05 September 2012

Upper Churchill – an unexplored alternative #nlpoli

Muskrat Falls “not a competitive solution”

SRBP Exclusive

Over the next 55 years – the Muskrat Falls planning period – consumers in Newfoundland and Labrador could achieve savings of up to $4.0 billion if Nalcor used electricity from Churchill Falls, even if the provincial utility purchased the electricity from its subsidiary at market rates.

That conclusion is contained in  “Upper Churchill – the unexplored alternative”, a new analysis and commentary by JM, author of a 175 page analysis of the Muskrat Falls proposal submitted to the public utilities board as part of the board’s review.

“It is clear that Government and Nalcor did not provide a full, costed screening analysis of all the potential options,”  JM wrote in an e-mail to SRBP, “especially in the context of the shale gas revolution happening in the United States.”

JM reviews Muskrat Falls costs, assesses the merits of using Churchill Falls power in lieu of Muskrat Falls, and provides three mechanisms that could be used to gain access to the resource. 

JM notes that while the 1969 contract with Hydro-Quebec will be automatically renewed in 2016,

…the renewal … does potentially weaken some of the legal arguments successfully used by Hydro-Quebec in the earlier court cases. The de-regulation of the North American electricity markets should also ensure that Newfoundlanders gain access to energy at competitive rates. In the current energy climate Muskrat Falls is not a competitive solution.