30 May 2010

Lower Churchill decision up in the air, indefinitely

The provincial government’s energy plan  - released in 2007 - committed to a sanction decision by 2009 and first power by 2015 but in an interview with the Telegram published in the Saturday edition, premier Danny Williams said he has no idea when he might be in a position to decide on whether the project goes or not.

Asked for a firm timeline on when the provincial government will decide how to move forward with the project, Williams said:

I can’t give you that.  That’s a question that I ask as well with NALCOR and we’re not there yet.

The Telegram story follows up on comments in Friday’s Telegraph-Journal by new Brunswick Premier Shawn Graham that the cost of Lower Churchill power is a factor in whether or not his provincial energy company will buy from the Lower Churchill .

The Telegram quotes New Brunswick energy minister Jack Keir:

My view would be: show us your business case.  Show us what it would be to get here and when that’s going to be…

It could be 10 years, it could be 15 years.  And maybe 16 cents at that point is a great number.  Who knows?

That’s the first time anyone has given any hint of the sort of prices NALCOR may have floated in talks with any potential power customer.  Williams told the Telegram that NALCOR has had preliminary talks with New Brunswick.

That’s also the first time that anyone has publicly acknowledged what many know privately, namely that the Lower Churchill is at least a decade or more away from construction and may well be held up even longer.

So much for juice by 2015.

Williams also confirmed to the Telegram that NALCOR isn’t ready to talk seriously about an energy sale from the Lower Churchill with any potential customers.

We can only sell that power when we’ve got it – when we’ve built the generation and built the transmission.

He admitted, for the first time, that the province’s energy company is still working on project cost estimates.  Power purchase agreements are crucial to securing enough financing for the $10 billion energy megaproject.

This information also confirms why NALCOR balked at making a firm commitment to run power through Quebec for the Lower Churchill.  If there is no project, then there’s no reason to commit provincial cash to building  billions of dollars in transmission lines or buying up space on the Quebec grid.



Craig Westcott said...

Ed, sorry I missed the PS reunion, I bet it was fun (and I bet a bunch of people are rolling their eyes about now.

The lower Chuchill project has been dead since May 8, 2006. That's the day Rumplestiltskin swept all the serious development proposals off the table and famously declared we were "going it alone."

That's also the day the rest of the wold, that is to say the financiers, engineering companies and utility officials from Toronto to New York, who could actually help Williams develop the poject, stopped taking him and the poject seriously.

You'll remember, but others may not, that Williams first called for proposals from potential partners to develop two new generating stations in late 2004, I think it was. By March of 2005, some 26 proposals were received, including a joint one from the Government of Ontario, Hydro Quebec and SNC Lavalin. Williams held a separate press conference just to welcome that proposal, because it was a strong acknowledgement from serious players as to the potential viabilty of a lower Churchill development.

Eventually, Newfoundland Hydro whittled the prosposals down to three, including the Ontario-HQ-SNC Lavalin bid, which, looking back, was probably our best chance at developing the project.

Then, unexpectedly, Williams swept all the proposals off the table to "go it alone," and has been spinning Newfoundland Hydro's wheels ever since.

The various applications to Quebec's Regie and the fight with New Brunswick have simply been efforts to blow smoke to hide a stupendous failure, bigger even than the Abitibi boondoggle.

The Regie document makes it clear that Williams was clutching at straws. I dare say a first year law grad could have advised him his case was preposterous. That bit of smoke cost us, the taxpayers, millions of dollars.

As you pointed out, Williams' own deadline for sanctioning the lower Churchill project passed last year. One wonders how much longer he can maintain the charade before even the most gullible among us catches on that he blew his chances to develop the project four years ago.

So what's left for a legacy? Who will the new enemy be to unite the people and boost him in the polls.

He has used up the Prime Minister, Abitibi and Hydro Quebec as straw men. His new bogeyman will have to be internal. Look for an even stronger crusade against the media and the "traitors" who dare question his manic approach to government.

Craig Westcott.

WJM said...

The lower Chuchill project has been dead since May 8, 2006. That's the day Rumplestiltskin swept all the serious development proposals off the table and famously declared we were "going it alone."

That's also around the time that Dear Leader and Talky Dunderhead and the rest started (A) writing letters to Santa Claus on the Rideau for the funding to "go it alone" with, and (B) started racking up the frequent flier miles on flights to Montreal, trying desperately to get Hydro-Quebec in on the Go It Alone scheme.

Craig Westcott said...

WJM, you make an excellent point. And it's easy to blame Williams for messing it all up. Certainly, he deservedly bears most of the blame. But people such as Dunderdale and Ed Martin and many, many others have been clapping their flippers together like trained seals and barking their approval at every crazy stunt this guy has pulled in the last seven years. They are culpable too and should be ashamed for going along with things they knew were wrong.
(I should have stayed away from the friggin' blogs tonight).

Craig Westcott.

Ed Hollett said...

Wally added a bit of more recent information to your account, but essentially the two of you hit the high points.

As someone put it to me the other day, the result of the NALCOR transformation is that you now have a bunch of guys running an oil company who also have a megaproject on the go (Lower Churchill). However, the electricity portion of the company - that is the old Hydro - is pretty much slipping into the background.

As a consequence, things like wind power or the mundane customer service stuff like putting in an extra transmission line through Sunnyside doesn't get their attention. None of that is big enough and grand enough to register.

Maybe that's true; maybe it isn't but I thought it had some potential to explain a bunch of other things. I also wonder if it helps to explain why the LC project as we've seen it is actually nothing better than the 1998 plan which was shelved. When it comes to all the supposedly new things like shipping to the Maritimes, they are still "doing the calculations". Meanwhile the eviro filings all reflect the world as it was a decade and more ago, before the mill closures and before the expropriation.

It will take some future administation a decade to unf*ck what has been f*cked up; that is, if that future administration has the time and inclination to fix it all.

Mark said...

I would add that any serious investor from outside of this province who witnessed the passage of expropriation legislation, in one day, without debate, would likely rather invest in a slightly more sane jurisdiction.

Ed Hollett said...

I doubt very much an international company based in Germany is about to take over the mill with all its enviro problems from a bunch of people who just expropriated it and everything under the sun related to the original company in such a way.

Ursula said...

Mr. Hollett is this language one uses in a public forum or have I stumbled upon a poker game ?

Ed Hollett said...

I apologise if the language (complete with the deletions of certain letters) offends you.

Ursula said...

Mr. Hollett , I am not offended by the language , a little surprised is all. This site is a virtual gold mine of information . It is unparalleled in this province and is highly enjoyable .The impeccability of the word should be uppermost .

Ed Hollett said...

Well thank you for that and for the most part i think i have managed to keep my potty mouth under control.

I acknowledge a slip in this instance and I do apologise again for it. It was a poor choice of words, even if I did intend it to merely emphasise the very severe problem involved.

The comments section is where I do encourage a bit more of a rough and tumble approach, within reason.

I'll work a little better to keep myself in check.