A cable from the American consulate in Halifax relays concerns that Emera had about negotiations with Danny Williams on the Lower Churchill.
Dated 15 January 2010, the cable is a summary of a meeting between the American consul general and James Spurr, a senior executive with the Nova Scotia-based company. The cable is available from Wikileaks.
Emera and the Lower Churchill: "Are we being used here?"
--------------------------------------------- ------------
¶4. (SBU) Closer to home Spurr talked about another possible venture for Emera: transmitting power from the proposed Lower Churchill River project in Labrador to New England. Nova Scotia and Newfoundland-Labrador (N-L) have an MOU to explore this option which would require the construction of sub-sea and overland power lines to transmit the power. Money issues aside, there would be technological challenges to overcome in this scenario. However, Spurr emphasized that with Emera's experience in dealing with transmission systems, natural gas pipelines and its knowledge of regulatory processes, it would not be an impossible feat. The unknown factor, as Spurr explained, is N-L Premier Danny Williams. Spurr explained that N-L had been the victim of bad resource deals in the past which have left Williams very cautious if not suspicious in his business negotiations. Given that legacy, Spurr remarked that he and his senior colleagues are equally cautious in dealing with the premier, with knowledge it makes more financial sense for N-L to do a deal with Quebec than with them. In fact, Spurr indicated he wouldn't be surprised if William ended up doing just that, and leaving Spurr and colleagues to speculate that Williams might be using them to exert more pressure on Quebec to offer a better deal for N-L.
That would have been a pretty savvy guess for Emera, given that in September 2009 Kathy Dunderdale revealed publicly that she and Williams had tried unsuccessfully for five years to lure Hydro-Quebec into taking an ownership stake in the Lower Churchill.
Conventional news media in Newfoundland and Labrador have never reported Dunderdale’s comments or made any other references to talks with Quebec despite the audio of Dunderdale’s comments being readily available.
In 2010, as part of his political exit strategy, Danny Williams signed a term sheet with Emera that could lead to development of a dam at Muskrat Falls. Under the deal, Emera will receive 35 terawatt years of electricity from Muskrat Falls in exchange for the cost of building a transmission line from Newfoundland to Cape Breton. In a conference call with reporters at time the tentative deal was announced, Emera executives’ comments suggested they had balked at earlier versions of the deal in part because the cost of power from Muskrat Falls was too high.
The current proposal is based entirely on the sale of power within Newfoundland and Labrador at full cost plus a guaranteed rate of return for the provincial government energy company. Premier Kathy Dunderdale acknowledged in the House of Assembly earlier this year that Muskrat Falls power will be too expensive to sell outside the province except at discount rates.
- srbp -