Pages

▼

31 May 2008

Energy Corporation of Newfoundland and Labrador (Part 1)

[Update: 02 June; added chart of EnerCorp organization]

Several e-mail requests arrived asking for some comment on the energy corporation bill currently before the House of Assembly.

In the interests of helping people to pick apart the aspects of the discussion, here are some general observations on the bill, the Energy Corporation of Newfoundland and Labrador(EnerCorp) and some of the issues that have turned up in the House of Assembly and news media.

The one characteristic of the current discussion is that many of the people commenting publicly have not read any of the documents or pieces of legislation shown below.

Anyone wanting more detail can contact your humble e-scribbler directly at horridlm at gmail dot com or the usual bondpapers at hotmail dot com.

In Part 1, we'll set the table - so to speak - by giving links to some general information. In Part 2, we'll look at some of the specific issues raised in the past two weeks.

1. Legislation

To start out, you can find several pieces of legislations that apply to this discussion. These will all come up later in this post to one extent or another.
2. Energy Plan

Released in 2007 after a decade in development, the energy plan describes in very general terms the government's intentions for the energy sector.

3. Energy Corporation of Newfoundland and Labrador

From the 2007 energy plan:
This Energy Corporation will be wholly owned by the province and will be the parent company of Newfoundland and Labrador Hydro (NLH), Churchill Falls Labrador (CF(L)Co) Corporation, other subsidiaries currently owned by NLH and new entities created to manage the province’s investments in the energy sector. This will provide a structure that permits both regulated and non-regulated activities to exist and grow within separate legal entities.
EnerCorp is not Newfoundland and Labrador Hydro with an expanded mandate.

That approach, implemented with changes to the Hydro Corporation Act in 2006 was abandoned in 2007 with the introduction of two new bills, one of which created the energy corporation and the other covering the Hydro corporation.

Under the new approach, EnerCorp is the parent or holding company, with a revised Hydro Corporation as a subsidiary. Among other things, Bill 35 will change or will allow changes to how these and any new subsidiaries are incorporated

While Hydro had several subsidiaries, these are now all subsidiaries of EnerCorp separate from Hydro.

This includes Churchill Falls Labrador Corporation (CFLC0), for example the joint venture with Hydro Quebec to manage Churchill Falls. Twin Falls Power Corporation, a joint venure with two private mining companies to supply power to Labrador West is a subsidiary of CFLCo. Gull Island Power Corporation and the Lower Churchill Development Corporation are also now subsidiaries of EnerCorp, not of Hydro.

The old structure can be seen in this chart:


The new structure can be seen more clearly in the EnerCorp strategic plan.

This is Bond Papers' version of the same chart:






















4. Some other jurisdictions
-srbp-
at