Premature failure of used generating station forces N.B. Power into expensive overhaul

A used natural gas generating station in Saint John that N.B. Power bought in 2019 for $46 million to use for at least seven years suffered a catastrophic failure in January and remains offline undergoing extensive repairs.

Known as Bayside, the generating station was purchased after what N.B. Power claimed was extensive "due diligence," including a pre-sale inspection that it said gave no hint it would not last until 2026.

But the plant suffered a major internal failure on Jan. 24 of this year and has not operated since.

"A rotor blade issue resulted in the plant coming offline," N.B. Power spokesperson Marc Belliveau wrote this week in an email to CBC News confirming the breakdown.

"This was an instantaneous event with the rotor blade that an inspection would not have detected as a possibility of happening."

Belliveau said the utility is now installing a "new gas turbine and generator" in Bayside at an estimated cost equal to the original purchase price — $46 million — and hopes to have the plant back online by the fall.

The incident has not been widely publicized by N.B. Power, but information about it spilled out last week during a hearing in front of the New Brunswick Energy and Utilities Board when the utility was asked about Bayside's operation over the past winter and spring.

That caused N.B. Power official Craig Church to acknowledge the plant has been idle for months.

"So I guess I should mention that Bayside has had a forced outage since sort of the ... end of January," Church, a senior company engineer, said in answer to a question about the plant's recent performance.

N.B. Power announced the purchase of Bayside in March 2019 from Emera Inc., the parent company of Nova Scotia Power. The plant was 20 years old at the time but was judged to be in good enough shape to operate for at least an additional seven years.

Commissioned in 1999, Bayside was set up as an independent merchant plant to sell electricity to N.B. Power between November and March each year and then export the rest of the year.

It is a medium sized facility that can produce about 40 per cent of the electricity of the Point Lepreau nuclear generating station's full capacity and is N.B. Power's only natural gas-fired unit.

The plant has had multiple owners, including Irving Oil Ltd. for a time.  Emera bought it in 2009 and ran it for 10 years before selling to N.B. Power in 2019.   

In hindsight it was a timely divestment by the Nova Scotia-based company.

"Thinking long term, we agreed that the Bayside facility strategically fit better as part of N.B. Power's generation fleet moving forward," Emera president Scott Balfour said at the time of the sale.

In May of 2019, at N.B. Power's annual rate hearing, then company vice president Keith Cronkhite told the Energy and Utilities Board no significant problems at Bayside were identified in its evaluation of the facility or during negotiations to buy it from Emera.

"As part of the Bayside acquisition, we did go through an extensive due diligence process with an external third party related to condition assessment of the station itself. That assessment did not uncover any areas of concern," said Cronkhite 

"Through the engineering review and our knowledge of the facility itself, we did not identify any areas of concern as it relates to the station."  

In a 2019 press release N.B. Power said the "independent third party" consultant, Coleson Power Group Inc. "was impressed with the station's condition," including its "like-new" combustion turbine.

However, those specific words do not appear in the actual inspection report, which is still on file with the Energy and Utilities Board. The firm noted several areas where the plant was showing its age and would need careful monitoring. 

"The Bayside condition is generally what would be expected for a facility of this vintage," said the report.  

As part of its inspection, the Coleson Power Group estimated with an additional $22 million of repairs and upgrades, Bayside could be made to run for 10 years past 2026.  In its latest resource plan released in November 2020, N.B. Power announced it liked that idea and would proceed with a refurbishment of Bayside in 2027.

The breakdown of the plant in January has required those fixes be carried out now and at an elevated expense.

According to Belliveau, N.B. Power found an "existing new gas turbine, built to Canadian standards" that was available at a discount and decided to replace, rather than repair the existing turbine.  

He said the more modern unit is designed to squeeze five per cent more electricity from the same amount of natural gas, which will help reduce carbon emissions per unit of electricity and pay for the expense of the switch.   

He also said it will allow Bayside to operate longer than the original refurbishment plans.

There was no warranty on the plant, according to Belliveau, but N.B. Power did submit an insurance claim to try to recover some money.

"N.B. Power did recoup funds through insurance, the amount of which cannot be disclosed due to business confidentiality reasons," he said.