27 September 2006

Only the brave gamble with HQ?

Konrad Yakabuski's column in the Wednesday Globe makes some worthwhile observations on Danny Williams' got-it-alone option on the Lower Churchill. If you can't get the full article using the link above, try google news and search with the words "hydro Quebec" and "konrad".

Newfoundland Premier Danny Williams decided earlier this year to go it alone on a proposed $6-billion to $9-billion (according to already stale estimates) hydroelectric development on the lower Churchill River in Labrador, rejecting an offer from Hydro-Quebec and the Ontario government to jointly build the 2,800-megawatt project. It was great politics. Newfoundlanders still feel they're being stiffed by Quebec on the massive 5,400-MW Churchill Falls hydro deal that their late premier Joey Smallwood negotiated in the sixties. They'd dearly love to see their current leader stiff Quebec on the lower Churchill.

The problem is that it's impossible. Hydro-Quebec is the biggest and most savvy hydroelectric company on the continent. When Mr. Williams turned his nose up at its offer, it took about two seconds for Hydro-Quebec chief executive officer Thierry Vandal to move to Plan B. The latter entails fast-tracking 4,500-MW worth of hydro developments within Quebec. If Hydro-Quebec's stated goal is not to prevent Newfoundland from proceeding without it on the lower Churchill, its decision to green-light competing projects in la belle province certainly casts enough of a pall over Newfoundland's project in order to make it a tough sell for Mr. Williams.
A couple of things Konrad may have missed:

1. There is a certain correlation between the timing of the go-it-alone announcement and the no-go-at-all announcement on Hebron.

2. Williams isn't actually gambling with Hydro Quebec. He is spitting in their eye. Maybe Konrad missed the memo.