13 May 2010

Potato, potato: hydro version

vocm.com is making much of the fact that NALCOR and Hydro Quebec are taking different interpretations of the ruling yesterday by Quebec’s energy regulator.

The truth of the whole affair is actually in VO’s news story.

Here’s what happened:  part of the ruling yesterday was on an effort by NALCOR to suspend the timelines under Quebec’s open access tariff rules that give a company with power to ship 45 days to either book the space or to signal and intention to book the space.

NALCOR didn’t want to book the space now, especially on a project that doesn’t really exist.  No markets.  No money.  Still mired in environmental assessments and all that.

So two and three years ago, they simply couldn’t afford to book space and build new lines for a project that – at the current pace – likely won’t even be sanctioned before the date NALCOR still claims they’ll be shipping power. Even today they still can’t afford to book the space because the project is entirely a figment of everyone’s imagination.

And here’s the line in the VO story that clinches it:

Nalcor counters that the Regie refused to suspend the timelines association with their request while the company was following formal complaint procedures, resulting in a termination of Nalcor's application.

So instead, there’s even more talk about a project to ship power to New Brunswick through the island of Newfoundland.  While that option has always been technically feasible, it has also always proven to be a route that doesn’t make economic sense.  You just can’t ship the power to distant markets in a way that you can still make money.

The reason is geography, especially for the Lower Churchill.  Look at it on a properly oriented map and you’ll notice it is actually farther away from any major market than any other hydro project in eastern Canada (current or proposed).

But whatever the problem with the Lower Churchill is, we know one thing for certain:  NALCOR boss Ed Martin  doesn’t think it is Hydro Quebec.