03 June 2013

No Surplus to Supply #nlpoli

Critics of the Muskrat Falls development pointed out over 18 months ago that the project would have problems meeting its electricity commitments.

Nalcor disputed that.

But this weekend, CBC’s Paul Withers told On Point host David Cochrane that Nalcor has refused to commit in writing to supply Nova Scotia with electricity beyond the original block of free electricity Emera will get as part of the basic deal.

That’s interesting. 

Very interesting. 

The original term sheet and the final capacity agreement basically commit the parties to work it out in the future on two conditions.  First, Nova Scotia has to want the power for the long term.  Second, Nalcor has to agree to supply it.

In the future.

If Nalcor had electricity to sell and Nova Scotia wanted it, then Nalcor should be locking them down and taking their cash.  After all, a long-term power purchase agreement for an export customer is exactly what the Lower Churchill was supposed to be about.

Instead, Nalcor has decided to force local ratepayers in Newfoundland to cover the full cost, plus profit and ship electricity to Emera in Nova Scotia, effectively for nothing.

What’s more, if they sell any electricity from the project to industrial customers in Labrador, Nalcor will sell the power at a huge discount.  According to Nalcor’s plan, everyone will get the benefit of Muskrat Falls except the people who will pay for it.