03 November 2011

Muskrat review muddle and Nalcor competence #nlpoli

Natural resources minister Jerome Kennedy is a smart guy.

It’s not that he is the smartest guy in a cabinet of dunderheads.

Kennedy would be one of the smartest people in any cabinet the province has ever had.

And that’s why it is safe to assume that Kennedy knows the most recent problems with the Muskrat Falls review – it’s on an indefinite hold – will take more than doing “ a better job in terms of making our [case?], getting our message out there," as he reportedly told CBC News.

For some completely inexplicable reason Nalcor, the provincial government’s energy corporation,  cannot pull together information on the Muskrat Falls project for a review by the public utilities board that it knew was coming.  Nalcor has gone through one gigantic review of the project already.  it’s not like this is their first time.

What’s even more astonishing about this latest failure is that Nalcor and its provincial cabinet backers set up the PUB review, determined exactly what the question would be and, therefore, what the outcome would be.

In other words, the review they are currently buggering up is one they control.  There are no surprises in it at all.  It is supposed to be a cakewalk.

And yet the information Nalcor cannot deliver – as it seems – is stuff they should already have by the box-load since it is all stuff they supposedly already reviewed on their own.

Just to give you a good sense of how badly buggered Nalcor is, consider the letter sent October 25 from the public utilities board to Nalcor about the delays.  There are seven specific disputes:

1. At a meeting on June 17th Nalcor stated its Submission would be filed by the end of July. This was confirmed in our letter of July 12th and at a meeting attended by a Nalcor representative on July 20th . We are therefore surprised to read in your letter that Nalcor "had not committed to that date".

2. The Board was not involved in any "collective decision" that the Submission would be delayed until the completion by Nalcor of requests for information from Manitoba Hydro International Ltd. ("MHl").

3. As confirmed at the meetings on July 20th and September 12th it was always contemplated that the MHI report would be finalized and filed after Nalcor's Submission.

4. Nalcor had not provided a list of confidential exhibits to the Consumer Advocate as stated on October 20th, the date of your letter. We understand that this list was provided late on October 21st, after it had been brought to your attention that such list had not been provided as stated.

5. The Review was initiated in mid-June, which is more than four months ago, not three as stated.

6. While the numbers are continually changing as new information is filed, Nalcor had, as of October 20th , (the date of your letter) filed answers to 166 requests for information and not 187 as stated.

7. There were responses to six requests for information (not five) outstanding for MHI as of October 20th.

The PUB corporate secretary drives home the point about delays by Nalcor in filing its own submission to its own review.  To make them a bit easier to read, here they are with the original words but with the specific dates separated out by bullets:

  • “At a meeting attended by a Nalcor representative on July 20th , a written preliminary schedule was discussed which stated, based on Nalcor's previous advice, that the Submission would be filed by July 27th followed by the MHI report in September and then public consultations.
  • “On August 2nd Nalcor sent a status update to the Board on outstanding information requests which stated that the Submission was then ‘target mid to late August’.
  • “By e-mail dated August 3rd , to Nalcor, Board staff stated that ‘We are very concerned that certain information will not be available until late August, including possibly
    your submission ‘.
  • “On September 8th, a meeting was requested with Nalcor which occurred on September 12th to discuss the outstanding information, including the Submission, and its
    impact on the Review and the schedule, including finalization of the MHI report. If there were "a collective decision" by Nalcor and Board staff to delay the Submission until after responses to MHI requests for information or issuance of MHI's report, there would have
    been no need for the August 3rd e-mail or the discussion at the September meeting on the Submission date or the letter of September 14th.”

Clearly, Nalcor cannot gets its presentations together, cannot meet deadlines it sets, cannot recall the details of the agreed deadlines accurately and in many instances simply cannot count.

If this is what the company does with a set-piece hearing on its own terms, one can only imagine what problems it might have with a genuinely independent review.

Hang on.

No need for imagination.

The Canadian Environmental Assessment Agency reviewed the entire Lower Churchill project.  It found the company failed to demonstrate the need for the project not once but twice.

And then there is the hearings before the Quebec energy regulator over a series of appeals Nalcor used as part of its series of negotiations with Hydro-Quebec over transmission access through Quebec. Nalcor failed on each appeal, in one instance largely because the company did not call any evidence to refute the contention of an expert presented by Hydro-Quebec.

Given all this, no one should be surprised that as more people learn about Muskrat Falls, and as Nalcor ramps up its efforts to sell the project to people, those same people are walking away from the project.  Polls by Telelink for NTV found that between February and September, support for the project fell from 71% to 42%.

Given all this, no one should be surprised if more and more people started to question not just the project but the Nalcor senior management team itself. Nalcor’s repeated failures of this magnitude speak to a deep-seated problem not just in the Muskrat Falls project but in the group of people running the project and the company.  Nalcor’s failures  - and they are nothing other than failures - will turn not just the voters of the province from it but potential investors and customers as well.

The Muskrat falls project is in trouble.

Kennedy’s smart enough to know it.

Jerome Kennedy has a tough job ahead of him.

Kennedy’s smart enough to know that too.

He’s tough enough to sort it out as well.

The only question is whether Kathy Dunderdale will let him.

- srbp -

1 comment:

rod said...

It's going ahead ED, whether we like it or not. Nalcor won't release any information that will weaken it's case on Muskrat Falls. They want to build it, and that's that.
Jerome will ram it home.

Any chance for us to build a Heritage fund will be crushed by cost overruns on Muskrat Falls.

God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.