06 December 2012

Paying Attention to Details #nlpoli

Gabriella Sabau is an economics professor at Memorial University's Grenfell campus out in Corner Brook.

Sabau thinks Muskrat Falls is wonderful idea for three reasons.

For one thing, it’s green.  For another thing, the electricity rates for consumers are supposedly low.

And for a third thing, "there will eventually be affordable power that will help attract business and investment." 

Sabau noted the overall cost, though:

“The initial cost of the infrastructure is really high and those initial costs need to be paid up front,” she said.


Paid up front.

And "eventually" the power will be affordable for consumers.

As it seems, Professor Sabau doesn't know much about Muskrat Falls.  If she did, the economics professor would know that the project costs won't be paid up front. In fact, the project financing is deliberately set up to push the costs off to the distant future.

And it is consumers in the province who will be passing those costs later rather than sooner.  “Eventually” will be a long time for consumers.

On the affordability thing, Sabau will evidently be quite happy.  Business will find the power eminently affordable up front. Because consumers are paying all the costs plus profit, business and export customers get a gigantic deal right at the beginning.

"Eventually" comes quickly for them.   In fact you could say that businesses and export customers will get the huge benefit  immediately.

And those consumers for whom “eventually” really means eventually?  Well, they won’t likely see profit from their considerable investment during the current century.

"Eventually" for the people paying the bills really will be "eventually" as in some undefined point in the far distant, almost incomprehensibly far away future.

You really have to love economists who pay attention before they offer opinions.