Newfoundland and Labrador Hydro chairman Dean MacDonald tells an Ontario energy association meeting that when it comes to the Lower Churchill development "[w]hen you look at what the impediments are in front of us [to transmit power across Quebec to Ontario], we really have no alternative" than to build a power line through the Maritimes and ship power into the United States.
Meanwhile, Premier Danny Williams tells local reporters that, contrary to the implication of MacDonald's comments, Hydro hasn't abandoned the East-West sale potential.
On the face of it, this speech looks like a negotiating ploy by Dean. Tell the Ontarians we have power but can't get it across Quebec to you. Therefore, pressure Ottawa to intervene. In fact, the Globe story makes that pretty clear:
He urged Ontario energy executives and government officials to pressure Ottawa to intervene in the dispute between Quebec and Newfoundland and Labrador, which are "rolling around in the mud" over the issues of access to markets and transmission systems.
Newfoundland has filed a submission with Quebec regulatory officials to require Hydro-Québec to deliver Lower Churchill power to markets through its transmission system, but it's a long process, Mr. MacDonald said. "With the lack of a connection between the provinces east-west ... we'll follow the path of least resistance, which is south," he said.
Then again, Dean's remarks also fit with comments he's made in the past and echoed by the Premier. Cost isn't an issue with the route through the Maritimes, according to both Williams and MacDonald; "if it costs us an extra billion to go north-south, we'll be the masters of our own destiny."
There's no conflict between Williams and MacDonald. They are both consistently singing the same song and it would perfectly in character for both men to use a speech like this to try and elicit some political intervention in the case.
There is a problem with their approach, however.
MacDonald was speaking to a sophisticated audience that can crunch the real numbers on the Maritimes route. These people know the idea of the alternate route costing "an extra billion" lowballs the real number, lowballs the overall cost and therefore doesn't even come close to explaining how the power can get to an American market at a competitive price. it's an historic problem and one that might only be solved - as has been suggested - by selling the power at or even below cost in the initial stages.
These Ontario energy players also know that MacDonald's team has so far only been able to turn up only one exploratory memorandum of understanding with one theoretical, potential customer and even that was for only 200 megawatts.
They likely think the whole posture MacDonald is taking is a big bluff.
How can you tell?
MacDonald said so: "I think a lot of people thought we were bluffing. We're not...".
When you have to state categorically that you aren't bluffing, that's a pretty big clue you are spinning a tale in which even you lack confidence.
Why not just promise to hold your breath until you turn blue?
It would be about as convincing and about as effective.
-srbp-