05 December 2011

Dazed and Confused, Muskrat proponents version #nlpoli

Premier Kathy Dunderdale and Emera chief executive Chris Huskilson.

Par for the course for the former to be dazed and confused.

Somewhat surprising to find the latter a bit off.

The issue:  the cost of Muskrat Falls electricity.

Kathy Dunderdale told the world  - via CBC Radio - in November 2010 that it would cost somewhere between 14.3 and 16.5 cents per kilowatt hour to make electricity at Muskrat Falls. That was the estimated wholesale cost of the electricity from the Muskrat project, not including any transmission costs.

Last week, Emera boss Chris Huskilson said that electricity priced in that range was too expensive for Nova Scotians.

People in this province rightly wondered what was up given that their final price for electricity after Muskrat Falls comes along will be absolutely, guaranteed, without question or doubt way higher than 14 to 16 cents per kilowatt hour. 

After all, the public utilities will set the price.  By law, they have to look at the cost of production and transmission and distribution, account for any additional costs the companies – Nalcor, Newfoundland Power and now Emera – might have and then stick a guaranteed profit for them on top of that.

And that very expensive power from Muskrat Falls plus the very heavy debt that goes with it will push electricity costs up dramatically from where it is now.

Over the weekend, the Telegram quoted now Premier Kathy Dunderdale saying:

Dunderdale said the cost of Muskrat Falls power will mean that Newfoundlanders will be paying 14.3 cents for electricity when the project comes online.

Pure nonsense.

Even Nalcor won’t hazard a guess – in public - at what consumer rates will be in this province after Muskrat comes on stream.

And if that comment of hers about consumer prices is suddenly true, she’ll have to explain why she said one thing now and a year ago said something dramatically different.

But then there’s this bit:

"We're not going to get 10 cent power, but Nova Scotia may be able to get 20-cent power, or 11 cent power," she said. "They have transmission already in place. They have other things they can draw on that we don't have here in the province. So you're not comparing apples to apples."

At first glance that might seem confusing but here’s what she might be trying to get out.

Nova Scotians are not going to get 10 cent power from Muskrat Falls.  Under the deal with Nalcor, Emera will get a block of power for free.  And they’ll get access to more power from Muskrat Falls for less than 10 cents per kilowatt hour.

And yes, for those already familiar with this, that would be the same Muskrat Falls power that cost at least 14 cents to produce and then however much to transmit it besides.  The Nova Scotians will get it delivered to their door for less than the cost to make it.

As for the 20 cent and 11 cent power Dunderdale is talking about, someone will have to try and get that out of her because it makes no sense at all. it has nothing to do with the price of anything, anywhere real.

Meanwhile, provincial natural resources minister Jerome Kennedy is quite right to scratch his head a bit over Huskilson’s other comments about Muskrat prices.  As Kennedy noted in another Telegram story, Huskilson told Nova Scotia legislators in October that:

The uniqueness of that particular type of investment is that we are actually getting the energy from this project at the project economics. We’re paying no more and no less than Newfoundlanders will pay for this particular energy from this particular project. In fact, it’s a very, very advantageous situation that Newfoundland is giving us access to this resource at the same cost that they are seeing for the resource. So that’s the position and the opportunity that’s before us.

Simply put, Huskilson’s comment is not true.  Under the term sheet, Emera will get a block of power for nothing and an extra load for less than what Nalcor says it will cost to produce the power.  Jerome! even uses the same figure – 14.3 cents per kilowatt hour – that everyone knows now is Nalcor’s working, low-end figure for Muskrat costs.

Once again, we see the basic problem for the politicians and company bosses pushing the Muskrat falls project:  they cannot keep their stories straight.

No wonder public opposition to the project is growing.

- srbp -

2 comments:

Shannon Reardon said...

Didn't Huskilson say that in a committee in October and it was reported only last week? In any event, curious comments and curiouser that what he and Dunderdale have publicly said don't jibe.

Edward Hollett said...

Many things about the project don't add up, including the fact that the Liberals and the NDP haven't told the truth: both parties endorse the project.

The Liberals under Yvonne Jones, for example, are only quibbling about some local benefits. Run a power line into Yvonne's district and she'd fold up like an accordion.