You learn a lot when you pay attention to what people say.
Like natural resources minister Jerome Kennedy when he says that “it seems that they [the public utilities board] perhaps want to assume unto themselves a greater role than is contemplated by the terms of reference.”
The provincial government wanted the PUB to do a simple job: confirm that given this particular set up, Muskrat Falls is the right choice. The set-up was comparing Muskrat Falls to a situation in which Nalcor does nothing to change the existing energy supply on the island and oil prices run to double what they are and stay there.
In other words, compared to being totally irresponsible, is Muskrat Falls the lowest cost option?
The answer to that question is, not surprisingly, a resounding yes.
The problem is that if you look outside that one scenario, Muskrat Falls isn’t the answer. It could be part of the answer at some point 25 years from now, but it sure isn’t the lowest-cost way of meeting likely electricity needs before then.
The problem for Kennedy and the provincial government is that the PUB wanted to look at those other options. They did want to go beyond the set up the provincial government wanted.
But were they doing something wrong? Not if you think that the public utilities board should do their job as laid down in the Electrical Power Control Act, 1994 even if, as in this case, they were neutered by exemptions issued to Nalcor (then NL Hydro) in 2000 by the Liberals and continued under the Tories.
The provincial government’s situation gets worse when you look at the question Jerome Kennedy and Kathy Dunderdale hold out as the “critical question” of the whole discussion:
Is Muskrat Falls the lowest cost option for the people of Newfoundland and Labrador for electricity generation?
The answer to that is an unequivocal “no”. There are cheaper ways of meeting the need in the near term. A $300 million power line across the isthmus would let Nalcor bring stranded surplus power in central Newfoundland onto the whole island grid and replace Holyrood. Natural gas from the offshore is a potentially viable solution for the longer term that could be developed in time to meet the need a couple of decades and more from now.
Right now, those alternatives are possible ones, identified by a handful of observers. Having the PUB look at them, in detail, with expert opinion, would mean that those options go from theoretically viable ones to the kind of proven options that kill Muskrat falls in its tracks.
Nalcor doesn’t give a crap if that happens. They are engineers and economists and other professionals who just want to get on with the job of running an energy company.
Muskrat Falls isn’t their project. It’s one option among many. Odds are they’ve already run enough scenarios to understand that what the critics are saying is as close to correct as you can get.
Having the PUB study this project closely only causes a problem for politicians. After all, Muskrat Falls is a political option chosen for political reasons and nothing more. The politicians are firmly convinced they are right, they are sincere in their beliefs and none of them want to “lose”, as they would see it.
And if you pay attention to what politicians like Jerome Kennedy say, you can see all of that.
- srbp -