10 September 2009

Hydro Quebec not an issue: Ed Martin

A few days before Danny Williams tried to blame Hydro-Quebec for delays and problems in the Lower Churchill project, NALCO chief executive Ed Martin was singing the same old song about what a great project he had and how any day now he’d be ready to start talking to prospective customers about a sale.

He’s been saying that for three years.

But here’s part of what you’ll find in the August 31 Toronto Star:

Martin doesn't see the Quebec issue as a major stumbling block, as regulation requires the province to allow access to its grid in return for a set tariff. Hydro Quebec and Nalcor are just working out the details.

That’s the exact opposite of the line Danny has been pushing for a week or so, now.

You can also notice in this piece that  - according to Martin - the project will be financed at least in part by oil revenues.  Some of those are flowing now from White Rose, but others won’t be along for the better part of the next decade.

Ed Martin is going to have to pull off some neat financial tricks if he plans to pay for a $10 to $14 billion project  Danny Williams said will be pushing power in 2015 when the cash Martin is counting on won’t start showing up at his front door until around 2020. 

But anyway…

Ed needs to talk to Danny or vice versa.  Basically these guys are on two completely different pages about this project. 

Then again, Danny and others seem to be on different pages quite a bit lately, including with himself over Hydro-Quebec and an ownership stake in the Lower Churchill.

Rest assured though, that as much as Danny Williams and his team appear to be all over the map, there is a piece of paper somewhere with the word plan written on the top of it.

At least that’s what he felt compelled to tell the local board of trade the other day after a local newspaper editor pointed out the decidedly errat…mercuri…caprici…ummm…errr… impulsive way the provincial government tends to be. 

Well, he said “slaphappy” too, but let’s use impulsive because it is a bit friendlier than most of the words that come to mind.



Anonymous said...

Access to the grid is one issue. Increasing the capacity of the grid is another. You seem to be up on this, can the Quebec grid handle Romaine and Lower Churchill?

Edward G. Hollett said...

Well, since the Lower Churchill doesn't exist and won't exist before the first of the Romaine dams comes on stream your questions is more than a bit hypothetical.

And really, that's the starting point of any discussion: unless the provincial government is completely insane and is hell bent on making exactly the same mistake BRINCO made in 1966, the Lower Churchill exists only on paper.

To get to your specific question about grid capacity and access, let's look at the fact that HQ and ONTARIO are busily expanding the capacity of the grid within the provinces and across borders. HQ is starting a 1200 megawatt upgrade to the connection to the US. It is fronting the cash for the project itself. Likewise, HQ and Ontario distribution are upgrading the interconnections at Cornwall and at Ottawa to handle more power.

Neither access nor capacity is a condition or an issue.

All that's needed for the LC is markets and money. No markets? No money. No money and no markets? No project.

What we've seen over the past week is pure bullshit. HQ isn't stopping this project. The lack of markets and money is.

And to really drive it home, the mercurial, impulsive, erratic decision-making style (there IS no plan ever) that led to the go-it-alone bullshit plus all the anti-Quebec posturing that came from equally short-sighted impulsive decisions sealed the fate of the LC five years ago.

ll that has happened in the meantime is that taxpayers have spent another couple of hundred million for media plays and ploys. We'll be doing this as part of another re-election campaign into 2011.

The LC isn't an energy project or a business project: it's a re-election prop, first for Tobin and now for Williams.

Anonymous said...

I guess I have to repeat the question, which is admittedly hypothetical. Is there enough capacity in the Quebec grid for both Romaine and Lower Churchill?

Edward G. Hollett said...

Let me put it equally simply:

There is no issue with respect to capacity or access in the grid for any current or future or theoretical projects.

If, in the event, additional capacity is needed it can be added as it is being added right now today as we speak to handle projects due before Romaine.

Anonymous said...

"If, in the event, additional capacity is needed it can be added"

By whom?

Edward G. Hollett said...

By whomever.

Typically the utilities involved have come to an agreement about costs and then they recover it through the rates.

Grid capacity is not an issue.

Let me say it again in case it has not been clear:

There is absolutely NO issue WRT the grid.



Not a thing.

No problemo.

Nothing to see.

Anything you've heard to the contrary is bullshit.

Anonymous said...


Thank goodness there's no capacity issue.

Burke said...

Carrying capacity is one thing; HQ's inclination to allow their capacity to use to benefit Newfoundland is another.

Isn't that the real sticking point?

Edward G. Hollett said...

That's what some people might like you to believe or like to believe Burke but it is not the case.

As I said there is absolutely no issue with respect to the grid. Hydro Quebec has no legal ability or any other ability to impede access.

Any suggestion claim or implication to the contrary is bullshit.

Anyone making such a claim should be asked to produce proof. I will guarantee they cannot provide any such proof because it doesn't exist.

Anonymous said...

I'm astonished to learn that Hydro Quebec has built a grid with so much excess carriage capacity.

You seem to have knowledge in this area, perhaps you could explain what motivated them do such. I am really asking.

Edward G. Hollett said...

It isn't an issue of carrying excess capacity, 1544, so you are missing the point entirely.

The grid is regulated such that the system can carry what it needs to carry now and can expand in the future.

Not a problem.

You don't have to take my word for it. look at what Ed Martin says in the article.

Anyone who suggests anything else is misleading people.

ClaudeB said...

Ed, I understand your point, and you're basically right about the OATT : HQT can't deny access to anyone as long as there is sufficient network capacity. That's one thing, and there is no doubt the Montagnais substation (near point A in HQ's parlance) and the three 735 kV power lines could handle the extra power from Labrador. But wheeling all the way to the NB, ON and US borders and beyond might be a little more complicated, because it would involve investments on the Quebec grid and the interconnections.

But, building new infrastructure is no sure bet. Ask Ultramar, who's trying to build a pipeline between their Lévis refinery to Montreal. The project has been on hold for the last four years because some farmers in Lévis and near Victoriaville have organized a grassroots movement.

If the Lower Churchill load requires new lines or substation upgrades (most new projects require such things as reactive power in the province's main 735 kV substations), HQT must run through the loops of obtaining permission from the Department of the Environment, regional county municipalities, the farming land protection commission. In some cases, like this recent one, HQT was able to avoid the BAPE or dealing with native claims.

So there is a certain level of uncertainty involved here. It wouldn't kill a transmission project but it could delay it significantly. In any case, you need the HQ lawyers and P.R. specialists at the top of their games and that involves some form of political backing from Quebec City, FERC rules or not.

Edward G. Hollett said...

Thanks Claude for the detail.

I should havce been cleaer: I was specifically getting rid of any notion that HQ could engage in a series of nefarious plots to screw the tiny but plucky little kingdom out of its right to develop the Lower Churchill.

Basically, the issues you describe are to me the normal vagaries of the marketplace and the regulatory processes.

Romaine is currently suffering an attack by Innu who have sic'ed their lawyers on the project seeking injunctions. Par for the course.

But there is no great HQ plot to screw DW and his pet project. They have bigger fish to fry, I am sure. That said, of course, if you want to piss on their loafers, I am sure they will give you a smack in the head.

Then again, if someone in the province were to treat the Premier like he treats others, I sure he'd get a bit cranky too. It's a Golden Shower Rule kinda thing.

Anonymous said...



Not a thing.

No problemo.

Nothing to see.

Anything you've heard to the contrary is bullshit."

certainly not an mha said...

Some people love golden showers.