The Telegram’s Pam Frampton has a neat column this weekend on Jerome Kennedy, Muskrat Falls, and the provincial government’s problems with explaining to people in simple terms why Muskrat falls is a good idea.
Frampton nails the biggest problem simply enough:
The problem with the government’s Muskrat Falls message till now is that it has been a moving target. One week the project was all about clean energy, the next it was job creation, then it was all about being an affordable energy source, then it was a means of foiling Quebec, then it was a lure for mining companies.
Then she notes the critic’s arguments and the fact they they were,as Frampton, puts it often “shrilly spun” by government officials and others.
Kennedy tried to put a new face on government’s messaging during his appearance at the Telegram’s editorial board. as much as Kennedy seemed to change both his tone and his content, none of that stopped Kennedy from spinning - to use Frampton’s word - either his own position or that of the critics.
As a minister, or as a government, our obligation is to ensure as best we can that factual information is put out,” he said.
“That same obligation doesn’t necessarily attach to our critics, and I can give you an example. … (One critic claimed) ‘power rates will double.’ Well, that wasn’t correct, but it resonated; it was something that was put out there in the public and it took us months to be able to combat that.
Regular SRBP readers will know that while government may have an obligation to provide factual information, what they’ve been doing on Muskrat Falls is often providing information that is only a small portion of the full story.
Take a look at the statement right there and you can see Kennedy doing the same thing. Kennedy stated a fact: the obligation, what people expect is that government will be factual.
Notice that Kennedy doesn’t tell you at any point in the comments quotes that he and his colleagues actually met that obligation. That won’t stop a great many people from reading something into Kennedy’s comments that isn’t there; but Kennedy didn’t say he and his colleagues met the obligation to be factual.*
And with that careful use of English behind him, Kennedy then proceeds to attack his critics by suggesting that no only are they not under the same obligation to be factual but that they haven’t met it. Kennedy gave half the truth at the front end when speaking of government’s position and shrilly spun an attack on unnamed critics of the project.
Years in the courtroom taught Kennedy how to use language to his advantage. But no one should be fooled into believing that anything has changed in Kennedy or the provincial government’s approach: they are still self-massaging their message. That is undermining their credibility.
The Cost of Muskrat Falls
Your humble e-scribbler is one of the first critics of the project who started talking about the project and rates. A couple of weeks before Danny Williams announced the scheme, SRBP noted that local ratepayers would pay the full cost and wind up subsidizing others.
But on what that cost would be, the calculations was simple. If you looked at the way the public utilities board set electricity prices, a crude calculation of the cost of the project, and a likely period to pay it off, you’d be looking at electricity costing way more than the 10 or 11 cents per kilowatt hour residential ratepayers currently pay.
What’s more, the cost to make electricity quoted by Kathy Dunderdale from November 2010 onward – up to 16.5 cents per kilowatt hour - looked to be generally along the same lines. Go through SRBP and you’ll see plenty of references to Muskrat Falls and a doubling of rates. This one, from November 2010, is typical.
The Whole Story Finally Emerged…sort of
By the winter of 2012, in other words more than a year after announcing the project, the provincial government and its supporters finally started talking in greater detail about what the cost of electricity from Muskrat Falls might be.
The 16.5 cents was not the cost of making electricity at Muskrat Falls but the rate paid by consumers. It was a combination of the existing rate and the cost of Muskrat Falls. And that cost?
Well, even Wade Locke buggered it and himself up by picking only a part of the cost when he delivered a disastrous endorsement of Muskrat Falls in the guise of an impartial assessment of the project.
It wasn’t until sometime later when Nalcor finally started talking about the cost of Muskrat Falls electricity and how they got the number Locke quoted. Nalcor and the provincial government knew all of this back in 2010 but they never discussed it publicly. Nalcor released the information in response to questions through the public utilities board review.
Turns out that under the usual way of costing a project like this, Nalcor projected in 2010 that Muskrat Falls electricity would cost about 21 cents per kilowatt hour at Soldier’s Pond. Rather than use the cost of service model, Nalcor decided to set up a new way to price electricity. One part of Nalcor (NL Hydro) would buy electricity from another part of Nalcor (Muskrat Falls) over an unusually long period of time. Then Hydro would sell the electricity to the company that would distribute it to consumers (Newfoundland Power). The end result would be to push the cost of Muskrat Falls off on future consumers and (artificially) lower the apparent cost to consumers up front.
And the actual rate consumers will pay? We don’t know, as Nalcor was fond of saying all along. We don’t have the final Muskrat Falls project costs for one thing. We won’t know with certainty what the cost will be until near the end of this decade when the project comes on line. What we have now are estimates, based on rising costs of the project.
The Frequency of Apparent Dissembling
Kennedy is right: the issue of electricity prices resonated with consumers. The spectre of high costs bothers them.
That’s why Kennedy and his colleagues talked about the cost of Muskrat Falls relative to an arbitrary and largely concocted alternative of suing only oil to make electricity. Our project will make prices stable, they say. Our prices, they insist, will stay down.
What resonated with consumers more than anything else, though, was the apparent dissembling by cabinet ministers and officials when it came to talking about rates. They squirmed. They avoided. They talked only about part of what they knew and not all of it.
Now to be sure they could have told the simple story from the outset:
- here’s the cost using one method.
- we didn’t think that was right for consumers.
- that wouldn’t be acceptable to consumers
- so we took this different approach
- and here’s what the cost estimate is now.
- and that estimate is made up of making the electricity at such and such a rate and transmitting it at such and such a rate.
- The cost is lower than the alternatives (hold up a comparison of the alternatives, if you have it)
Instead, the frequency at which the government and its supporters appeared to be dissembling – avoiding the facts and the truth – matched the frequency at which the public’s bullshit detectors go off.
The result was as predictable as it has been obvious. Kennedy and his colleagues have been fighting that issue for months and they have been having a hard time with it. Odds are they are going to continue having problems.
You can tell they are going to continue to have problems by the way Kennedy spoke to the Telegram editorial board. His tone of voice may have changed. But what he was saying is the same stuff that has gotten the Tories into trouble with voters since they started trying to sell Muskrat Falls in November 2010.
Kennedy should know by now that self-massaging their message doesn’t work. All the dry stroking just rubs people the wrong way.
* added “; but Kennedy didn’t say he and his colleagues met the obligation to be factual.” for clarity