2021/22 BUSINESS PLAN April 2021 TABLE of CONTENTS
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2021/22 BUSINESS PLAN April 2021 TABLE OF CONTENTS About NB Power ................................................................................................................................................. 1 Mandate ........................................................................................................................................................... 1 Our Plan ............................................................................................................................................................... 3 Strategic Excellence Areas ................................................................................................................................. 5 Safety Excellence ............................................................................................................................................ 6 Customer Excellence ...................................................................................................................................... 7 Organizational Excellence ............................................................................................................................. 8 Reliability Excellence ...................................................................................................................................... 9 Environmental Excellence ........................................................................................................................... 11 Attachment A – Measure Definitions ............................................................................................................. 12 Attachment B – Financial Highlights .............................................................................................................. 13 NB Power’s 2021/22 Business Plan has been prepared by management and reviewed and approved by the New Brunswick Power Corporation Board of Directors. ABOUT NB POWER NB Power is the largest electric utility in Atlantic Canada and is responsible for the generation, transmission and distribution of electricity throughout New Brunswick. Our more than 2,500 employees across New Brunswick are dedicated to providing safe, reliable and economically sustainable service to our more than 400,000 direct and indirect customers in New Brunswick. The Electricity Act gives NB Power the authority to sell electricity within the province, and to manage and operate NB Power’s resources and facilities for the supply, transmission and distribution of electricity within New Brunswick. The Act also establishes that, to the extent practicable, rates charged by NB Power shall be maintained as low as possible, and changes in rates shall be stable and predictable from year to year. Our rates are regulated by the New Brunswick Energy and Utilities Board. As a provincial Crown Corporation, the Province of New Brunswick is the owner and sole shareholder of NB Power. NB Power reports to the Shareholder through the Minister of Natural Resources and Energy Development and the Shareholder’s expectations are expressed through legislation, policies and a mandate letter. NB Power’s most recent mandate letter from the Minister calls for focus on the following priorities. Mandate COVID-19 Like most organizations, COVID-19 has had a significant impact on NB Power’s operations and its customers. As the supplier of an essential service to all New Brunswickers, NB Power continues to maintain an updated operational plan which meets Public Health, Safety and other applicable Government requirements. In addition to safeguarding the health of employees and the public, these plans ensure critical infrastructure and essential services are maintained as a top priority. This is managed at an operational level through internal emergency preparedness processes. Climate Change The transition to a lower carbon economy is an essential priority for NB Power. Therefore, NB Power is focused on several initiatives developed to lower its carbon footprint while keeping rates affordable. Net Metering and Embedded Generation NB Power remains committed to the net metering and embedded generation programs. This includes continued investments in testing options for customers through the Smart Grid Atlantic Projects. The embedded generation program is currently fully subscribed and under review by NB Power. Reducing our Carbon Footprint Another important area of focus is reducing NB Power’s carbon footprint. This is achieved through internal reductions of energy usage, continued diversification and optimization of our generation through additional non-emitting sources and an equivalency agreement with the federal government. In addition, NB Power is exploring evolving and alternative non-emitting generation and technology options of the future such as small modular reactors. 1 of 13 Energy Efficiency NB Power also continues to mature service offerings aimed at reducing the demand for energy and provide savings to customers. These services are available for all classes of customers and for all fuel types used in the province. First Nations NB Power believes in building long-term, mutually beneficial working relationships with our surrounding First Nations communities based on a foundation of respect, inclusion and responsiveness. Maintaining regular consultation with First Nations as a recognized Rights Holder in New Brunswick is a standard process within NB Power. This includes proactive consultation as part of major project planning and execution as well as to enable energy related development programs such as the Locally Owned Renewable Energy Projects that are Small Scale Program. In addition, NB Power looks to provide specific opportunities in First Nations employment and procurement. Debt Reduction NB Power remains committed to meeting its mandate to achieve a capital structure of at least 20 per cent equity by 2027. This Business Plan has been developed to reflect that commitment through cost reductions, and rationalization and prioritization of capital investment requirements. These actions have been balanced with ensuring NB Power continues to deliver safe, reliable and affordable electricity and services to our customers. Community Collaboration NB Power actively works with communities throughout the province to meet energy related needs and support economic development in the province. This includes partnering in the build of the first smart community and testing advanced smart grid solutions. This also includes working collaboratively to understand community unique needs, build capacity and advise or develop energy solutions. New Business Development The energy industry continues to change at an accelerated rate. NB Power recognizes these changes come with opportunities that can support its vision of sustainable energy for future generations. NB Power provides regular updates to the Shareholder on these opportunities via face-to-face meetings and/or briefing notes to ensure alignment and support. An example of a new business development opportunity actively being explored would be small modular reactors. New Brunswick Energy Marketing New Brunswick Energy Marketing continues to be active in the business of importing and exporting electricity and related products and services to keep rates low in New Brunswick. It remains focused on preserving existing customers while exploring opportunities to expand in other evolving energy related markets. 2 of 13 OUR PLAN The COVID-19 Pandemic has had a significant impact on NB Power, the Province of New Brunswick and countries around the world. As a critical service provider, NB Power plays an essential role as part of the province’s pandemic response. In support of our customers during this very challenging time, NB Power has been focused on • delivering critical customer services and meeting essential customer needs while adhering to all health and safety guidelines • offering flexible bill payment arrangements and rate relief in recognition of the toll the pandemic has had on the economy • ensuring safe and reliable infrastructure for our health care system, businesses and all our customers NB Power’s commitment to support New Brunswick through this pandemic has led to the postponement and delay of other longer-term objectives. Although NB Power remains committed to supporting its customers to the end of this challenging crisis it also recognizes the need to resume focus on other mid to longer term priorities. COVID-19 has reinforced that planning in uncertain times adds significant complexity and requires NB Power to remain agile in order to ensure essential services to our customers in a financially responsible manner. NB Power’s 2021/22 plan has been developed with three longer-term strategic objectives including focusing on reducing debt to improve the financial health of the organization, advancing the modernization of the grid and supporting the transition to a low-carbon economy. In doing so, NB Power must continue to put customers at the center of everything it does and ensure the utility is responsive to customers’ changing expectations. In the development of this plan, NB Power has made every effort to reduce controllable costs, rationalize capital investment requirements and minimize upward rate pressure while targeting critical debt reduction opportunities. NB Power will develop and implement strategies to meet financial targets recognizing increasing cost pressures due to climate change impacts (increasing storms, lower hydro flows, carbon pricing), rising fuel costs,