Recent media reports by CBC and others concerning the provincial Large Industrial Renewable Energy Purchase Program are flawed.
Discussions leading to the creation of the Large Industrial Renewable Energy Purchase Program (LIREPP) began in 2007 (Graham government), four years before it was announced in 2011 (Alward government). It was focused on addressing one issue: uncompetitive electricity rates for industrial users in New Brunswick.
LIREPP is designed to ‘match Canadian average electricity costs for qualifying large industrial customers and provide incentives for New Brunswick companies to build their own renewable generation’. The government of New Brunswick’s communications on the reason behind LIREPP have consistently described the program this way.
Despite media assertions, LIREPP was not intended to be a short-term program addressing the economic circumstances in 2011 like a high Canadian dollar or pulp prices. The fact is, LIREPP is as critical to the long-term viability of New Brunswick’s pulp and paper industry today, as it was when it was first introduced. In some of our operations electricity is the biggest cost we have at over $70 million every year.
New Brunswick’s industrial electricity rates are currently more than 14 per cent higher than the Canadian average. Meanwhile, New Brunswick residential electricity rates are on average 10 per cent lower than other provinces (Source: https://www.energyhub.org/electricity-prices/) and the lowest in Atlantic Canada.
Another media angle requiring clarification: The recent increase in the renewable purchase price does not provide one dollar additional credit to LIREPP participants, rather it continues to allow participants to receive the same benefits from the program as originally intended when it was launched 10 years ago – competitive industrial electricity rates. The current target discount is 14 per cent, reduced from the original in 2012 of 18.6 per cent.
J.D. Irving, Limited’s forest products operations added an estimated $1.3 billion to the provincial economy in 2020, supporting 9,717 jobs across the province that generate an estimated $701 million in employment income. Between 2016 and 2020, J.D. Irving, Limited has invested more than $700 million in capital expenditures relating to forestry operations.
New Brunswick has already lost 50 per cent of its pulp and paper industry. Those that remain make key contributions to the provincial economy. Securing a competitive industrial electricity rate offers a level playing field for NB-based industry and allows New Brunswick pulp and paper mills to continue to make investments and maintain thousands of jobs across the province.
Source: JD Irving