Media reports, political comments, and pundit opinions are wrong about the decision last week by the Quebec Court of Appeal in a case about the renewal clause of the 1969 Power Contract between Churchill Falls (Labrador) Corporation and Hydro-Quebec.
The Court decision leaves Hydro-Quebec with virtually all of the electricity produced from Churchill Falls and, most importantly, operational control of water flows on the river. This will have an adverse impact on Muskrat Falls. As a result, CF(L)Co is likely to appeal the decision.
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The Quebec Court
of Appeal ruled last week that Hydro Quebec retained operational control of
electricity production at Churchill Falls. It made a minor change to an earlier
decision by the Quebec Superior Court in a decision from 2016.
That’s why Hydro-Quebec issued a statement that it was
satisfied with the outcome of the decision.
In other words, English-language media reports and
political commentary got it wrong when they claimed “Quebec's
top court rules for N.L. in Churchill Falls dispute with Hydro-QuĂ©bec” (Canadian
Press) or “A Victory
For NL In Long-Standing Legal Battle With Hydro-Quebec On Upper Churchill” (VOCM).
The
English-language reports focused on the idea that Hydro-Quebec could only buy
electricity from Churchill Falls up to a maximum each month under the terms of
an automatic renewal to the 1969 power contract between Hydro-Quebec and Churchill
Falls (Labrador) Corporation. VOCM went
a step further in the mistake department my making it sound like both Hydro-Quebec
and Newfoundland and Labrador Hydro could sell electricity from Churchills
Falls.
The clue
that something was amiss in the English-language coverage is the statement from
Nalcor that said the Quebec Court of Appeal “had ruled substantially in favour”
of CF(L)Co on the question of Continuous Energy.
Here’s why.