01/10/2014 12:44 EST | Updated 03/12/2014 05:59 EDT

'Unprecedented' Newfoundland blackouts focus of reviews

ST. JOHN'S, N.L. - As Newfoundland's power grid stabilizes after a week of rolling blackouts, focus has shifted to how the system failed and whether it could happen again.

The province's Board of Commissioners of Public Utilities announced Friday it will hold an inquiry and hearing into widespread loss of heat and lights that affected up to 190,000 customers at its peak Saturday.

That's on top of an independent review promised by the provincial government and an internal investigation by Crown corporation Nalcor Energy.

Planned rotating outages on the island started Jan. 2 as electricity demands spiked amid an unusual cold snap of -15 C plus wind chill.

Newfoundland and Labrador Hydro says in a report to the Public Utilities Board that it notified the board Dec. 31 of "extended capacity issues" involving two gas turbines and one of three generating units at the main Holyrood power plant. A public call to conserve energy went out Jan. 2 before rolling blackouts began.

But massive unplanned outages last weekend were blamed first on a transformer fire Saturday, and then a separate breaker malfunction that threw the Holyrood site offline Sunday night. Newfoundland and Labrador Hydro also experienced an outage across parts of the island on Friday night that lasted about 30 minutes because of a problem at the Holyrood plant.

Nalcor CEO and President Ed Martin said earlier this week those glitches are still under investigation but that the system is now stable.

Energy analyst Tom Adams said such failures are unheard of in Canada's recent utility experience.

"Blackouts happen in power systems," he said Friday from Toronto. "But in recent decades, the only major blackouts that any other part of Canada has experienced have all related to weather damage to transmission and distribution systems.

"The inability of the utility to get its power plants online and keep them running at a sufficient output to meet customer needs — that's really unprecedented in a Canadian context over the last several decades."

Adams said excuses of frigid weather and equipment issues raise troubling questions about load forecasts and maintenance.

"Tough winters are a known phenomenon in Newfoundland," he said. "Power systems are designed to be able to withstand transmission outages. There should be contingency for that."

The expense of lost business and related damages will be tallied in coming weeks.

There may be political costs as well.

Premier Kathy Dunderdale has been criticized for waiting two days after rotating blackouts began to hold a news conference and for then saying the situation wasn't a crisis. Her minister in charge of emergency services, Steve Kent, took the lead in media interviews but did not reveal at the time that he was in Florida.

In a statement Friday, Kent said he tried to return from a family vacation as the situation worsened but was grounded by weather.

"I spent three days in airports with my family trying to get back," he added on Twitter.

Dunderdale announced Thursday plans for an independent review of the province's electrical system.

She said the Department of Natural Resources will set the terms of reference over the next six weeks for the probe to be led by an out-of-province expert. She said it will go beyond the Public Utilities Board inquiry.

"We had energy outages in this province for six days of one type or another (that) caused significant challenges, frustration, anger and concern," she told reporters. "People are wondering what the heck is going on."

The independent review will include how Newfoundland and Labrador Hydro along with Newfoundland Power worked with the Public Utilities Board to predict hydro loads while striking a balance between investments in aging equipment and reasonable rates, Dunderdale said.

That process is arm's length from her administration, she stressed.

Dunderdale has denied suggestions that upgrades to the oil-fired Holyrood plant were put off while the government invests in the $7.7-billion Muskrat Falls hydro project now under construction in Labrador. Expected to produce first power in 2017, the government has staked huge political capital on Muskrat Falls — a project it has said will replace Holyrood.

Liberal Opposition Leader Dwight Ball said Friday that the Public Utilities Board should assess whether Holyrood will in fact be needed as backup.

Tom Johnson, the province's consumer advocate, also said the power failures are unprecedented and have rocked public trust. He was among those who called for an in-depth inquiry which, earlier this week, Dunderdale brushed off as unnecessary.

"My feeling certainly is that the public and customers are asking a simple question: What went on?" he said Friday in an interview. "I'm sure confidence has been shaken."