27 February 2014

The Sound of Silence #nlpoli

With all the talk the past couple of days about the relationship between the provincial government and the provincial energy corporation, it might be a useful time to ask a fairly simple question:

What does Nalcor do?

Might seem like such an obvious question that it you are laughing, but hang on a second and let’s see what turns up if we go back and look at what the Conservatives said in the past about the energy corporation.

First place to look would be the law passed in 2007 to create the provincial energy corporation.  Clause 5 lists the things the corporation is supposed to do:

Objects of the corporation

5. (1) The objects of the corporation are to invest in, engage in, and carry out activities in all areas of the energy sector in the province and elsewhere, including,

(a) the development, generation, production, transmission, distribution, delivery, supply, sale, export, purchase and use of power from wind, water, steam, gas, coal, oil, hydrogen or other products used or useful in the production of power;

(b) the exploration for, development, production, refining, marketing and transportation of hydrocarbons and products from hydrocarbons;

(c) the manufacture, production, distribution and sale of energy related products and services; and

(d) research and development.

(2) Notwithstanding subsection (1), the corporation may engage in those other activities that the Lieutenant-Governor in Council may approve.

Seems simple enough.

Obvious, really.

Obvious but there’s something missing.  There’s nothing here to explain why the government wanted to create this energy corporation.  It’s the “why” thing we are looking for.

To find that, you’d go to the debates in the House of Assembly.  Normally, the minister who speaks first about the bill on second reading gives the explanation of what the government is doing, what they want to accomplish,  why they are introducing this particular law.

So go to the Hansard for June 4, 2007.  Here’s all that Kathy Dunderdale had to say on second reading of An Act to Establish and Energy Corporation For The Province:

Thank you, Mr. Speaker.

The legislative changes that these two pieces of legislation speak to will provide for the creation of an energy corporation. The Energy Corporation Act, in fact, will allow for the creation of an umbrella company to separate the regulated operations of Newfoundland and Labrador Hydro from the unregulated activities associated with the expanded mandate of the energy corporation.

Mr. Speaker, I will arrange, at the convenience of all parties, to provide a technical briefing to Members of the House of Assembly so they fully understand our intention with regard to these two matters.

Thank you, Mr. Speaker.

101 words, less the nine words taken up with thank yous and needless references to Mr. Speaker.

92 words.

The only reference to “why” is that bit in the last paragraph in why Dunderdale said that she would arrange a briefing for the opposition members so that they “fully understand our intention.”  As for the rest of us, there is not a word from Dunderdale’s mouth that tells what that intention is.

Tom Rideout – as government House leader – closed debate on second reading the next day (June 5) and said nothing more about government’s intention for the energy corporation or about energy policy. 

The only other references Dunderdale made to the energy corporation came in debate on June 4 about the hydro corporation in another, new bill:

“With the introduction into the House of Assembly of the proposed Energy Corporation Act we are establishing a new energy corporation to separate the regulated operations of Hydro from the unregulated operations of the energy corporation. By completing this restructuring, our government is ensuring that energy investments in non-regulated activities will not affect electricity rates. The new corporation will own 100 per cent of Hydro and its subsidiaries. This structure follows standard practices in other jurisdictions where a utility is engaged in regulated and unregulated energy markets.”

A bit later she said this:

“While Hydro will be 100 per cent owned by the new energy corporation, the legislation prohibits the disposal of those shares in any way.”

Followed by:

“Government has full control of the energy corporation”


“Finally, and most importantly, we believe that creating this separation between the supply of electrical power to customers in a rate regulated setting and the investments in other energy ventures that will be undertaken by the new energy corporation is an extremely positive step.”

Odd, though, that Kathy didn’t discuss at any point the reasons why the provincial government would have unregulated bits that needed separating from the regulated bits.  Lorraine Michael, Yvonne Jones, and Kelvin Parsons spoke at great length about the bill and the energy corporation but no one from the government benches did.

Very odd, indeed.

A news release issued on May 31, 2007 said much the same sort of thing.  In other words, aside from mentioning the energy plan that the government hadn’t finished writing yet in the release, no one from the provincial government ever explained what they wanted to do by creating an energy corporation and why.

The release did mention the Conservative Party’s 2003 policy commitment but there wasn’t much beyond the mention.  The Blue Book had three specific policy objectives.

First,  the Conservatives committed to either restructure hydro or create a new company “with a mandate to retain equity in the Province's oil and gas resources.”

No one really explained what retaining equity was all about.  That’s really bizarre given that in 2007, the Conservatives were still locked in a row with the oil companies over developing Hebron. One would  think that the debate in the House was a perfect opportunity to do just that.

For some reason, they didn’t.  Not by accident, but obviously by choice.

Second,  the new energy company was supposed “to absorb all the expertise it can from the major oil companies, so that the Province will have the capacity and expertise to participate in and benefit from decisions regarding exploration, production, and processing of oil and gas in the Province.”

Pretty vague, if you stop and think about it. And it doesn’t really explain how the government didn’t have the knowledge accumulated over 30 years to participate in and benefit from decisions about offshore oil and gas development.  After all, that’s exactly what successive governments had been doing since the 1970s.

Again, the debate on such an important step as creating the energy corporation gave the perfect opportunity to explain what the government was doing and why.  But they gave it a miss when the Conservatives had a chance to explain what they were doing.

How odd.

Third, a “major mandate of the Newfoundland and Labrador Energy Corporation would be to work with the major oil companies to develop natural gas as a competitively priced alternative energy source for the Province, and for transportation to Canadian and U.S. markets.”


A big idea and yet not a word about it in an election year when the government was supposedly delivering on one of its most important promises.

Kathy Dunderdale delivered fewer than 100 words in the House of Assembly on the bill that created Nalcor.  No other member of the government party spoke on the bill, except Tom Rideout, and he didn’t add anything significant to what Dunderdale had said.