31 August 2011

NL ratepayers to carry full cost of Muskrat Falls plus more #nlpoli

If there is anyone left who doesn’t understand who will pay for Muskrat Falls, let him or her read the joint review panel report:

The Panel notes that the main driver for the Muskrat Falls projected cash flow provided to the Panel comes from Nalcor’s projected Island domestic rates that continue to escalate by two percent per annum even after Project debt payout. There are also questions about the regulatory treatment of Muskrat Falls by the provincial Government and the Public Utilities Board. It is not clear how much of the overall Muskrat Falls cost would be permitted to be passed on to the Newfoundland rate payer and what the implications are for the ability of Muskrat Falls to generate a long-term revenue stream for the Province. [ Emphasis added p. 24]

If you use electricity in Newfoundland and Labrador, you will pay the entire cost of Muskrat Falls and its transmission lines to the island and tidy “return on equity” that actually will exceed the original forecast.

Not bad at all, if you aren’t one of the people who will be forced to pay for the project.


- srbp -