13 December 2013

Friday Foursome #nlpoli

1.  Nova Scotian customers protected; this province not. (Telegram, December 11, 2013) by Ron Penney and David Vardy

The UARB has been empowered to protect the interests of consumers against their public utility, Nova Scotia Power Inc. (NSPI), a wholly owned subsidiary of Emera. Emera is a publicly traded corporation working in partnership with Nalcor Energy, a non-regulated Crown corporation, to build the Maritime Link. The government of Nova Scotia allowed the UARB to balance the interests of ratepayers and the proponent, a privately owned company, at arm’s length from government.

The government of Newfoundland and Labrador took a divergent course of action. They joined hands with their Crown corporation and made it immune from regulatory control.

They took away the powers of our own PUB, so it could not protect the interests of ratepayers. They sanctioned the Muskrat Falls project prematurely and weakened the ability of Nalcor to negotiate a better agreement with Emera. The result is that we are exposed to a one-sided agreement, tilted in favour of Nova Scotia and decidedly disadvantageous to this province’s ratepayers.


2.  Muskrat Falls could be the perfect storm (Telegram, December 11, 2013) by Cabot Martin.

This peculiar myopia was in full display recently when the Dunderdale administration happily agreed to sell Nova Scotia Muskrat power at 4.2 cents per kilowatt hour (kWh). That’s an amazingly low price given expectations six or seven years ago.

For perspective, 4.2 cents per kWh in today’s money is, after all, not much more, in real terms, than Quebec pays under the Upper Churchill contract.

And it is in sharp contrast to the 40 cents per kWh it will cost Nalcor to generate and deliver this power to Emera — not to mention the 40 cents per kWh that Newfoundland ratepayers will pay Nalcor for Muskrat power.

3.  Does the federal loan guarantee help you sleep better?  (Uncle Gnarley, December 12, 2013)

Would you like to be reminded of the power capacity of Muskrat Falls if the Quebec Court defeats the Water Management Agreement?

According to figures supplied by Nalcor, rather than 824 megawatts, the Project will supply only 170 MW of firm power in the absence of the Water Management Agreement.

What will the Dunderdale Government do if they lose the case? An answer would be speculative. But, according to the UARB, the cost to NL of obtaining its approval of the Maritime Link was in the range $706 million to $1.422 billion (page 70). Nalcor complied. Dunderdale said it was a good deal. The Premier has been given enough money to dig a big hole, but as to value any has been awarded to Nova Scotia to provide cover for her and Ed Martin's folly.

How will Dunderdale satisfy Quebec? Quebec has a longer term view than does the Government we elected. I think you should be very concerned.

4. Muskrat Madness Podcast  (Tom Adams Energy, December 12, 2013) CBC audio file.

My main points were that the federal government should have respected the Canadian constitution by staying out of the project, that the project is uneconomic and could never have happened without the federal subsidy, and that the people of NL are at risk if any of a long list of questions overhanging the project don’t pan out well.