When Irving Oil announced on October 25 its intention to seek permitting approval to build a 500-750 Megawatt gas-fired power plant in Saint John, the company promised to keep the public informed. Today, the company announced the power plant project's estimated cost to construct and its cost to produce power. The gas-fired plant would cost between $400-600 million in privately-funded investment, with the final decision on cost tied to how much megawatt capacity the company ultimately decides to construct.

 

Based on the company's projections and on industry research, including a study completed in August 2004 by the Canadian Energy Research Institute, the gas-fired power plant is expected to produce power in the 6.5-8 cent per kilowatt hour range. This is a conservative estimate, as it doesn't take into account the increased energy efficiency that would result from using the colder natural gas processed at an LNG terminal.

 

The initial announcement by Irving Oil that they intended to add 500-750 megawatts capacity to the region generated a flurry of media activity in the subsequent weeks, and resulted in many comparisons to the potential project to refurbish Point Lepreau Nuclear Generating Station. The company is aware that the Jeffrey Report recommends that NB Power consider the economics of the alternatives to refurbishing Point Lepreau, but has not taken a position on the potential refurbishment project.

 

Irving Oil representatives have stated publicly that as a power consumer and ratepayer in the province, the company firmly believes that decisions about major capital energy projects in the region should be based on economic considerations and that only projects that are the most economically efficient should go forward.

 

Jennifer Parker

Irving Oil