12 January 2012

Muskrat Falls: from worse to worser for Dunderdale and Company #nlpoli

Add Ron Penney to the list of former senior provincial public servants questioning Muskrat Falls and/or the way the provincial government is handling the project.

In a letter to the Telegram, the former Peckford-era [deputy] justice minister joins with David Vardy to call for a full, independent review of the MF proposal through the public utilities board.  Vardy, a former Clerk of the Executive Council, and Penney, one of the team that negotiated the 1985 Atlantic Accord, say that they have followed the discussion and that given the serious of the issue “fully expected” that the public utilities board would get the time needed to complete its review properly.
We were therefore not surprised by the recent request by the board to have the deadline extended for the completion of the reference until June 30 and fully expected Minister Jerome Kennedy to provide the extension. 
We were shocked by the immediate decision of the minister to deny the request. The stated reason is to allow a debate in the House of Assembly in March but there is no reason why the House cannot debate this in July, following the completion of the reference.
Penney and Vardy call Muskrat Falls the largest public works project ever undertaken in the province and “the most important public policy issue ever to have faced Newfoundland and Labrador”.
It requires careful and comprehensive independent analysis and a public debate, informed by that analysis. That is the purpose of the reference to the board and to restrict that review does a disservice to the people of the province.
They say that the project may “expose us [i.e. the people of the province] to significant risk”.  They are absolutely right and most of that risk, don’t forget is undisclosed.

Vardy and Penney draw attention to points that will be very familiar to SRBP readers:
Major infrastructure projects like this inevitably cost considerably more than originally estimated so we might well double the debt of the province at a time when it is likely that offshore revenues are in decline and our expenditures are increasing to meet the challenges posed by our changing demographics.
The solution, they argue, is to let the PUB assess all potential options.
The board should be allowed to consider the other issues that have been raised publicly over the past year such as the use of natural gas as feedstock for the Holyrood thermal plant, incentives to reduce demand during the winter peak, conservation measures, and estimates of future population and electrical load growth, among others. Furthermore, we maintain that these issues are legitimate questions within the review of the isolated island alternative to Muskrat Falls, even though we believe that the board should be unfettered in its mandate.
-srbp -


Jerry Bannister said...

So the provincial government's position seems to be that while the House of Assembly was too unimportant to sit in the fall, now it's suddenly so important that the biggest project in the province's history must be rushed ahead to accommodate its winter session.

Edward Hollett said...

And while they can forecast the price of oil to the penny, they can't tell us what they will charge for electricity per KWH.

Or, as Jerome said, these figures they use are in 2017 dollars. 6.2 billion 2017 dollars.

So that means that while oil will only skyrocket in price in their world (200 bucks plus a barrel), the actual construction of this project will wind up being a tiny fraction of what it was supposed to cost in 1998, plus they've added another 1.5 billion cost of a line to NS on top!

How many contradictions can you find in that?

Greg Mallard said...

I think Ron Penney was a Deputy Minster and not "Minister" as stated in your post.

Additionally, it was the first Atlantic accord which was flawed as negotiated by Mr. Penney and other provincial bureaucrats which had to be renegotiated later.

He's not exactly a stellar performer.

I concur absolutely the current Nalcor proposal for Muskrat is much too vague, or inaccurate, to proceed as written.

Edward Hollett said...

Thanks, Greg.

1. He was a deputy minister. I dropped that word inadvertently.

2. I don't know where you get that idea the 1985 deal was flawed such that it had to be renegotiated. It hasn't been renegotiated and, while it may be missing some elements off the provincial wishlist from the early 1980s, it has served the province extremely well in the meantime..

Perhaps you've been misled by some of the more recent political hype and in some cases blatant falsehoods on that point. ;-)