Natural Gas - Related Articles
Heritage Gas Wants To Waive Fee
Heritage Gas wants to make it easier for new home builders to sign up for gas. Finance VP Christopher Smith has sent a letter to the Nova Scotia Utility and Review Board asking to waive a $500 service line deposit fee for certain customers until the end of the year. Heritage Gas now collects the fee from all residential customers and refunds it after 120 days when the service is connected. If service is not hooked up, the customer forfeits the fee. "The purpose of the deposit is to sort of hold their feet to the fire," said President Jim Bracken, explaining his company has to incur a cost to get the gas to front doors.
He says the fee is a bit of a nuisance for residential builders because they are building homes that have natural gas furnaces in them and have no opportunity to use any other fuel source. "There really isn't the need for the deposit." Will dropping the fee encourage more builders to install gas? Probably not, said Bracken. But he points out builders who commit to gas are spending more than cheaper alternatives. And if Heritage Gas can help cut down on a small part of the cost it's seen as a good thing.
If the fee waiver goes according to plan, Heritage Gas expects to make it permanent. Heritage Gas is on track to add 500 new customers in 2012, bringing the total number of customers to 4,000. Recently, Heritage Gas has placed much more emphasis on expanding its network into new home communities.
By Caroline Wood
Heritage Gas Cool On Warm N.S. Winter
Operating Income Hit By Above-Normal Temperatures
It is the winter of discontent for Heritage Gas Ltd. as balmy weather lowers the utility’s operating income. “We’ve had warmer than normal weather and temperature does have some impact on gas use,” Heritage Gas president Jim Bracken said Thursday. “As you can imagine, a lot of gas gets used for heating homes and buildings. So we did have a lower throughput than we expected and that does have some impact on our bottom line.” AltaGas Ltd., the parent company of Heritage Gas, released its fourth-quarter and last year’s results. The natural gas processor and pipeline operator posted 15 per cent higher earnings and a net income of $29.9 million, up from $26.5 million a year ago. Yet the utility branch of AltaGas reported a drop in operating income in the last quarter of last year compared with 2010, citing, in part, warmer weather for its utilities in Alberta and Nova Scotia. However, the company noted that this was partially offset by rate base growth at Heritage Gas.
The Nova Scotia utility has been aggressively expanding its system of underground pipes. “We’re growing about 20 per cent a year,” Bracken said. “That is putting more mains and services in the ground to serve more customers.” Because the regulated utility is allowed to earn a return on capital invested, the more pipe that goes in the ground, the higher the earnings. “It does drive our earnings to have more assets in the ground that are useful and connecting more customers to gas.” In fact, despite a slightly lower bottom line due to the warmer weather, Heritage Gas has reached a milestone. The utility’s revenue deficiency account, an account where Heritage Gas has stowed a shortfall since it launched in the province, is no longer growing. “It’s actually starting to turn the curve in 2012, so it will be declining in future years,” Bracken said. “The account was established in the early days of business so we could charge less for the service than it actually costs and the difference ended up in the deferral account.”
As for the natural gas utility’s expansion to Oxford, “it’s full speed ahead,” with construction slated to begin as soon as the ground is thawed. “Oxford Frozen Foods is the big customer that has made the large expansion possible, but on the way, we can pick up a few others. It looks like we can connect a few other smaller customers (both commercial and residential) along the route as well.” Meanwhile, Heritage Gas is also set on delivering natural gas to a Halifax neighbourhood hooked on oil through a pilot project with Halifax Regional Municipality. “I think we’re close to identifying which area we will choose to target. We have a list of three of four potential areas and the group needs to have another meeting to (choose the area).” Bracken is optimistic about this year, noting that the utility is planning to add roughly 600 customers this year. “It’s shaping up to be exciting and busy year.”
http://thechronicleherald.ca/business/71408-heritage-gas-cool-warm-ns-winter
JIM BRACKEN ON HERITAGE GAS 2012 OUTLOOK
Getting HRM schools hooked up to natural gas is the major task for Heritage Gas in 2012, says President Jim Bracken. "They represent a fairly significant part of our growth," he said, adding Heritage Gas has been working with the Halifax Regional School Board and plans to hook up a number of schools in the Halifax area in 2012. He declined to reveal which schools these will be until the deals are finalized. Heritage Gas expects to add 500 new customers in 2012, putting it over 4,000 by year end, says Bracken. The company has expansion plans for the Halifax peninsula and mainland, Bedford and Dartmouth with a combination of infill and main extensions. Heritage Gas plans to build more than 30 kilometres in 2012 with a construction budget of around $20 million - less than the $30 million spent in 2011, the company's biggest year ever. "We are going to try to get down Bluewater Road this year," said Bracken. "It's been in our longer-term plans for some time, and we think this year might be a good time to go down that road." He says the street has many commercial customers Heritage would like to see convert to gas - chief among them the Chronicle Herald printing building. Bracken says the company hasn't had serious discussions with the Herald yet, but it has been identified it as a target for the sales team. "It's the typical chicken and egg thing," he said. "We want to get a reasonable degree of commitment from customers before we commit to build, but you want to have plans to build so you can convince customers it's going to be there for conversion."
The company has about 3,500 residential and commercial customers and expects to end the year with about 50 more for a total of around 650 new customers in 2011. Bracken says the company is averaging growth of around 20% per year. "I don't know of any other utility that is growing as quickly as we are." Last year was a big year for securing larger customers. Heritage Gas hooked up Sysco Salt, Farmers Dairy, and largest customer Dalhousie University. Now that it has all the universities and hospitals in the area on natural gas, there are few large anchor customers left to go after. "Though we don't see many more really big individual customers, there is still very significant growth because of extensions and infill," said Bracken. Its most significant project in 2012 is the three-kilometre line extension to CFB Shearwater. Dora Construction, a Dartmouth company headed by Donald MacDonald, was awarded a $14.3-million contract in early November to construct a new steam central heating plant at the CFB Halifax-owned Shearwater. Shearwater, located on 640 hectares of land, also includes 300 residential housing units that are heated by individual oil tanks. The plant, which will service 85 buildings, will consist of a new 13,000-square-foot building that houses three new boilers.
By Gillian Cormier
Natural Gas Provider Talking to Large Energy Consumers in Area
Feb 10th-TRENTON – The hope of having natural gas in Pictou County is being rekindled.
Jim Bracken, president of Heritage Gas, the province’s only natural gas provider, said the company has been in negotiations with several large electricity consumers in the county. Bracken said the cost to build the infrastructure is high and so an anchor customer is needed to make the investment.
“We have to find a large energy consumer to justify the economics,” said Bracken. He said for the past month there have been discussions with Nova Scotia Power over the matter. Bracken said NSP has become more interested in natural gas because the price is low and is expected to stay that way in the future. Also, the federal government is proposing regulations to decommission coal-fired power plants once they have been in service for 45 years. The Trenton was built in 1969 and was upgraded in 2009. A second generating unit was added in 1991. David Rodenhiser, spokesperson for NSP, said there have been discussions with business leaders in Pictou County about natural gas. He said the Trenton plant does have a potential for natural gas, but the corporation is seeking the best business case for its customers. “I can’t predict how close we are to an agreement,” said Bracken. “But we will continue to work very hard to get natural gas in Pictou County.” At a county council meeting Monday night, Warden Ronnie Baillie said that natural gas is likely to be available in the near future.
PROPOSED NATURAL GAS STORAGE PIPELINE
‘A REALLY GOOD PROJECT FOR NOVA SCOTIA'
A proposed natural gas pipeline could bring extra storage for the green fuel to the province. Alton Natural Gas Storage L.P. held an open house here last night to give the public a chance to ask questions and see where the project is at. "It's a fascinating concept that probably needs explaining to the general public," said Frank Dominey, who was there with his wife, Yvonne, from Fort Ellis. "I've been following natural gas since the project started." The company is proposing a 10‐kilometre natural gas pipeline from an underground storage facility near Alton to the existing Maritimes and Northeast Pipeline Halifax Lateral. David Birkett, president of the Alton project, said the proposal is almost at the stage where the company will submit its environmental assessment to the province. "Before the end of December we are hoping to submit the environmental assessment for unofficial review," said Birkett. "We've met with the Department of Environment and worked on sensitive areas. We're hoping to file the actual assessment by the end of January." If the assessment is approved, the next step for the company is to apply to the Utility and Review Board to construct four salt caverns. The company's environmental assessment for the underground caverns was approved in 2007. The caverns will be able to hold one to two billion cubic feet, or BCF, of natural gas. "This is a really good project for Nova Scotia," said Birkett. "It will help in the long run. It's a long‐term management tool." Birkett said there are benefits of having natural gas in a storage facility. "It will help day‐to‐day. It will help companies, such as Heritage Gas, and large consumers manage their gas supply." He said most of the gas consumption is over a three‐month period in the winter, which is when gas is more expensive. "If you have it in storage in the summer, you can supply it to your customer then."
While the Domineys don't use natural gas, they have no objections to the proposed pipeline. "The way it is now with the environmental regulators, they have a good eye on them to make sure things are engineered
properly," said Frank. "It will be good for the economy down the road too once it gets online," added Yvonne.
The proposed pipeline has a selected route from the caverns between Stevens and Brentwood roads, over the Stewiacke River and Cloverdale Road. It crosses the north end of Jameson Road before meeting up with the Maritimes and Northeast Pipeline Halifax Lateral near Stewiacke Road.
BIDDER LIKES GAS & NEWPAGE HAS GAS ACCESS
Stern Partners, one of the two bidders vying to run the NewPage Port Hawkesbury paper mill as a going concern, has a history of upgrading energy efficiency programs in its mills. And the company's thrust has been to use natural gas as the main fuel ‐ something NewPage already has access to. After 15 years as a practising lawyer, company president Ron Stern moved into the business world. Stern and a team of nine other professional now head Stern partners. The firm owns the first and only paper mill in Alberta, Alberta Newsprint Company, which went online in August 1990 in Whitecourt. The mill has 211 full‐time employees, producing 269,000 tonnes of paper a year. Since 2008, the company has implemented 35 energy efficiency programs ‐ saving $2.2 million a year. The company has a 10‐member energy team focusing on efficiency. Alberta Newsprint uses natural gas to power the mill and has cut its consumption in half in the last decade ‐ saving 500,000 gigajoules a year. Stern bought another mill ‐ Oregon's West Linn Paper Company ‐ in 1997. The mill makes coated paper on three machines. According to its own sustainability report ‐ the Oregon mill's electricity use per tonne of paper has dropped steadily over the last five years. Its energy use is a mix of 7% hydro power, 9% coal, and 83% natural gas. (Other sources accounted for the final 1%.)
A major factor in NewPage's financial trouble is its power consumption. The mill is Nova Scotia Power's biggest customer, eating up $100 million worth of power every year. The NewPage mill is hooked up to a lateral off the Maritimes & Northeast Pipeline. Company documents show the mill used about 10,000 cubic metres of natural gas in 2008. The paper mill business hasn't always worked out for Stern. In 1994, his Belgravia Investments stepped in to reopen a supercalendar mill in Sault Ste. Marie. The new owners ‐ with government help ‐ reportedly invested $50 million in energy upgrades for St. Mary's Paper. Stern was executive office in 2006 when the mill filed for CCAA protection. He resigned the next year and the mill was sold. Stern Partners also owns retail, packaging, real estate, packaging and horticultural companies. He's chairman and CEO of FP Newspapers, a major shareholder of the Winnipeg Free Press and the Brandon Sun newspapers. Eighty per cent of the company's newsprint is bought from Stern‐controlled Alberta Newsprint.
HERITAGE GAS RATE HIKE APPROVED
Heritage Gas has been granted its fifth distribution rate hike since the company was awarded the natural gas franchise in 2003. The newest increase ‐ an average of 8.25% on the delivery portion of customer bills ‐ brings the delivery increases to around 25% in the last eight years.
This amounts to an extra $25 a month for customers, or an average of 3% per year, says president Jim Bracken.
The Nova Scotia Utility and Review Board approved a settlement agreement Thursday, allowing an 8.25% price increase on the cost of delivering natural gas in 2012. The board also approved average rate increases of 6% for 2013 and 3% for 2014. The increase will add about $6 a month to residential customer bills. Large commercial customers, such as apartment buildings, will see their bills increase about $163, or about 2% of their total bills.
"Natural Gas still represents incredible value for customers," said Bracken. The natural gas company reached a settlement with the consumer advocate and Dalhousie University, its biggest customer, in October. The settlement would see Heritage Gas return on equity lowered from 13% to 11% ‐ compared to the 12.75% in its application. Philip Fraser, president and CEO of Killam Properties, testified he felt the ROE was excessive at 11%.
The board also ordered Heritage Gas to prepare an affiliate code of conduct to govern its transactions with owner AltaGas. "(AltaGas), an affiliate of Heritage, is providing operational and financial services to Heritage as per the agreement between them. The board's concern is the reasonableness of these costs and whether an outside agency can provide the same services more economically to its customers," said the URB in its decision. The board has previously ordered an affiliate code of conduct for Nova Scotia Power Inc., which regularly contracts parent
company Emera Inc.'s subsidiaries for NSP work.
THE RISING PRICE OF POWER
Notwithstanding Canada's rejection of the Kyoto targets, Nova Scotia, like many jurisdictions, has established goals (http://climatechange.gov.ns.ca/doc/ccap.pdf) for reduction of greenhouse gases (GHG).
The goal of reducing annual GHG by five megatonnes by 2020 will have to be largely achieved in electricity generation.
Most of Nova Scotia's electricity is presently generated by burning coal.
Replacing it with a renewable source such as wind, tidal, or hydro creates a 100% reduction in GHG for that amount of power. But there is another option. New natural gas fired plants reduce the GHG from coal by about 60%. So, replacing 10 units of electricity from coal with gas has the same GHG benefit as replacing six units of coal-generated electricity with a renewable source.
Emera Inc. has proposed a powerline to bring hydroelectricity to Nova Scotia all the way from Muskrat Falls in Labrador, and to provide through transmission to New England.
It is likely that the Nova Scotia Utility and Review Board will be asked to consider this request in 2012.
Here are some factors that might be worthy of consideration:
Emera has stated that the hydro project will be considered if the price is competitive with wind projects. But that price might be close to double the price of newly built gas-fired production.
Gas generation can be built in increments which, together with wind, replace coal plants when they reach the end of their useful life, and have been fully paid for.
By contrast, the powerline will bring on a very large amount of power at once and will require coal plants to be shut down prematurely. The cost of writing off these assets will be an additional charge to power customers.
Replacing all of our coal plants (once they have been fully paid for) with gas and wind power will in due course far surpass the greenhouse gas reduction target.
As well, the slower timetable allows for the possibility of a viable and cost competitive tidal technology and the associated jobs to be developed. We will be much better off with renewable energy from local tidal power than distant hydro, to which we have a 35-year commitment.
Higher power costs are not only a burden on residential customers. They also threaten jobs, particularly in the forestry and manufacturing sectors.
Building and running gas-fired plants or tidal installations will create far more sustainable employment for Nova Scotians than laying a power line for a plant in Labrador.
Some might argue that the price of hydro power will not go up while the price of gas might. But it is generally acknowledged that new gas discoveries and extraction technologies have added a hundred year supply to proven reserves.
The prevalence and diversity of these new sources and the absence of barriers to competition mean that prices are likely to persist at close to the cost of production.
If gas prices were to nevertheless rise, the royalties to the government of Nova Scotia from the Sable natural gas project and Deep Panuke, as well as new discoveries, would also grow.
These royalties would provide more money for health care, education, tax reductions, or other public purposes. Allowing well-regulated exploration and recovery of natural gas in the province can create well-paying jobs in rural Nova Scotia.
The gas would provide energy security and be close to the existing pipelines for gas.
Given those factors, one might expect the Emera proposal to have difficulty. But in fact, there is substantial risk that it will be approved, and it will be the fault neither of Emera nor the URB.
In addition to the entirely reasonable requirement for reduction in GHG, the province has a requirement (http://www.gov.ns.ca/energy/resources/EM/renewable/renewable-electricity-plan.pdf) that 25% of electricity come from renewable sources by 2015 and 40% by 2020.
As part of its process, the URB will look at alternatives, including transmission from Quebec, which might be more cost effective.
But any alternative, even one that reduces GHG by the same amount, creates more jobs, and saves power customers money, cannot be considered because it will not meet the entirely arbitrary and environmentally unnecessary goal for energy from renewable sources.
Government policy should require reductions in greenhouse gas emissions from electricity generation. Within that constraint we should choose whichever options minimize power costs and maximize employment.
The 40% renewable energy requirement is a recipe for high cost power, lower living standards, and job losses.
FLOATING PIPELINE CO. GETS TRANSPORT CANADA OK
Floating Pipeline Company Ltd could soon be transporting natural gas to customers in Canada.
The Halifax-headquartered company, which manufactures transportable storage systems for compressed natural gas, recently got the green light from Transport Canada to use its technology in this country.~
FPC manufactures 42-inch diameter containers in Saint John, N.B.. The containers are fastened to a truck chassis and are capable of carrying up to 280,000 cubic feet of compressed gas from a stranded gas well, distribution line or a pipeline, to industrial customers.
FPC has been working with partners in Peru, Thailand, Colombia and the Dominican Republic for about five years. In some of those markets, FPC partners with a company on the ground that transports the gas from point A to point B.
But after millions of dollars and almost two years worth of paperwork, FPC has special permit under the Transport of Dangerous Good Act for its technology from Transport Canada.
Expanding beyond manufacturing into transportation in Canada has always been part of the plan, said FPC president and founding partner Len Thompson.
"This will have a significant impact on the company from a transportation perspective and a manufacturing perspective. It fills one of the main strategies we launched the company on," said Thompson.
"We have a number of initiatives across the country that we are in the throes of putting together. Some in Central and Western Canada, some in Atlantic Canada."
He said the company hopes to have its first Canadian project announcement in a number of weeks. FPC would hire a trucking company, and Thompson is hopeful that trucks will be on the road before the end of the year.
"Basically what we want to do is provide gas to potential stranded users," he said.
Stranded users could include a hospital or a manufacturer that is using higher cost liquid fuel and is not connected to a pipeline.
Thompson added that because FPC is the only Canadian-based manufacturer of this type of technology, it has a competitive advantage.
In addition to Transport Canada approval, FPC has approval from the American Bureau of Shipping and Lloyds Register for its C340 units. The company expects to have approval from the U.S. Department of Transportation by mid-fall.
Transporting natural gas in containers is being done in many areas throughout the world and to a small degree, in North America.
But if the price of natural gas stays low and oil prices remain high, the market for transported compressed natural gas is poised for growth.
"The reality is in certain parts of Canada, there's just not enough population or there's not enough demand to put those pipelines in the ground. So what this opens up is opportunities to move the gas to where there's a demand," said Alicia Milner, president of the Canadian Natural Gas Vehicle Alliance.
CanGas in Alberta is one of the only other companies in Canada transporting compressed natural gas. But CanGas does not do its own manufacturing.
FPC employs 25 people in New Brunswick and six engineering and accounting staff at the head office in Halifax.
DRAFT COAL REGULATIONS COULD COST NOVA SCOTIANS
A federal plan to retire most of Canada's coal-fired power plants by 2030 claims the impact on Nova Scotians would be minimal. But the province fears it would cause enormous costs for consumers and businesses.
The federal departments of Environment and Health published the long-awaited draft regulations on coal-fired plants over the weekend.
The plan would force old plants in six provinces to close 45 years after they were commissioned.
Any new coal plants would have to match the greenhouse gas emissions achieved by high-efficiency natural gas generating stations.
Federal government estimates show that would lead to cumulative cost increases in Nova Scotia amounting to $216 million.
The average residential power bill would rise by $1.20 per month. Industrial customers would also pay more, but the draft regulations describe the likely increase as small.
"For example, it is estimated that for pulp and paper and chemical sectors, the cost increase of a 16-year period would be about 0.1% of total industry costs," the document says.
Paul Black, the premier's office policy director, said the province does not believe those estimates because they are based on assumptions Nova Scotia considers to be false.
"It is extremely likely those figures would be very substantial," Black said Monday.
"North of $1 billion would not be histrionics."
The federal plan assumes no investments will be stranded when plants reach a proposed mandatory retirement age of 45.
But that appears to be overly simplistic. Plants in Nova Scotia have been extensively refurbished, with about $100 million invested in the past two years.
Nova Scotia Power Inc. will have to recover those costs from ratepayers, whether or not the plants are still in operation.
Black said the cost of building new natural gas-fired power plants could be high in Nova Scotia. That would expose the province's ratepayers to increases in gas prices.
Under the draft regulations, NSPI would have to phase-out six of its eight coal-fired units. That accounts for 952 megawatts of generation capacity - 53% of the province's total.
Point Aconi would be the only coal-fired plant left in operation.
The draft regulations spell out retirement dates for old plants based on the year they were commissioned, regardless of past refurbishment.
In the case of the Point Tupper generating station, that means the 45-year retirement is reckoned from its opening in 1973, not its conversion from oil to coal in 1987.
The policy says provinces might be allowed to close newer plants in some instances if it makes more sense to keep older ones in operation longer.
If Nova Scotia does not make that kind of swap, the first coal unit to close would be at Trenton, in 2016.
Ottawa says it might consider equivalency agreements with provinces that plan greater cuts to greenhouse gas emissions than are laid out in the coal power policy.
Black said the federal government should recognize that Nova Scotia has legislated a more stringent cap on greenhouse gas emissions than the coal policy contemplates. It's moving toward targets with policies mandating the use of more wind and hydro energy.
He said some arrangement ought to be possible. The federal government has promised its policy would not create undue economic hardship for Nova Scotia.
Heritage Gas Filing For Rate Hike
The province’s major natural gas provider is filing for a rate increase. Heritage Gas Ltd filed a general tariff application today with the Nova Scotia Utility and Review Board (NSUARB). Proposed rate increases are different for each customer rate class. The company said a typical residential customer would less than an $8.00 increase in 2012. “The rate increases allow the company to match billed revenues to the cost of providing its service. Being able to recover the full cost of service in rates is critical to the continued healthy growth of the distribution franchise,” said Jim Bracken, president of Heritage Gas. “These rate increases will allow Heritage Gas to deliver more gas to more Nova Scotians at a price that is still expected to be substantially cheaper than oil.” The utilities bills have two components – delivery service and cost of natural gas without mark up. The natural gas charges are not regulated by the NSUARB. Heritage Gas says that its distribution rates have been set at levels that are less than what’s need to recover their cost.
Heritage Gas Seeks Raise
Distributor asks review board for 9.8 per cent rate hike next year
Provincial natural gas distributor Heritage Gas Ltd. is asking the Nova Scotia Utility and Review Board for a 9.8 per cent rate increase in 2012. In an application filed with the board on Wednesday, the company is also asking for a 9.5 per cent increase in 2013 and a 5.6 per cent increase in 2014 to cover gas distribution costs. Heritage doesn’t charge customers a markup on its gas supply costs and said the requested increases would increase total customer bills by 4.3 per cent in 2012, 4.5 per cent in 2013 and 2.7 per cent in 2014.
The proposed increases vary for different customer classes but Heritage said typical residential customers will see an $8-a-month hike in their bills. Company president Jim Bracken said the increases will allow Heritage to match billed revenues to the cost of providing service. "No business can sustain itself by charging rates that are less than its costs," he said in an interview Wednesday prior to filing the application with the regulator. "Being able to recover the full cost of service in rates is critical to the continued healthy growth of the distribution franchise." Bracken said he expects the board, which granted the company a 6.8 per cent rate increase for 2011, will consider the 700-page application at a hearing in October.
Since it began operations in 2003, Heritage has set distribution rates at levels that are lower than required to recover its service costs while it built its system, which now has 3,000 residential and commercial customers.
That revenue shortfall has been deferred to a revenue deficiency account, capped by the board at $50 million, which now stands at about $40 million. The proposed rate increases are designed to pay down that account, which is similar to mechanisms used in other jurisdictions to develop early stage, market-driven gas distribution systems. "We’re phasing in the rate increases so in the first year we’ll narrow the gap between billed revenues and cost of service," Bracken said. "We project that the RDA will peak at $47.2 million in 2012 and with the increases will come down by the end of 2013 to $45.8 million." Provincially appointed consumer advocate John Merrick, a Halifax lawyer, hadn’t had an opportunity to analyze the application Wednesday. He said he will be looking closely at Heritage’s rate of return and whether the proposed increases are "fully justified."
Bracken said a lower revenue deficiency account will give Heritage more flexibility to expand its distribution system, which is now concentrated in Halifax, Dartmouth, Halifax Stanfield International Airport and Amherst. "We see the number of customers increasing by 20 per cent in each of the next three years," he said. And he hopes to be able to expand the system to new markets, including Pictou County and Truro. He recently suggested that Heritage could expand to Pictou if Nova Scotia Power converted its coal-fired Trenton generating station to gas and said his company has also had talks with a couple of large potential customers in Truro.Even with the proposed rate increases, Bracken expects natural gas will still cost substantially less than oil.
Heritage estimates its customers saved more than $30 million in 2010, relative to the cost of using oil.
It said residential customers saved $830, or 35 per cent, in the 12 months ended March 31, 2011, while small commercial customers saved $4,900 or 39 per cent and large commercial customers saved $124,000, or 58 per cent. Its largest institutional customers saved millions of dollars over the same period, Heritage said. A wholly owned subsidiary of AltaGas Ltd. of Calgary, Heritage has invested more that $140 million to build 270 kilometres of natural gas infrastructure in Nova Scotia. It plans to invest an additional $60 million by 2014.
http://thechronicleherald.ca/Business/1248693.html
Halifax Resident Pushes For Gas Hookup
Application says Heritage Gas taking too long to expand service
By JOANN ALBERSTAT Business Reporter
Wed, May 4 - 4:54 AM
Halifax resident Peter Allen has asked the Utility and Review Board to order Heritage Gas to hook his home up to natural gas. (Eric Wynne / Staff)
A south-end Halifax resident is again asking the provincial regulator to help him get his home hooked up to natural gas.
Peter Allen wrote the provincial Utility and Review Board last week requesting that it review the guaranteed rates of return that Heritage Gas, the provincial natural gas distributor, receives.
Allen said Tuesday one of the reasons the Alberta-owned company says the cost of bringing natural gas to homes in his area is too high is because Heritage gets a 13 per cent return on equity and an 8.75 per cent return on debt.
"I certainly think that Heritage Gas, its investors, they deserve a return on their investment," he said in an interview. "But I think anybody who’s guaranteed 13 per cent today is really living in la-la land."
Allen said he has yet to receive a response from the review board.
Allen and another south-end resident complained to the board last year that Heritage Gas was taking too long to expand its pipelines in its franchise area of peninsular Halifax.
The regulator dismissed the complaints in a decision released in December.
The board did order Heritage Gas to review the way it estimates costs for specific areas, using alternatives such as different installation techniques and the economics of a large-scale installation, and to file a report by the end of this month.
Allen said he thinks returns of 9.5 per cent on equity and 5.5 per cent on debt would be more reasonable.
"If we reduce those rates down to values that, I believe, are still absolutely reasonable in order for Heritage Gas to make a good return on their investment, then the economics change dramatically and suddenly now it’s economically feasible to move natural gas to the people of Nova Scotia, who own the resource."
Two other south-end residents have also written the board supporting Allen’s application.
Heritage Gas has 3,000 customers in Halifax Regional Municipality, Amherst and the area around Halifax Stanfield International Airport.
A Heritage Gas spokesman couldn’t be reached for comment.
The company’s president said in February that the recent addition of Dalhousie University to the system could help speed gas distribution to the surrounding residential area.
"Generally, it allows us to expand broadly everywhere we can economically expand," Jim Bracken said of adding the Halifax university as a customer.
http://thechronicleherald.ca/Business/1241454.html
HERITAGE GAS SEEKS OK FOR 2011 SPRING BUILD OUT
By Gillian Cormier
Heritage Gas has officially applied to the Nova Scotia Utility and Review Board for the latest leg of its Bedford expansion.
It is seeking approval of a permit to construct a total of 7.6 kilometres of pipeline in the area, much of which will connect new residential housing developments.
The natural gas utility is planning to expand along Hammonds Plains Road to Farmer's Dairy, to the Waterfront Drive area from Bedford Highway, in Bedford South in conjunction with Clayton Developments, in West Bedford in conjunction with Clayton Developments, and in Thistle Grove in conjunction with Whitestone Developments.
Heritage Gas hopes to add 750 new customers in 2011, and will begin construction around mid-May (see allnovascotia 2011-03-28).
About 20 kilometres of new lines are to be built in Dartmouth and the Halifax Mainland. Another 10 kilometres will be added through Bedford West and Bedford South, continuing the expansion begun last year.
The utility has a capital spending budget for 2011 of $20 million.
Heritage Gas has added 100 customers so far this year, bringing its customer count just above 3,000 - about 1,400 residential and 1,600 commercial.
It also released a list of pre-qualified contractor which will work on the build-out, including Sackville Trenching Limited, Robert B. Somerville, Dexter Construction, Ocean Contractors Limited, Brycon Construction Limited, Louisbourg Pipelines Inc. and LinkLine Contractors.
HERITAGE GAS RAMPS UP FOR SPRING BUILDOUT
By Gillian Cormier
Heritage Gas is preparing to begin its spring build-out, hoping to add 750 new customers in 2011. Jim Bracken, interim president for Heritage Gas, says company crews and contractors from Dexter Construction will begin construction around mid-May. About 20 kilometres of new lines are to be built in Dartmouth and the Halifax Mainland. Another 10 kilometres will be added through Bedford West and Bedford South, continuing the expansion begun last year. Bracken says the utility has a capital spending budget for 2011 of $20 million. "We see our revenues growing 20-25%, compared to last year," Bracken said. "We are a pretty busy little company."
Following the completion of Dalhousie University's conversion last year, Bracken says there are few other major anchor customers to come online in 2011. Heritage Gas has added 100 customers so far this year, bringing its customer count just above 3,000 - about 1,400 residential and 1,600 commercial.
Schools in the Bedford area are currently making their decisions, and have been included in Heritage Gas's estimates for 2011. Bracken says there are also multi-unit residential buildings in Bedford and Clayton Park which will be hooked up this year. The spending on the projects still needs to be approved by theNova Scotia Utility & Review Board. Bracken says Heritage Gas will submit construction plans to the regulator later this spring.
Meanwhile, the search for a permanent president is still underway. Last fall, Ray Ritcey was moved out of the presidency and into a new job as corporate development vp for parent company AltaGas Ltd. Bracken, AltaGas's senior vp of major projects, was brought in to serve on an interim basis (see allnovascotia2010-09-03).
He will not be offering for the position.
Natural Gas Price puts Damper on Nuclear Power
Low natural gas prices could ultimately have a bigger effect than the reactor crisis in Japan in terms of putting a damper on investments in new nuclear power plants, experts say.
Unlike past nuclear disasters at Three Mile Island in 1979 and Chernobyl in 1986, market-watchers don't expect Fukushima to freeze support for nuclear power. But the industry could feel a chill nonetheless, they say, because economics guide development decisions and the price of gas is just too good to ignore.
SPECIAL REPORT:
Power Switch
How much do you really know about where your electricity comes from, and how changes being made right now to Canada's power grid are going to affect you? Find out what you need to know about Canada's electricity plans in the Power Switch special report.
"It is certainly hard to see in this post-Japanese tragedy how natural gas doesn't have a more positive view," said Carl Kirst, senior research analyst with BMO Capital Markets.
Kirst follows TransCanada, which has extensive gas holdings. It also owns a 40 per cent net stake in Bruce Power, Canada's only private nuclear generating company, which is completing work on repowering the Bruce A reactor.
Natural gas is the only fuel source that did not increase in price over the past year, partly due to the fact that new extraction methods have caused estimates of natural gas reserves to skyrocket.
That will have a significant impact on plans for the construction of new nuclear reactors. Energy analysts predict demand for natural gas will increase in the wake of the Fukushima nuclear accident as countries, including Japan, seek to expand their energy mix and reduce risk.
Carbon question
The case for natural gas isn't clear-cut, though. Nuclear supporters point out that another factor in the debate over the future of Canada's energy mix is the issue of carbon costs: add it to the bill for oil, gas and coal-fueled electricity generation and nuclear power becomes a more affordable option.
Shale Gas
The big driver of government interest in natural gas is shale gas exploration, which is greatly expanding the world's reserves of exploitable natural gas. It has also sparked a growing public outcry over the environmental impact of new extraction methods that use water and chemicals to create cracks in shale rock formations, freeing gas that would otherwise go untapped.
Shale gas production in the United States has boosted natural gas production levels to a 30-year high, and companies such as Encana and Talisman Energy want to ramp up production in Canada.
Governments in B.C, Alberta, Saskatchewan, Ontario, Quebec, New Brunswick and Nova Scotia each have proposals before them from companies wanting to extract natural gas from shale.
The reason can be found in the decommissioning and disposal costs associated with nuclear power, which unlike other energy sources, is included in the base energy costs. Carbon costs, however, aren't factored in.
A 2007 MIT study concluded the cost of nuclear power was about 2 cents per kilowatt hour higher than natural gas and coal. However, add carbon charges to the equation and nuclear becomes a more cost-effective option.
"Without a carbon cost, nuclear cannot compete with gas and coal for a new build," Duane Bratt, an energy policy expert at Calgary's Mount Royal University, says.
Until that happens, the nuclear industry will face challenges pushing new projects forward if gas prices and interest rates maintain their current trajectory, says Bratt, who expects loan guarantees to increase.
The outlook is a bit better for nuclear restarts, because it's a different calculation. Sunk costs - the billions already spent building the plant - combined with replacement costs to build new electricity generation, make retrofitting existing plants more palatable to investors and policy makers.
Uranium demand
This isn't to say that the nuclear industry will be untouched by the Japanese disaster itself.
Stock analysts for Saskatchewan-based Cameco, the world's largest uranium producer, have already downgraded forecasts in the wake of the Fukushima accident.
'We do not believe the nuclear renaissance will come to a complete halt following the events in Japan, but there is certainly potential that some reactor construction gets delayed, particularly in earthquake prone areas.'—Greg Barnes, TD Securities
"We do not believe the nuclear renaissance will come to a complete halt following the events in Japan, but there is certainly potential that some reactor construction gets delayed, particularly in earthquake prone areas," wrote Greg Barnes, base metals analyst for TD Securities.
Japan accounts for approximately 12 per cent of global uranium demand, and a drop in sales will not be easily replaced by other customers.
Other countries are also scaling back demand for uranium. Following the Fukushima disaster the German government announced a three-month closure of seven reactors constructed before 1980, and China halted its nuclear expansion program. Both decisions were made in the interest of reviewing safety standards, according to officials.
Development costs
Despite these decisions by countries that rely on nuclear power, RBC Capital Markets analyst Adam Schatzker believes uranium prices will rebound in the long-term.
Canadian power plant database
Wondering about power plants near you? Search CBC's power plant database to find out details about existing or planned generating stations across Canada. Search by plant type, owner or location.
"The vast majority of governments that are licensing new nuclear reactors will slow the process, review the outcomes from the Japanese disaster, and then proceed with the new reactor construction utilizing improved safety regimens," he says.
But these additional safety requirements could add to the already substantial up-front costs of nuclear power projects. Approximately 65 per cent of nuclear plant costs are spent during the construction phase, which increases the financial risk for an industry that, in Canada, is controlled by Crown corporations.
That is why it's difficult to separate politics from the business of nuclear power, says Mount Royal University's Bratt. "Investors won't be as swayed by media stories as politicians are."
And in Canada, another rising cost will be liability insurance. Countries with nuclear reactors require operators to carry insurance, but Canada's legislation is outdated. It caps company payouts at $75 million, with government covering other claims.
MPs were poised to approve a new nuclear liability act that would increase liability to $650 million. but the order paper died, along with other bills, with the dissolution of Parliament and the March 26 election call.
Even with that increase, government will continue to be responsible for the bulk of the costs of a nuclear disaster in Canada, says Tim Weis, director of renewable energy and efficiency policy at the Pembina Institute.
That's further proof, he says, that nuclear energy isn't a good investment for governments - or taxpayers.
"Nuclear has all sorts of government subsidies, and it has from day one," says Weis. "When it comes to energy we have to decide where are we going to put our eggs, and right now the cost trends on renewables are going down, whereas with nuclear it is trending up."
http://www.cbc.ca/news/technology/story/2011/03/27/f-power-2020-nuclear-business.html
Heritage Gas Reaches Milestone with 3,000 Natural Gas Customers
Heritage Gas Ltd. (Heritage Gas), announced today it has reached the 3,000 customer milestone for natural gas delivery in Nova Scotia. The 3,000th customer is an apartment owner in the Clayton Park area of the Halifax Regional Municipality. “We are pleased that customer 3,000 is located in the recently completed Fairview, Clayton Park, Bedford expansion area. New access to natural gas service for this customer and others supports the future growth of our distribution network.” said Jim Bracken, President of Heritage Gas. “We would not be here today without the ongoing support of our customers, thank you. We look forward to serving our new and existing customers and providing a lower cost, cleaner energy choice for today, and the years ahead.” Heritage Gas announced in October that it had completed its natural gas pipeline construction to Bedford. Heritage Gas’ largest project to-date, the expansion added 30 kilometres of new pipelines to the natural gas distribution system and provided the foundation for further expansion into these growing communities over the next several years.
Natural gas reduces green house gas emissions, delivers significant economic benefits compared to most alternate fuel choices and is the fuel of choice widely used throughout Canada. Availability of natural gas is a competitive advantage for businesses in terms of reduced operating costs. Homeowners along the pipeline route will benefit from the convenience and savings associated with the opportunity to choose natural gas for heating, water heating, fireplaces, ranges, clothes dryers, barbecues, and other outdoor living applications. Natural gas is safe, reliable and abundant through access to Nova Scotian and North American natural gas supplies. Heritage Gas has invested over $200 million in over 300 kilometres of natural gas infrastructure to date and looks forward to continued economically prudent expansion of its infrastructure. Heritage Gas Limited is a Nova Scotia-based company formed for the purpose of operating a full regulation class natural gas distribution franchise in Nova Scotia. Heritage Gas has over 3,000 customers in Halifax, Dartmouth, Amherst and the Halifax Airport area. Heritage Gas is owned by AltaGas Utility Group Inc., an indirect wholly-owned subsidiary of AltaGas Ltd.
http://www.heritagegas.com/press/
Heritage Gas Announces Dalhousie Conversion Is Complete
Heritage Gas has finally announced largest-yet customer Dalhousie University has completed its conversion from Bunker C oil to natural gas. Energy Minister Charlie Parker announced yesterday it would foot $1.4 million of the $1.8 million cost of the conversion project via the Sable Offshore Energy Producers-funded Gas Market Development Fund (see allnovascotia 2010-09-28). About 110 buildings and two kilometres of district heating are using natural gas. Ken Burt, vp of finance and administration at Dalhousie, said the school expects to save around $1 million per year on fuel. Burt says the savings depends on the price of natural gas compared to Bunker C, and both fluctuate, but the school expects the economics will get better with time as oil prices climb faster than natural gas. Dalhousie currently has a $15 million energy budget. The two oil trucks per day that used to visit the campus during peak season will no longer be necessary. Nearby University of King's College is also using natural gas via an agreement with Dalhousie. With Dalhousie as another major anchor in the Halifax South End, residential customers in the area also have improved access to natural gas. Heritage interim president and ceo Jim Bracken says natural gas has been Dalhousie's primary energy source for a few months now. He says much of the South End expansion anchored by the Dalhousie conversion has already taken place. "We continue to grow as fast as we can grow," said Bracken. "We don't want to get into a situation where we over build and incur more costs for ratepayers." Bracken says Heritage Gas currently has about 3,000 customers. Rochelle Owen, director of sustainability at Dalhousie, said the conversion will save the equivalent of the heating for 14,000 three-bedroom homes. The university also hopes to reduce its greenhouse gas emissions by 50% over 2008 levels by 2020. Dalhousie is the third university to complete its natural gas conversion over the last year. Mount Saint Vincent cut its operating costs by a projected 10% for a $367,000 conversion (see allnovascotia 2010-09-29). MSVU's participation was cited as a key factor in making gas available to residential customers in the Bedford area. Saint Mary's University has also converted last year, and went from spending $1.1 million of fuel in 2007 to $560,000 in 2009 (see allnovascotia 2010-11-29). The three Halifax universities, and possibly the hospitals, may also decide to band together to buy cheaper natural gas. Dal, SMU and MSVU hired a Maine consultant to look at what is the best option for buying gas for the schools. The three universities already leverage joint purchasing power through Inversity Service Inc. (ISI). The arrangement makes no difference to Heritage Gas, which makes its money on distribution, not selling the gas.
Natural Gas from Nova Scotia Offshore to Light Games Cauldron
Companies representing Nova Scotia's energy sector are fuelling the Halifax 2011 Canada Games -- literally. Nova Scotia Power, Heritage Gas, Encana Corporation, Wilson's and Maritimes & Northeast Pipeline are each contributing up to $50,000 to the Games, which start in less than eight days. "Be it time, money, or natural gas, the wide range of generous contributions coming from our energy sector sponsors will help make the Games a success," said John Rogers, chair of the marketing and sponsorship division. Heritage Gas, the natural gas distribution company in Nova Scotia, has contributed $25,000 and is supplying natural gas to fuel the Games cauldron, located at the new Canada Games Centre. Seven of the 11 Canada Games venues in the Halifax Regional Municipality are using natural gas, a cleaner energy solution in terms of emissions.
The cauldron fuel originates from Maritimes & Northeast Pipeline's system, from the Nova Scotia offshore. Maritimes & Northeast, runs the pipeline which delivers natural gas from Goldboro to consumers in Nova Scotia, New Brunswick and New England. Nova Scotia Power is providing office space for Games staff in Scotia Square, which supports the company's focus on wellness and community. Encana has provided support for infrastructure, such as the Canada Games Oval. It has also donated its corporate tickets to the local community. Encana is building Deep Panuke, Nova Scotia's second offshore natural gas project, slated to begin producing this year. Wilson's $50,000 sponsorship includes propane for the oval and gas for Games vehicles near Ski Martock and Ski Wentworth.
The 2011 Canada Games has raised $8.1 million from corporate sponsors. For more information, visit canadagames2011.ca . The Halifax 2011 Canada Games will be the largest multi-sport event held in Nova Scotia and the city's first Canada Winter Games. From Feb. 11 to 27, more than 2,700 athletes will compete in more than 20 sports, attracting thousands of visitors, VIPs, officials and media.
Oval’s power bill will hit $100,000
Mayor says city may consider switching to natural gas
By LAURA FRASER Staff Reporter
Tue, Feb 8 - 4:54 AM
The Canada Winter Games oval will use more than $100,000 worth of power annually, based on electricity bills for the skating rink’s first months in operation. Municipal staff don’t expect to give Halifax regional council a report on how much it could cost to reopen and operate the oval next year, but the municipality’s facility development manager said it will likely use an average of $32,000 worth of power each month. "In the scheme of things, it’s not huge," Terry Gallagher said. "If you look at the scale of the accomplishment, as far as the use versus the cost, it’s still a very special project."
Municipal staff estimated it would take about $20,000 worth of power to run the six ice chillers each month. Gallagher could not say whether that figure had been met or exceeded thus far because the power bills also included the cost of the outdoor lights and heating the trailers around the oval. The first power bill, which spanned from the end of November through to Dec. 14, was about $15,000. It cost $32,000 to power the oval from Dec. 14 to Jan. 18, which Gallagher said would have been during peak usage by skaters. The oval did not open to the public until Dec. 20. The six chillers can keep the ice frozen until the air temperature steadily reaches 10 C. With that in mind, Gallagher said he expects the oval could stay open until mid-March. Gallagher said staff have gone through a learning curve because it is the first time they have worked with the chillers. He said the knowledge they have gained this winter could be used next year to manage energy costs.
Mayor Peter Kelly, who has come out as a strong supporter of a future use for the oval, said that he would want municipal staff to look at alternative energy options. "If it is going to be permanent, then (with) natural gas in the area . . . I think we would have to consider changing over to a natural gas operation. That’s one thing that I’d like to have explored, to see the viability of going in that direction and to see what cost factors may be involved."
Kelly also said the oval may be able to draw and then store electricity during off-peak hours as a means of cutting power costs. Advertising revenue could also help recoup some operating costs, the mayor said. On its busiest days, the oval has held more than 5,000 skaters, Halifax Regional Municipality says. The opening ceremony for the Games will be held Friday.
http://thechronicleherald.ca/Metro/1226531.html
ECONOMIST: PANUKE GAS BOOST STILL YEAR AWAY
By JUDY MYRDEN Business Reporter
Fri, Dec 31 - 4:53 AM
The $800-million Deep Panuke natural gas project will begin flowing gas in late 2011, but any boost to provincial exports won’t happen until the following year, says Patrick Brannon, an Atlantic Provinces Economic Council economist. "The real boost of exports will come in 2012," Brannon said. A recent report by RBC forecast increased energy production from Encana Deep Panuke project will increase economic growth to two per cent in 2012, compared to 1.5 per cent in 2011.
This increase comes as Nova Scotia’s offshore industry has struggled with low natural gas prices and declining gas production at the ExxonMobil-led Sable offshore project, causing a drag on the province’s trade balance. "The declining volume of output has been compounded by considerable weakness in natural gas prices, which have plunged almost 30 per cent since June 2010. This combination of factors means a likely contraction in nominal energy exports in 2010, thereby creating a substantial drag on the province’s trade balance," wrote RBC economist David Onyett-Jeffries.
Brannon says Deep Panuke will re-accelerate growth in exports in 2010 after commissioning and ramping up of the project.
Deep Panuke, located about 250 kilometres southeast of Halifax in 45 metres of water, will be Nova Scotia’s first offshore development since the Sable gas project, which started in 1999. The Calgary oil and gas giant’s project has been a long time coming. Deep Panuke was given the go-ahead in February 2001, when the billion-dollar project was set to deliver 400 million cubic feet of gas per day. Then on Valentine’s Day 2003, the project was shelved and a new plan was prepared in 2006.
Encana’s board of directors signed off on the project in October 2007.
"Since it was approved in 2007, there has been a fair amount of activity to get ready for what will eventually be gas production," said Lori MacLean, Encana’s spokeswoman in Halifax. She said a diverse team of over 100 people in Halifax and Calgary has been diligently working to make the project a reality. The past two years have been extremely busy drilling wells and laying pipeline offshore to bring the gas to markets. "It’s certainly one of the largest projects underway in Nova Scotia and certainly the largest private project over that brief window of three or four years," said Brannon.
"It is certainly significant on the construction side in the offshore and a lot of the support services and a lot of activity in the Halifax area as well." MacLean said the project achieved three major milestones in 2010.
In March, the Rowan Gorilla rig drilled one acid gas injection well, which will be used for disposal of hydrogen sulphide and carbon dioxide removed from the natural gas produced at the field. The rig also did work on four other production wells, she said. The third was the installation of the flow lines that will carry the gas from the wells to the production field centre. For the first six months of 2010, EnCana spent $136 million, according to the company’s semi-annual benefits report filed with the Canada-Nova Scotia Offshore Petroleum Board.In 2009, $371 million was spent on the project, mainly on installing a 172-kilometre undersea pipeline to carry the gas from the fields to shore.
MacLean said Encana’s work on the project is starting to "wind down," and the final phase of the project will be led by Single Buoy Moorings, which will oversee the installation and commissioning of the production field centre. At the heart of the project is the offshore production field centre, which is currently being built on a dry dock in Abu Dhabi. It is expected the structure will be transported on a barge to Nova Scotia in the spring of 2011 for final hookup and commissioning. Onshore work included the installation of three kilometres of pipeline from the beach to the meter station in Goldboro.
The project is estimated to contain as much as 892 billion cubic feet of natural gas. Spain’s Repsol will buy up to 300 million cubic feet of gas per day over the life of the project, which is estimated to range from eight to 15 years. Repsol operates the Canaport regasification terminal outside Saint John, N.B., which is the first land-based liquefied natural gas receiving and regasification facility to be built in over 30 years on North America’s Atlantic coast. Brannon said that after Deep Panuke, there are no other projects of this magnitude on the books. "All the federal stimulus certainly played a significant role over the past two years but, especially on the private side, there is no project of that magnitude that’s imminent. So that’s a concern in terms of business investment supporting economic activity going forward."
http://thechronicleherald.ca/Business/1219634.html
UNIVERSITIES TO LOOK FOR CHEAPER GAS
By Gillian Cormier
Three Halifax universities, and possibly the hospitals, may decide to band together to buy cheaper natural gas. Saint Mary's University (SMU), Dalhousie and Mount Saint Vincent University have hired a Maine consultant to look at what is the best option for buying gas for the schools. SMU director of facilities Gary Schmeisser says the universities are interested in lessening the risk of large increases in natural gas prices in a single year. "It's not necessarily the lowest price, but it might be a better price," said Schmeisser. "We can look at what our futures are, go out two or three years, it may cost us a bit more but then we know what out cost of fuel is." Schmeisser also hopes that the local hospitals will jump on board if it looks like hedging is the way to go.
The three universities already leverage joint purchasing power through Inversity Service Inc. (ISI). It's all the same to Heritage Gas, which makes its money on distribution, not selling the gas. In fact, at the Energy Solutions conference last week in Halifax, Heritage's business development specialist Rohit Seth said the company encourages large clients to look into buying their own gas. He says SMU is still pleased with the decision to convert, both from an economic and environmental perspective.
SMU is also not worried about the proposed 7% rate hike for 2011. Schmeisser says that it is most for Heritage Gas to expand its network in Halifax. The university went from spending $1.1 million of fuel in 2007 to $560,000 in 2009, he says. Schmeisser also notes that SMU biologists have noticed that algae is beginning to grow back on the trees around the school since Bunker C fuel oil was abandoned. SMU began its boiler conversion to natural gas in 2008. Mount Saint Vincent, with help from the province, finished its conversion in September (see allnovascotia 2010-09-29).
COMPLAINT AGAINST HERITAGE GAS DISMISSED
But utility board orders review of delivery system
By JUDY MYRDEN Business Reporter
Wed, Dec 1 - 4:53 AM
Peter Allen will have to keep waiting to be hooked up to natural gas to heat his home in south-end Halifax. Allen and another south-end resident complained to the Nova Scotia Utility and Review Board earlier this year that natural gas distributor Heritage Gas was taking too long to expand its pipelines in its franchise area of peninsular Halifax. The board dismissed the complaints in a 31-page decision released Tuesday. The board found the area does not qualify at this time for the extension of natural gas service, based on the company’s feasibility test that the board approved. But the board has ordered Heritage Gas to review the way it estimates costs for specific areas, using alternatives such as different installation techniques and the economics of a large-scale installation, and to file a report by May 31.
The board has in the past raised concerns about Heritage Gas’s management of its finances, and it put the company on notice that it plans to oversee the company more rigorously. The board stated that it is "mindful" of Heritage Gas’s ballooning $47-million revenue deficiency account, which is being used for expansion, and how customers are expected to pay this off. The account is expected to peak at $47.9 million in 2012 and fall to $2.3 million by 2020. Just last year, the board approved a peak of $30 million, with the deficiency account to be retired in 2018. The board recently capped the account and stated in its decision Tuesday that "it is reluctant to order an action which could significantly increase the balance."
Meanwhile, Allen’s fellow south-end resident Balwantray Chauhan persuaded neighbours to sign expressions of interest in Heritage Gas and hand-delivered the paperwork to the company’s Dartmouth office but got no response. The board chastised the company for its inaction. "The board finds Heritage Gas’s handling of these applications/expressions of interest to be unsatisfactory," the decisions said. "It shows disrespect to a private citizen who, of his own volition, undertook a marketing exercise on behalf of the company."
The board ordered the company to review the way it handles expressions of interest from potential customers and to report back by May 31. The Pictou County Regional Development Commission also said it is frustrated because Heritage Gas suggested when it received its distribution franchise in 2003 that it would deliver gas to the county by 2009. That has not happened.
( jmyrden@herald.ca)
HERITAGE GAS FINISHES BIG PIPELINE PROJECT
By Amanda Fraser
Heritage Gas has completed its largest project to date in completing a natural gas pipeline that extends to Bedford, Fairview and Clayton Park, the company announced yesterday.
The utility, a wholly owned subsidiary of Alberta-based AltaGas Ltd., spent approximately $17 million on the project, which added about 30 kilometres of new pipelines to its natural gas distribution system and provides further expansion into communities over the next several years.
The expansion includes nine kilometres of the main, 10-inch steel diameter pipeline that largely runs under the Bedford Highway, and about 21 kilometres of plastic mains that will extend into the communities, said Jim Bracken. The interim Heritage Gas president said it's the first phase of a $30-million, six-year expansion plan that, in subsequent phases, will see the company expand further into Bedford, Fairview and Clayton Park, as well as into Bayers Lake. Bracken, who called the link to Bedford a "significant milestone," says Heritage Gas will be able to complete the proposed expansion within the $30-million budget because the main steel lines have been laid. "We are more than half complete because we have the main 10-inch line. That's a big element of the cost," he said. He says by the end of the year, Heritage Gas will have about 3,000 customers, and in total, this expansion will add about 1,000 customers over five years.
The company has come under fire recently for being too slow to service some communities, while also racking up its revenue deficiency account (RDA) to a level the Nova Scotia Utility and Review Board (URB) worries is growing far too quickly (see allnovascotia 2010-05-20). The RDA, cumulative debt that Heritage can recover through rates over time after the greenfield is marched out, is to peak at $47.9 million in 2012 and fall to $2.3 million in 2020 (see allnovascotia 2010-05-20). "We will not exceed the cap with this expansion," Bracken said yesterday. Meanwhile, Bracken will face the UARB in November to ask the board to approve a 7% rate hike to cover company's rising expansion, maintenance and operation costs (see allnovascotia 2010-08-26). He says, however, that the company isn't relying on the rate hike in order to complete its expansion plans within Bedford and surrounding communities. "The rate hike is related to our operating cost increases next year," he said. The increase the company is requesting is over and above a 4.1% on average increase the board has already approved for January 2011. The hike will be across the board, meaning commercial and industrial customers will see them same increase, if it is approved.
Mount makes switch to natural-gas heat
Move will cut operating costs by 10%, CO2 emissions by 35%, school says
Mount Saint Vincent University officials say they will reduce the university’s operating costs by 10 per cent and cut carbon dioxide emissions by 35 per cent now that the university is switching from oil to natural gas at its heating plant.
Interim university president Alexa McDonough said the project, one of 40 planned at the campus this year to improve efficiency and make the campus greener, also reduces sulphur and particulate emissions from the university’s power plant.
"The switch to natural gas will see significant operational cost savings for the university and will significantly reduce the Mount’s environmental footprint," McDonough said.
The switch is part of the university’s commitment to being fiscally and socially responsible, she said.
Other work this year includes updating air and ventilation systems and replacing windows, light fixtures and computer monitors.
"Our entire Mount community is committed to these initiatives and, I think, justly proud of them," McDonough said.
The $490,000 project is funded in part by the province’s gas market development fund, which is contributing $367,000 for equipment and installation.
Energy Minister Bill Estabrooks said the move is a significant step for the university and also allows Heritage Gas to expand its service to nearby residential areas.
"Our government’s energy strategy is to make better use of natural gas. It’s cleaner than any other fossil fuel option and, of course, it’s a local product."
The province wants to see more institutions switch to natural gas, he said.
www.thechronicleherald.ca/Metro/1204385.html
Pictou County pushes for natural gas
Municipality wants review board to order Heritage Gas to extend pipeline
Workers lay natural gas pipeline for Heritage Gas in Halifax but Pictou County has not been so lucky, says a spokesman for the Pictou Regional Development Commission. The county has asked Nova Scotia Utility and Review Board to order Heritage Gas to expand its pipeline to Pictou.
Heritage Gas has never lived up to its promise to deliver natural gas to Pictou County and that’s frustrating, a spokesman for the Pictou Regional Development Commission said Tuesday.
The county’s frustration is based on the fact the gas company said it would deliver gas to the county by 2009 when it received its franchise in 2003, Bob Funke said in an appearance before the Nova Scotia Utility and Review Board.
"That target has been missed," Funke said. "We have grave concerns that we may never be served."
He asked the provincial regulator to order Heritage Gas to expand its pipeline to Pictou County as originally proposed.
The company, owned by AltaGas Income Trust of Calgary, currently has a 229-kilometre distribution system covering Amherst and parts of Cumberland County, Dartmouth, Halifax and Halifax airport. There are 2,600 customers hooked up to natural gas.
"While businesses, residents and institutions in Halifax and Cumberland County continue to enjoy economic, environmental and health benefits, the other counties in the initial development area continue to be on the outside looking in at the Heritage Gas distribution network," Funke said.
Heritage Gas’s president said he understood the frustration but said the company has "refined" its marketing plan over time and now focuses on expansions that can be economically justified.
"Heritage would like to serve everyone who requests service," Jim Bracken said. "However, the practical reality is that in some circumstances the cost of serving a customer or a group of customers exceeds the revenue to be received from doing so." Bracken also said the feasibility test used to determine if an area may be serviced has been reviewed and accepted by the board.
Funke and other members of the commission travelled to Halifax for the one-day hearing into complaints about the lack of service provided by Heritage Gas. "The problem here (is that) too many are failing the feasibility test," Funke said as he noted that the gas will soon "be gone."
In addition to Pictou County’s complaint, the board heard from two south-end Halifax residents who were upset by the company’s refusal to expand natural gas lines to their neighbourhoods.
Peter Allen, who lives on Oakland Road, has tried unsuccessfully for years to have Heritage Gas run lines down his street. He said only a small fraction of Nova Scotia homes have access to the cleaner burning fuel, even though Sable natural gas has been flowing from offshore Nova Scotia for the past decade.
"The amount of progress that has been made in my estimation is pitiful," said Allen, a Dalhousie University mechanical engineering professor who founded Thermal Dynamics Ltd., one of North America’s largest solar thermal equipment manufacturers, in 1981.
He says the board has the authority to make the order and act in the public interest.
Balwantray Chauhan of Bellevue Avenue told the board how a messy, costly oil tank leak led to his desire to switch to natural gas but Heritage Gas has refused to provide the service.
Bracken said he understands their frustrations but said it was not economical to expand into the areas where the two men live.
"I can understand how that’s frustrating to customers," he said. "It really is a function of economics."
The board has reserved its decision.
http://thechronicleherald.ca/Business/1205521.html
HERITAGE SIGNING UP SCHOOLS, AND OVERSEEING A REPAIR
Halifax Regional School Board issued tenders yesterday to convert three more schools over to natural gas - which could mean lucrative new customers for Heritage Gas. Gorsebrook Junior High in Halifax, and John Martin Junior High and Prince Andrew High School are all located next to the Heritage Gas network.
Halifax Regional School Board has a long term energy management plan to replace aging boilers with natural gas equipment.
"It's something we look at on a cost recovery basis," said spokesperson Doug Hadley, who described the fuel as clean.
The school board has already converted Crichton Park School and Hawthorn Elementary about three years ago.
Earlier this year, Dartmouth High School was converted to gas by Ainsworth Atlantic, which won the tender with a $300,000 bid. Black & MacDonald is handling the Bicentennial School conversion with an expected price tag of $250,000.
In other gas news, Dexter Construction will be billed for lost gas and repair following an incident where sidewalk construction crews hit a Heritage Gas natural gas line in Burnside.
In an incident report filed with the Nova Scotia Utility and Review Board, it was reported Dexter crews hit on a four-inch plastic main while pounding steel rod for sidewalk construction.
According to the incident report, gas was released for a little over an hour and a half and required a 20 meter section of pipe to be removed and replaced.
Jim Bracken, interim president of Heritage Gas while a replacement for outgoing president Ray Ritcey is sought, says Dexter has a great track record with the gas company.
The damaged line, which was hit last Monday, resulted in two customers at Ilsley and Wright avenues experiencing an outage for most of the night.
"It was very minimal - about $50 worth of gas," Bracken said, noting there was minimal danger and Heritage Gas crews and the fire department were on site within a half an hour of the event.
He says Dexter always calls Heritage Gas before it begins work, but had lost sight of the markers the utility had put on the pavement once it began excavating.
Meanwhile, Bracken is preparing for the fall season.
The company expects to be hooking up new customers on the newly expanded Bedford line. The build out to Bedford, a $30-million undertaking, is expected to conclude construction for the season this week.
The company currently has about 2,600 customers, and Bracken says they hope too get close to 3,000 by year end.
Bracken also has his hands full preparing for the November rate hearing at the UARB, as well as leading the successor search for Ritcey, who has moved into a new job as corporate development vp for Heritage Gas parent company, AltaGas Ltd.
Bracken will be the new face of Heritage Gas during the second phase of the UARB hearings.
In August, Heritage Gas announced it was seeking a seven per cent rate hike in 2011 to help cover the costs of its expansion, after being scolded for its use of the RDA account (see allnovascotia 2010-08-26).
N.S. gas company faces questions after broken pipe
Heritage Gas has been installing natural gas pipelines in Nova Scotia. (CBC)CBC News has learned a Nova Scotia-based natural gas company was forced to pull a pipeline out of the ground after inspectors for a utility regulator noticed it was damaged.
Consultants hired by the Nova Scotia Utility and Review Board conducted a spot check of a natural gas pipeline being installed on Gottingen Street in downtown Halifax on June 14.
In a report filed to the board, officials with Energy Consultants International Inc. (ECI) said they discovered a 15-centimetre pipe had been damaged while being installed.
According to the consultants, the pipe was gouged, stretched and narrowed so much that it had to be removed.
Energy Consultants International also said there was no inspector from Heritage Gas on site.
On Aug. 26, in a letter to Heritage Gas, the Nova Scotia Utility and Review Board wrote, "It appears that if ECI had not viewed, by its spot check process, the installation, it would probably not have been properly remedied.
"Heritage's inspection of the installation was inadequate, or non-existent."
Jim Bracken, the president of Heritage Gas, said the company caught the mistake at the time and its inspectors were on the site.
"We do not rely on an outside inspector from the board to make sure that we're doing this properly," he told CBC News.
"We have our own inspectors on site to make sure it's done properly."
Bracken added that the public was never at risk.
The Nova Scotia Utility and Review Board has ordered Heritage Gas to co-operate with its consultants and to respond to the letter by Monday.
Heritage Gas — owned by AltaGas Utility Group Inc. — was established to operate a natural gas distribution franchise for Nova Scotia. It has more than 2,600 customers in Halifax, Dartmouth, Amherst and the area around the Halifax Stanfield International Airport.
http://www.cbc.ca/canada/nova-scotia/story/2010/09/10/ns-natural-gas-pipeline-damage.html
Heritage Gas gets go-ahead for Expansion
Heritage Gas, the province’s only natural gas distributor, can go ahead with its plans to spend $31 million over the next five years expanding into the Bedford area, government regulators ruled Friday.
The Utility and Review Board gave the green light to the gas company but had harsh words about its finances. The board is upset with Heritage Gas’s ever-changing financial forecasts, specifically for the revenue deficiency account, which is now expected to be 50 per cent higher than forecast a year ago. "The board believes the time has come for Heritage to take off its rose-coloured glasses and put more discipline and reality into its financial projections.
This discipline and reality is “the responsibility of Heritage and its shareholder," wrote the board in its 18-page decision. The board says it has lost confidence in Heritage managing its finances and plans to inject more rigour into its oversight of the company. It is concerned that present and future Heritage Gas customers will be paying off the ballooning $47-million revenue deficiency account, which is being used for the expansion, instead of the owner. The account is expected to peak at $47.9 million in 2012 and fall to $2.3 million in 2020. In 2009, the board approved a peak of $30 million and the deficiency account being retired in 2018.
If Heritage needs to increase its operating and administrative expenses, and if revenues do not increase to allow that to happen, then Heritage’s only alternative is to apply for rate increases, the board states. The board indicated that the expansion plans are critical to Heritage Gas succeeding. The project consists of installing 31 kilometres of underground pipe to serve the Fairview, Clayton Park, Bayers Lake and Bedford areas, and an additional 33 kilometres of pipeline to serve the Bedford West and Bedford South developments and Hammonds Plains commercial customers.
The project is spread out over five years, but most of the cost would be incurred in the first year. When completed, Heritage expects to be serving a minimum of 1,100 customers in those areas by 2015. The company currently has 2,600 customers hooked up to natural gas. The province’s only natural gas distributor filed its expansion plan with the Utility and Review Board on Dec. 1, 2009, and planned on construction beginning May 1. A decision is expected next week.
In 2003, Heritage Gas received the exclusive right to distribute natural gas in six counties in Nova Scotia.
By Judy Myrden Business Reporter
The ChronicleHerald.ca - June 12, 2010
.jpg)
.png){kind=small}