Natural resources minister Jerome Kennedy is right:
“There's obviously an obligation…on any member in this house when presenting a petition to ensure that accuracy, to ensure that statements made to this house are ones that can be relied on ... This is a very serious matter."
The obligation for accuracy doesn’t just apply to petitions. It applies to everything a member of the legislature says.
And if the member of the House is also a cabinet minister or the Premier, then the obligation for accuracy goes up another few notches.
The obligation doesn’t just extend to what the politicians say. They should also disclose what they know when it is relevant, especially when most people wouldn’t have the details ready to hand.
Take, for example, Kennedy’s response to a question from Liberal leader Dwight Ball on Monday about the prospect for exports from Muskrat Falls:
…there are always export markets; when we met with the various energy advisors in the United States, the way they put it is that there will be a market. The question, you pay, or how much you will pay is one issue. Now, what we know…Speaker, is on the spot markets in the United States, rates can vary from $40 to $100 based on time of day, time of year; what the Maritime Link … gives us is access to the markets, but the deal with Emera also then allows for transmissions costs that will cost very little to get it to the border.
Yeah, well, sort of.
Unless something truly bizarre happens, the United States will need electricity in the future. So yeah “there are always export markets” and “there will be a market.”
The question, indeed, is what those markets will pay for electricity.
Jerome says “$40 to $100.” What he left off in the heat of the moment was “per megawatt hour”. Ball asked his question about the price for kilowatt hours. Nalcor’s average sale price for electricity from Churchill Falls last year was 4.5 cents per Kwh, according to Ball’s comment. Check the news reports last month and you’ll see that Manitoba sells electricity into the United States for 3.5 cents per Kwh.
To translate, then, Jerome’s export prices are between 4.0 cents and 10.0 cents per Kwh. That matches neatly with what both Nalcor and other exporters are finding. By the way, did you notice in all that back and forth in the House that Nalcor is exporting electricity from Labrador into the United States?
Anyway, so the export markets are paying around 4.0 to 4.5 cents per kilowatt hour for electricity. We can even allow that when supply is really tight and demand is high, they might get 10 cents. But the average price is likely less than half that.
Well, even if we use the magical Muskrat pricing formula Nalcor is using to hide the cost of the project from the consumers who will be paying for all of it, the electricity from Muskrat falls costs about 7.5 cents per kilowatt hour to make. Right off the bat, you can see that Muskrat falls electricity is twice what the current market will pay for the wholesale cost of the electricity itself.
Unfortunately, Muskrat Falls is about as far as you can get from the markets we are talking about. We have to get it to those markets. That costs too. you have to pay to move the power through Newfoundland, Nova Scotia, and New Brunswick in order to get it to the United States. Be really, really, sooper insanely optimistic and imagine that cost is what it will take to get the electricity to Sin Jawns using the Nalcor magical imaginary Muskrat falls price: another 7.0 cents per kilowatt hour.
Right now you are at the American border with your electricity that costs 14.5 cents per kilowatt hour. If you don’t sell it to the gang in Maine, then you have to pay to run it along every other transmission system between New Brunswick and your imaginary customer. Your electricity that is already three times the cost the market will bear is going to get even more expensive the farther you go.
Even on the optimistic end of things, your electricity from Muskrat Falls would wind up being about double the American market price. Face it: no one is going to buy your electricity in the United States. Muskrat Falls is just too expensive.
We already know this. We know it because Premier Kathy Dunderdale said so:
They are not going to buy it from us, Mr. Speaker, for 14.3, so we have to go into the market and sell at what the market can bear.
And the rest of this is a really old story for those of you who have been following these e-scribbles since the Old Man announced this Muskrat Falls fairy tale and then ran from the Premier’s Office to do guest appearances at a local McDonald’s like some geriatric Tiffany.
After all that, though, you realise that what Jerome Kennedy really said was that there are markets but that this Muskrat Falls thing isn’t about exports. It isn’t even about the glories of a deal with Nova Scotia that so far doesn’t look like Nalcor is ever going to close.
The crappy export prospects are why Jerome and his colleagues now talk about Muskrat Falls as the magic answer for a bunch of mining companies in Labrador instead of as the magical way to make millions from the Yanks.
Oh yeah, but it will still bring all those jobs.
Except that we won’t be getting any clue as to what Nalcor might be doing with Muskrat Falls until October.
Maybe.
No wonder Jerome is not telling all he knows about Muskrat Falls. Instead, he wants to talk about forcing the Hebron partners to build a part of the project at Nalcor’s Bull Arm site even though Ed Martin and the Hebron negotiators gave it away in the negotiations four years ago.
-srbp-
