07 December 2009

NL Hydro intervenes in Hydro-Quebec FERC application

The way some people talk, you’d think this was the first time Newfoundland and Labrador’s energy company had intervened in the United States over wheeling rights for electricity from Labrador.

Well, for those who think that, guess again.

The year was 1997 and then-mines and energy minister Rex Gibbons announced:

"Hydro's objective is to secure the province's right to transmit electricity from Labrador to North American markets on terms that are open and non-discriminatory. … This is consistent with FERC's Order 888, requiring that `Customers in the United States should not be denied access to cheaper supplies of electric energy, whether such electric energy is from a domestic source or a foreign source'."

As it turned out, NL Hydro cut its first deal with Hydro-Quebec a couple of years later to sell surplus power from Churchill Falls.  The first deal was a straight sale to Hydro-Quebec.  The price at the Quebec border was basically the same as the price obtained at the US border or farther south, after all the wheeling and other charges were taken into account. As you can see from this 2000 backgrounder, NL Hydro has been on top of the whole issue for some time.

Curiously enough, the situation hasn’t really changed all that much in 10 years or so, despite all the chest thumping that’s been going on lately. NL Hydro gets roughly the same price per kilowatt hour from the April deal that it got from the previous deal  - signed in 2004 – that saw the power sold to Hydro-Quebec at the border.