21 September 2016

Not talking but talking about something #nlpoli

It took them a few days but the folks at Nalcor managed to put out a statement that addressed the possible talks with Hydro-Quebec about the Lower Churchill.

They didn't post it to the Nalcor website or anything but a few people were flicking it around on Tuesday.  They must have tweeted it out or something.*

Anyway, here is a picture of it.

Now we can see what it says, line by line.

1.  Nalcor is focused on the effective execution of the Muskrat Falls project.

Fair enough as a claim or as a goal, but the evidence to date is that they have failed miserably if what they were trying to do was the "effective execution" of the Muskrat Falls project.

Of course, if spending an enormous amount of public money on something that makes no sense, then they have been more effective than anyone could have imagined.

But anyway, that have this enormous debt-pig that - as of last month - pretty much unable to deliver what the folks at Nalcor said it would.  They have to do something to make this sucker work.

2.  We are not in talks with Hydro-Quebec to develop Gull Island.

Nice, emphatic and unequivocal denial.  Scuttlebutt is wrong, apparently.  But hey it is nice to have a simple factual statement.

Makes you wonder why nobody at Nalcor and none of the politicians could have found a microphone somewhere last week to say precisely this one sentence.

3.  However,...

At this point, they completely shag themselves up.

It's a great big "but" and, invariably what comes after the but negates anything that went before it.

4.  ... as previously stated...


5.  ... we will continue to explore opportunities with multiple potential customers,  including Hydro-Quebec, to enhance the value of energy that is surplus to Newfoundland and Labrador's needs.

There are a couple of things about this statement that leap out.

Right off the bat, we have this appalling bit of gibberish:  "enhance the value of energy."  Does that mean "sell"?  Odds are it doesn't.  If they meant something eminently simple, surely the Nalcor folks would say "sell surplus electricity" rather than jargony nonsense.

Just to give you a good example of what Nalcor has said in the past, consider a document from 2014 that is specifically about selling export electricity.  The word "enhance" appears exactly once.  The word "surplus" appears 16 times and in seven instances it is in the specific phrase "sale of electricity that is surplus."

"Enhance the value" is a suspicious phrase.  Might just be that Nalcor has hired a shitty writer.  Might be something else.

Certainly Nalcor isn't trying to tell us that HQ - already flush with its own surplus - might be thinking of buying MF electricity.

And, of course, that also would have to mean that MF produces more electricity than we need.  That is highly suspect at the moment given that Nalcor  doesn't control production at Churchill Falls and therefore can't optimise production at Muskrat Falls.

6.  Also, as long-standing business partners in the Churchill Falls plant,  Nalcor and Hydro-Quebec have ongoing conversations and negotiations regarding that plant.

'ullo, 'ullo, 'ullo.  What's all this then?

Suddenly we are talking about Churchill Falls and "conversations and negotiations" about the generating plant there.

7. Our guiding principle is always to do what is in the best interest of the people of the Province...

Okay, well that is a brand new principle because until now Nalcor has been operating with its corporate interest always ahead of the public interest.  Muskrat Falls is proof of that.

"people of the Province" with a capital "p" for province is a really tell-tale bit of GovSpeak.

8. ... and we will ensure the public is aware of any significant developments.

Yeah, sure.  The cheque's in the mail,  I'll respect you in the morning, and we will ensure the public is aware of any significant developments.

What to make of all this?


  • Muskrat Falls.
  • Not Gull Island.
  • "enhance the value of energy" surplus to provincial needs
  • "conversations and negotiations" about Churchill Falls.

Nalcor's scheme all along was to run the river in such a way that they would meet delivery to Hydro-Quebec under the 1969 contract from Muskrat Falls for part of the year.  This would allow Churchill Falls (Labrador) Corporation to use less water.

But, as we now know,  Nalcor doesn't control water flows on the river.  Hydro-Quebec does, at least until 2041.  So that gives us "energy"  in the water running down the river that right now is entirely surplus to the provincial needs. This is especially true in the spring run-off but it would also be true during those parts of any given month in which Churchill Falls is running flat-out to meet its contractual obligations to HQ.

Nalcor doesn't actually need Muskrat Falls for the foreseeable future.  There's only a short period in the winter when they would need electricity to replace Holyrood. Otherwise, they should be able to make do with only a fraction of its potential output.

And if you step back for a second and think about it, Hydro-Quebec would be a logical consumer of Muskrat Falls' output since it is basically going to run on their timetable anyway.  MF doesn't have a reservoir so it basically operates as a run-of-river generator.  That means when the water runs, it makes electricity and the folks that own the plant can't decide when the water runs.

And then Dwight said...

NTV caught up with Premier Dwight Ball somewhere.  Ball said "there are no negotiations ongoing with Quebec."  Ok.  So maybe they are happening intermittently.

Then he says something odd.  "They will be considering options at some point."  They who?  Nalcor, by the sounds of his next sentence.  The options will be about reducing power costs to people of the province.

Then Ball says there are no discussions with Hydro-Quebec "at this time related to selling off portions of Muskrat Falls."  There's that denial of something that no one is talking about, again.

Then he goes back to the task of Nalcor to mitigate cost of Muskrat Falls power to provide reliable power to consumers at the lowest possible cost.

That gives us...

Nalcor is looking at options involving Hydro-Quebec that would see Nalcor flog electricity to HQ, likely from Muskrat Falls.  They aren't locked in detailed negotiations but clearly something is up.

One possibility is that whatever cash Nalcor might get from the guaranteed sale to HQ would help to lower costs to domestic consumers.


UPDATE:  Turns out they simply responded to a question from NTV's Michael Connors.  Major public issue allowed to take off and run for days due solely to the neglect of corporate management to respond in a timely and professional manner with factual information.


That's just another confirmation of how much of a problem Nalcor and the provincial government have with really simple things.  Check back on Monday for a post on problems in the ATIPPA world.  It's all part and parcel of the same thing.