30 May 2010

Lower Churchill decision up in the air, indefinitely

The provincial government’s energy plan  - released in 2007 - committed to a sanction decision by 2009 and first power by 2015 but in an interview with the Telegram published in the Saturday edition, premier Danny Williams said he has no idea when he might be in a position to decide on whether the project goes or not.

Asked for a firm timeline on when the provincial government will decide how to move forward with the project, Williams said:

I can’t give you that.  That’s a question that I ask as well with NALCOR and we’re not there yet.

The Telegram story follows up on comments in Friday’s Telegraph-Journal by new Brunswick Premier Shawn Graham that the cost of Lower Churchill power is a factor in whether or not his provincial energy company will buy from the Lower Churchill .

The Telegram quotes New Brunswick energy minister Jack Keir:

My view would be: show us your business case.  Show us what it would be to get here and when that’s going to be…

It could be 10 years, it could be 15 years.  And maybe 16 cents at that point is a great number.  Who knows?

That’s the first time anyone has given any hint of the sort of prices NALCOR may have floated in talks with any potential power customer.  Williams told the Telegram that NALCOR has had preliminary talks with New Brunswick.

That’s also the first time that anyone has publicly acknowledged what many know privately, namely that the Lower Churchill is at least a decade or more away from construction and may well be held up even longer.

So much for juice by 2015.

Williams also confirmed to the Telegram that NALCOR isn’t ready to talk seriously about an energy sale from the Lower Churchill with any potential customers.

We can only sell that power when we’ve got it – when we’ve built the generation and built the transmission.

He admitted, for the first time, that the province’s energy company is still working on project cost estimates.  Power purchase agreements are crucial to securing enough financing for the $10 billion energy megaproject.

This information also confirms why NALCOR balked at making a firm commitment to run power through Quebec for the Lower Churchill.  If there is no project, then there’s no reason to commit provincial cash to building  billions of dollars in transmission lines or buying up space on the Quebec grid.