions appear to be answered in this, so I am

pretty much finished. I thank them

for the answers to the questions that I had.

MR. CROSS:

Thank you, Mr. Chair.

I have

a few questions. Some of them are

in relation to topics of constituents.

In the start, just as a general overview, in the Auditor General's report

there was some discussion about whether the systems were in place to regulate,

monitor, and report on the implementation of the plan as was done.

We have

seen a report for 2015. What

undertaking is there to see this repeated, or what monitoring is ongoing from

here to –

MR. BOWN: We have

committed that, subsequent to the completion of this report, we will continue to

update the Energy Plan. We have

internal monitoring that we will continue to do, and then on a scheduled basis –

which we have not determined yet – we will continue to update on the Energy Plan

commitments.

MR. CROSS:

Okay. So there is no specific time

frame committed to yet, but there will be, we can expect to see.

MR. BOWN: No,

but with the benefit of having this progress report done, it has actually

enabled us to improve our internal monitoring systems as well.

MR. CROSS:

Okay.

I was just looking through one of the tables the Auditor

General had reported on and referred to.

It is with the Energy Plan

summary of expenditures by different

initiatives. It is on page 94 in

here. It was only up to the end of

March 31, I guess for 2013. It did

not necessarily say that, but there were no expenditures in 2014.

I assume that was only observed up to that point.

Are there any report of expenditures for 2014 we could actually see?

MR. BOWN:

Yes. At the end of 2013, I guess,

it was announced that the official funding for the Energy Plan would cease.

MR. CROSS:

Okay.

MR. BOWN:

So there would be no specific allocation in the Budget for the Energy Plan

anymore; however, any initiatives, as we continue to do, are done on an annual

basis and budget allocations are sought on an annual basis.

So since 2013, actually we have spent an additional $2 million on Energy

Plan activities on the petroleum side.

MR. CROSS:

Yes, because 2014 was listed

as a year, there was absolutely no other thing there.

It was tick, tick, tick.

MR. BOWN:

Right; and that is as it relates to the actual Energy Plan accounting.

MR. CROSS:

So that is showing up in

other areas, is it?

MR. BOWN:

Now it is in our operational budgets.

MR. CROSS:

Operational expenditures,

okay.

couple of questions along the lines – and these are sort of conversations

probably with constituents or other people with topics or talk about this over

the last number of months or so.

There has been some upgrade at Holyrood recently with the new piece of machinery

that was bought and brought in. How

does that affect the overall efficiency or the output of carbon gases from

Holyrood? Does it make it more

efficient, a cleaner facility, or –?

MR. BOWN:

The 120 megawatt combustion turbine is for generation only.

So it is a peaking plant. I

will define what a peaking plant is.

The

Holyrood plant is a base-load generation plant.

You load up the three units there.

It generates 475 megawatts when it is at full capacity.

If we get into cold days in January, February, then we start turning on

our combustion turbines or gas turbines.

They run on diesel. That is

higher-cost electricity, so you only really turn them on when you have peaks

that occur in the morning and in the evening.

MR. CROSS:

Okay.

MR. BOWN:

So what this facility has

done is it added greater liability to the system that should we have an outage

in one of our units at Holyrood, or we have an issue with one of the gas

turbines, then we have additional capacity there to improve reliability.

MR. CROSS:

Okay.

I think

part of one of the other questions I have – coming back from that, when you were

talking earlier about wind power and it being short-term excess power and not

reliable to the point that you could not concentrate on it at all times.

In some of the evaluations of cost over the last two or three years – and

we were talking a big whole debate about Muskrat Falls, production of Muskrat

Falls and the link.

The

cost of power – obviously it was not reliable, but also the cost.

Right now there has been some conversation already today in some of the

questions about after the link with the Maritimes is created there, then the

production of wind power, should it be pursued?

Is it able to be added to what is being supplied to outside customers?

Developments of that nature, is that looked at now as something that

would happen privately, or is it still something like Nalcor or the government

would be involved in?

MR. BOWN:

I think government policy at

this stage – again, because our energy warehouse has such great value and great

opportunity, we would be sort of remiss if we did not attempt to try and

capitalize on the benefit of those resources ourselves.

That being the policy for the moment right now, is that Newfoundland and

Labrador Hydro would pursue the development of our hydro wind resources unless

they felt it necessary that they wanted to partner with another party, which we

did on the Muskrat Falls Project with Emera.

The

focus and draw of the Energy Plan; if we go right back to the beginning or up to

60,000 feet, it is very clear that the objective here is to see the development

of our resources for the people of the Province first and foremost.

One of the ways to achieve that is actually to develop it ourselves so

that we receive the long-term benefit from the sale of the electricity.

MR. CROSS:

Okay.

Probably the final input here is a question from someone else and I was not able

to answer it. Currently, if someone

is producing power, the smallest – I think some would prefer it for their own

business use or personal use – they currently cannot sell back into the grid

here on the Island. Will the idea

of that change over the near future or is that a misconception?

MR. BOWN:

There are a number of businesses, such as Corner Brook Pulp and Paper, who

generate power for their own needs.

Actually, through arrangements with Newfoundland and Labrador Hydro, that is our

first draw for reliability on the system now is to take surplus power, or

actually to have them turn down their paper machines so that we can draw on the

electricity. The primary provider,

and sole provider of electricity for sales in the Province to customers, is

Newfoundland and Labrador Hydro.

On a

smaller scale, on a residential scale, we have just announced a net metering

program whereby we would allow individual customers to produce their own

electricity should they feel the need to want to generate their own electricity,

and that anything over and above what they needed, then they would be able to

sell that electricity back to the grid.

MR. CROSS:

Okay.

I am

all right now, Mr. Chair.

Thank

you.

CHAIR:

Mr. Osborne.

MR. OSBORNE:

(Inaudible) last of the

questions I was asking about the priorities and targets for the energy

conservation program and the plan that was supposed to be developed by March

2008. I think it was developed in

March – sorry, in 2011.

Just

looking at that, government was going to consider the implementation of a rebate

program to encourage the purchase of hybrids or other fuel efficient cars and

SUVs. We did not see that either in

March of 2008 or in the 2011 plan by government.

Can you give us an update on that particular incentive?

MS JANES:

The analysis was done on the incentives and calculating what could be provided.

It was not advanced for financial reasons.

It was a quite costly exercise.

To be able to subsidize the vehicles to the extent that they would make

them attractive to individual consumers would have meant a rather significant

subsidy. So at that time government

decided not to proceed with that.

Government did look at, as well, the prospect of trying to incentivize people to

buy smaller vehicles – well, not smaller, but more energy efficient, defined as

being three litres or less. When we

looked at the analysis of that, the penetration of those vehicles was increasing

anyway and constituted over 50 per cent of vehicles purchased in the Province.

So the concern about moving in that direction was if one offered a

subsidy to try and get people at the margin to purchase smaller vehicles, there

would be a very heavy dead weight burden.

other words, people who were going to buy them anyway would also be able to

avail of the subsidy and that would be very cost prohibitive for government.

So the analysis was done, but in the final determination government

decided not to actually put in place a subsidy program.

MR. OSBORNE:

Okay.

Government were going to investigate ways to influence vehicle choice, such as

sales tax rebates or scaled annual licence fees for vehicles based on energy

efficiency. I would imagine hybrids

would have been included in that as well.

There has not been a big movement towards hybrids.

Has that now been taken off the table as well?

MS JANES:

In 2012, government launched

its Turn Back the Tide campaign, which was an awareness campaign to try and

increase information and awareness on energy efficiency.

That did include information to consumers about how to make fuel

efficient choices when purchasing vehicles.

There

was also work done to look at if there was a desire to change the Motor Vehicle

Registration system and change the fees associated with that, work was done on

that. Government decided not to

proceed with that. I suppose these

things are always on the table if there is an appetite to look at them again and

revisit the numbers and crunch them.

I think one of the challenges in recent years has been fiscal

constraints, which I mean they have not been the top priority to advance given

all the priorities.

MR. OSBORNE:

Okay.

Thank you.

Government were going to investigate the adoption of advanced vehicle energy

efficiency standards. We have not

seen anything in that regard, or have not heard anything from government in that

regard. Can you give us an update

on that?

MS JANES:

Yes.

The provinces and territories worked with the federal government and the

federal government brought in place standards for light duty vehicles and

heavier vehicles a few years ago.

They were designed to harmonize with standards in the US.

So there are standards now in place to improve the fuel efficiency of new

vehicles coming on the market.

The

Province is clearly a party to those discussions, but has a very small market

with half a million people. Alone

we cannot influence those standards, but by working in concert with other

provinces and territories and the federal government, it has been possible to

make progress on that area.

MR. OSBORNE:

Okay.

Thank you.

The

Province identified aircraft, fishing vessels, ferries, and freight

transportation as another way to reduce our carbon footprint.

They said there are ways that the Province could act to reduce energy

consumption in this sector. Could

you tell us what specifically has been done in these sectors?

MS JANES:

I cannot speak to the

details, I am afraid. The

Department of Fisheries and Aquaculture has done work on energy efficiency

working with small vessel owners to try and promote fuel efficient practices.

believe the Department of Transportation and Works has incorporated fuel

efficiency into its tenders. When

it goes out with an RFP for a new ferry, the way an assessment is done it does

take into account how fuel efficient a vessel is.

That has been incorporated.

believe also when the water bombers were acquired by government, fuel efficiency

was a consideration. They were some

of the sort of more leading pieces of technology.

That was incorporated into those purchases.

I am afraid I do not know in fine detail about that because that is a

policy from the Department of Transportation and Works, but that is my

understanding.

MR. OSBORNE:

Okay.

Another

policy action of the government was to, “Explore the introduction of commercial

and residential lighting conservation and insulation enhancement programs.”

I know that Newfoundland Power has a program in place, but I do not

believe they provide insulation for homes with oil heat, for example.

The Province has not fulfilled that policy action.

I am just wondering what the status of that is.

MS JANES:

You are right, that is a gap

in programming. The utilities,

through takeCHARGE, do provide rebates but you have to be an electricity

customer. When I say electricity

customer, sensibly you have to consume sufficient kilowatt hours a year, that

you extensively have electric heat in your home.

That does mean if you use fuel oil, you cannot avail of those programs.

Government did look at that and plugging that gap.

There were discussions with the utilities about what that could look

like. One of the things that was

considered was if government could provide dollars to finance a program of that

nature, that it could be administered by the utilities because they already had

a lot of the administrative structure to do that.

Unfortunately, again, due to fiscal constraints, that was not a proposal

that government chose to advance.

MR. OSBORNE:

Okay.

Government was also going to investigate other ways to encourage consumers to

reduce their total power usage. I

have not seen anything in this regard.

In other provinces we have smart metering technologies that government

provide subsidies or incentives for.

We have

a company right here in our very own Province that produces or is innovative

with smart metering and we are not even supporting that company, to give an

example. There are other provinces

that support that particular company in providing smart metering.

Can you elaborate on why we have not done anything in that regard?

MS JANES:

There is a pilot program that is underway at the moment.

It is an energy conservation pilot program.

It was launched last year.

It is being run over two fiscal years.

So, last fiscal year and this fiscal year.

The purpose of the program is to try and look at whether the provision of

technology to give consumers more information on their energy consumption in

real time, so as they are consuming the electricity, would lead them to conserve

more energy and make savings on their bills.

The

program was launched last year.

There are 750 households participating in it.

There was a tender for the technology to go into the houses.

The technology being supplied is Blue Line Innovations technology, that

hand-held meter. So, 250 households

have received this real-time meter.

They are also getting regular information to supplement that on ways that they

could be conserving; 250 other households have just the meter but they are not

receiving any regular information and reminders about the importance of energy

conservation. The remaining 250

households are just getting information but they have not received the Blue Line

Innovations device.

Over

the course of a year the pilot is being run, and at the end of that we are going

to evaluate the extent to which the provision of the technology or the provision

of the information actually did generate a change in behaviour.

So that year will come to an end at the end of this calendar year, that

year of deployment in the field.

The participants are drawn from across the Province.

After that, the impact will be evaluated.

So the evaluation should be complete within this fiscal year, by the end

of March 2016. That can then be

used to inform a consideration about next steps.

MR. OSBORNE:

Okay.

I am

delighted to hear there is a pilot project.

Considering government released this plan in 2007 and we are almost eight

years later, it is too bad that it is not developed on a more broad level.

Residential consumers leave a very large footprint and any ways we can advance

energy conservation at the residential level – I know that in Nova Scotia, for

example, they do have programs – and in other provinces, I will not just single

out Nova Scotia. There are other

jurisdictions across the country that will look at insulation for basements,

rebates for that, heat recovery systems.

We do not offer that in this Province.

They do in other provinces.

Solar

hot water equipment, green heat projects, zero per cent financing in lieu of

rebates, if you wanted to go that avenue, in other jurisdictions.

The list goes on and on, new doors, ENERGY STAR appliances.

There is rebate for the purchase of appliances.

There are rebates for using energy in non-peak hours in other

jurisdictions. We have not looked

at that.

For a

plan that was released eight years ago, we are really behind the times.

Can you give me any indication as to why we have not taken the lead of

some of the other provinces? Even

though it is in the plan and they talk about these things and talk about

advancing some of these measures, none of that has been done.

MS JANES:

I think the focus here in

the Province has been on trying to raise awareness and increase understanding

through that Turn Back the Tide campaign.

The Province-wide campaign on energy efficiency and climate change which

tried to provide advice and tips to households, businesses, and communities

about the ways that they could help to conserve energy.

On the

other things you mentioned, you are right.

There are a number of those that do not exist here in the Province.

Some of them are being advanced by the utilities.

So the utilities have done a pilot project on trying to shift people's

energy consumption at peak time.

That project, I think, took place the end of last year.

It concerned hot water consumption and whether they could send a price

signal, and through that price signal, encourage consumers to conserve energy at

times of peak demand. I am afraid I

am not familiar with the outcome of that pilot.

I am not sure if they have released it yet, but they have done that.

The

utilities, through takeCHARGE, also have some programs for appliances, goods,

vouchers, and tokens. That money

off is available to both homes that are electrically heated and oil-fired homes.

Those are programs that are run through the utilities.

They are not provincial government programs.

MR. OSBORNE:

Okay.

Just

one more question, Mr. Chair, and then I will free our witnesses from any

further harassment by myself.

I know

Newfoundland and Labrador Housing had a program where they provided energy

efficiency repairs. There were

1,000 people covered under that program on an annual basis.

I believe that was cut back to 500 people, which is very unfortunate.

The

other aspect of that is that it is helping lower-income families with a

household income of – I believe $32,500 was the cut-off.

Correct me if I am mistaken.

There is very little in incentive for families with an income above that

threshold, other than a program offered through Newfoundland Light and Power,

which again does not involve homes with oil heating.

That is a rebate on a thermostat or a rebate on a light bulb.

It is very, very little to make their homes more energy efficient.

there anything in the works, concrete plans to help, on a broader range,

families across the Province to make their homes more energy efficient?

MS JANES:

Different possibilities have

been analyzed, but at this point I am not aware that any are being advanced for

implementation.

MR. OSBORNE:

Okay.

Thank

you.

CHAIR:

Government members, do you

have any questions?

MR. PEACH:

Yes, I just have a couple.

That

program Tom was talking about, is that back up to 1,000 now again?

That is not at 500. Now that

is back up to 1,000, isn't it?

MS JANES:

Yes, that is right.

That is the program called the Residential Energy Efficiency Program,

REEP.

MR. PEACH:

Yes, REEP.

MS JANES:

It is the one that was

started under the Energy Plan and Charles referred to it earlier.

It is still running. It was

cut for one year in half, but then the funding was re-established back up to the

full amount. The number of

recipients is at 1,000 a year.

I think

to date about $15 million has been spent through that program, but as Mr.

Osborne said, it is only for families who are on a low income.

You have to be below the income threshold – I believe the threshold that

you outlined is correct – to avail of that.

MR. PEACH:

The other question I have –

and I do not know if Charles can answer or not – with regard to the Bull Arm

site, is there any estimated time now, or is there any set time when that

project is finishing? I know it has

been at its peak, it has been down, and then back up again, now down again.

The numbers are going down again now.

Can you give us an update on that, please?

MR. BOWN:

Sure. I think the target is still

for sail away in 2016.

MR. PEACH:

In 2016?

MR. BOWN:

There will still be some activity at the site until early into 2017, cleanup.

The plan right now, barring any change in schedule, is sail away in 2016.

MR. PEACH:

So it is pretty much on

schedule as to the dates they said?

MR. BOWN:

Yes.

MR. PEACH:

Okay.

Thanks

very much.

CHAIR:

Mr. Murphy has another

question.

We have

gone for a couple of hours and ordinarily we stop after an hour and a half.

I thought we might be nearing the end so I let it run on for a couple of

hours. If members would prefer to

take a break, if you think you are going to be much longer, then we can do that

and come back.

thought the witnesses were handling the questions quite expeditiously, and I

would give them the choice of having a coffee with us afterwards, or getting

ahead of the traffic by an half an hour or so.

It would be their call.

With

that in mind, I will go to Mr. Murphy.

MR. MURPHY:

I only have one question,

Mr. Chair. As regards to the

cut-off, Ms Janes, you referred to the $32,500 level.

Mr. Osborne is right on the number.

That number has been there now for a substantially long time, for as long

as I can remember. I think it goes

back probably to 2008, 2007 or so.

That is

not geared for inflation or anything.

The number, I know, comes up from Canada Mortgage and Housing

Corporation. That is the number

they have come up with. Like I

said, it has not been updated, and I feel that it should be updated, simply on

the fact of inflation costs, number one; and, low-end salaries being number two.

I am

just wondering, what is the process for that?

Why did they stick with that $32,500 number?

If you can get us an update as to the reasoning why they are still

sticking with that $32,500, it would be great.

MS JANES:

Absolutely. I am happy to speak to

the Housing Corporation to ask. I

am not sure whether they have evaluated that or not, but I can certainly inquire

and get back to you.

MR. MURPHY:

Sure, because a lot of

government programming reflects on that $32,500, that CMHC number.

It is old and if they are going to be drawing a line in the sand, it

should be updated.

Thank

you for that. That is it.

CHAIR:

I think Mr. Osborne has a

follow-up question.

MR. OSBORNE:

(Inaudible).

CHAIR:

If we cannot handle it

quickly, then we really should break in fairness to everybody, or we should clue

up.

MR. OSBORNE:

No, I am done with

questions. I wanted to thank our

witnesses here today for your co-operation.

I know some of the questions were tough, some were not, but I appreciate

your time.

CHAIR:

Usually we go to Mr. Paddon

and ask him if we have missed any areas, or if there is something we should

pursue a little further, if he has any observations.

MR. PADDON:

No, I think when you look at

the report and the size of it, and the one recommendation which appears to have

been followed through on, through the release or impending release – I do not

think it has been released yet? Has

the update been publicly released?

WITNESS:

In May.

MR. PADDON:

From that perspective, I am

content. It is really up to

individuals then to be able to evaluate the progress that has been made through

the Energy Plan. I did not think it

was my role to be arbitrating whether it has been implemented or not.

It is really public information that should deal with that, so I am

satisfied.

Thank you.

CHAIR:

Mr. Bown, did you want to

have any closing comments?

MR. BOWN:

No, that is fine.

I appreciate the questions.

As usual, I always appreciate the opportunity to share the good work that we

have been doing – and my staff especially – since 2007 since we implemented this

plan.

Thank

you.

CHAIR:

In that case I join with my

colleagues in thanking you for coming for the afternoon.

I think it has been quite interesting for people who follow energy

issues.

I do

not know if any of the members have anything to say.

If not, we will have a motion to

adjourn.

CLERK:

The minutes.

CHAIR:

We need the minutes from the

September 9. Do we have a motion

for the minutes?

Moved

by Mr. Cross; seconded by Mr. Murphy.

All

those in favour, 'aye.'

SOME HON. MEMBERS:

Aye.

motion, minutes adopted as circulated.

CHAIR:

We will meet 9:00 a.m.

tomorrow.

The

Committee adjourned.