On Wednesday, Premier Paul Davis announced that Ken Marshall had been appointed chair of the board of Nalcor and an unspecified number of Nalcor’s subsidiaries.
Danny Williams’ old business buddy has been on the Nalcor board since 2004 and he’s been the acting chair of the board at Nalcor since earlier this year.
Note the date: 10 December 2014.
Now check out the order in council issued on 04 November 2014:
The provincial government is dropping $11.3 million to string fibre optic cables from Goose Bay to western Labrador.
The federal government will plunk in $3.0 million with $9.7 million from Bell Aliant.
Of the provincial total, Nalcor Energy will cover $8.3 million.
Just do the math, though. The provincial government has 47% of this project. Both the federal and provincial government shares combined cover a majority interest in the project.
If that doesn’t hit you funny, it might be striking you a bit odd that an energy company is suddenly getting involved in telecommunications. Here’s the quote the people who put the news conference together made up for the Nalcor representative:
“This is one of the many benefits that Labrador will see from the Lower Churchill Project,” said Gilbert Bennett, Nalcor’s Vice-President, Lower Churchill Project. “Nalcor is investing in this project to ensure that critical infrastructure required to build and operate the Muskrat Falls development is in place in Labrador.”
“This is one of the many benefits that Labrador will see from the Lower Churchill Project,” said Gilbert Bennett, Nalcor’s Vice-President, Lower Churchill Project. “Nalcor is investing in this project to ensure that critical infrastructure required to build and operate the Muskrat Falls development is in place in Labrador.”
Not that Nalcor is bullshitting the public or anything, but of course, they are bullshitting. Nalcor has been on a heavy marketing campaign for Muskrat Falls for several months now in all sorts of ways. If they gave money to put new public toilets in a town somewhere, the news release would credit the whole thing to Muskrat Falls.
So yeah, on the crudest level, this is just another version of Nalcor’s publicity efforts for Muskrat Falls.
On another level, this is part of a trend the provincial Conservatives have been pushing since 2003. A key part of the whole effort has been to allow Nalcor – a state-owned, politically directed agency – to use public money to assume an increasingly larger role in the provincial economy.
Weird as it might sound for a Conservative government, that’s part of what is going on here. You can understand it better if you look at what the party does as opposed to importing labels or ideologies from other places. Progressive Conservative is just a label. In practice, the political parties in Newfoundland and Labrador aren’t ideologically based at all. That’s why people can jokingly refer to the Danny Williams Tories as the first NDP government the province ever had and not really be making a silly joke at all.
This sort of project is why the province’s ruling Conservatives inserted clauses in the energy corporation legislation in 2007 that allowed an energy company to do anything the cabinet wants it to do. It was a pretty dramatic change from the old law that governed the provincial hydro corporation.
In fact, this clause was so far away from one one would expect for an energy corporation that most people likely blew it off as being just a meaningless oddity. The whole thing stands out, though, because the clause survived through some pretty significant revisions from the first version of the energy corporation laws in 2006 to the ones that currently govern the corporation dating from 2007.
Cabinet obviously meant for the new corporation to take on anything at all. They didn’t need a way of funnelling provincial government money to the private sector. They already have dozens of ways to do that. They also didn’t need to do this for Muskrat Falls. They’ve been running Churchill Falls, for example, since the 1970s with good old copper telephone lines.
Muskrat Falls wouldn’t be the only new industrial venture that could use fibre optic communications. There are some new mining businesses likely to start in Labrador soon that could claim a far bigger interest in these cables than Nalcor.
And for what it’s worth, Muskrat Falls might not even happen.
What’s going on here is a continuation of the policy laid down by the Conservatives early in their mandate. They want to assume greater and greater control over the provincial economy. Today,it’s fibre optic cables. Tomorrow, it might well be another administration of any partisan stripe getting Nalcor into fish processing or marketing.
As your humble e-scribbler put it in 2006:
Williams' new Hydro corporation returns to an older model based on government subsidy and government dependence. Beyond the attractiveness to some businesses of relying on whatever contracts they can secure from the new Hydro corporation, the political and financial muscle of the state-owned company will likely make it considerably more attractive an investment than a private sector venture, since it will always carry with it a government guarantee of its operations and expenditures. The end result will almost inevitably be a weakening of the local private sector.
Weakening the private sector is one result.
Another is ensuring that local taxpayers pay the full financial cost and then some. Under the Electrical Power Control Act and the public utilities board legislation, the utilities board must set provincial electricity rates to ensure the financial viability of the provincial energy corporation. The company can never lose.
It’s that same combination of powers, incidentally, that Nalcor is using to finance the Muskrat Falls project. Local taxpayers will be forced – by law – to pay whatever rates Nalcor needs to ensure it recovers its costs, makes a profit and maintains its credit rating.
It was an undisclosed risk in 2006, but then again, that’s what the Lower Churchill is all about. It’s what a 2009 Emera deal was all about. Heck, it’s what the provincial Conservatives have been all about since 2003.
No wonder they dropped it out there a couple of days before Christmas.
- srbp -
1. A foundation of purest sandstone: For those who are still following these things, the Telegram’s Rob Antle has a tidy little summary of the case which is the bedrock on which the provincial government’s legal challenge of the 1969 Churchill Falls power contract rests.
Self-Check: How many paragraphs down did you get before you realised that – in and of itself - the case has absolutely nothing whatsoever to do with the 1969 ruckus?
2. More money for Quebec, yet more billable hours edition: The papers in la pas-si-belle-pour-Danny province have been filled with stories about the hearings over transmission and the promise to sue over good faith or lack thereof.
3. Rien could possibly be further from the verite. In a scrum the other day, Hisself could recall the pages on which appeared stories in La Presse about the whole Labrador hydro thing from one angle or another. Helene Baril’s summary of the issue in her January 12 story is tidy and accurate. Ditto one on the 19th of January.
Not so another one on the 19th in which she writes:
Quatre ans plus tard, le premier ministre Danny Williams est toujours aussi déterminé à développer le Bas-Churchill sans l'aide de personne, et surtout sans celle d'Hydro-Québec.
Still prepared to develop the Lower Churchill without Hydro-Quebec?
Hardly.
Malheureusement en anglais seulement,
Perhaps it’s time someone worked up:
a. a French translation of the Dunderdale comments and,
b. a French version of “Nothing could be further from the truth”. ‘Pfft” - another DW staple likely to be heard many times in the next few months - already translates itself.
-srbp-
… doesn't see the Quebec issue as a major stumbling block, as regulation requires the province to allow access to its grid in return for a set tariff. Hydro Quebec and Nalcor are just working out the details.
01 Sep: Emergency session of the legislature called for September 8 to deal with amendments to 2008 water rights legislation.
Any costs to Ontario would build in the price of that tariff, but what's most important is how that final cost would compare to the next-best alternative. [Emphasis added]
"This amendment is necessary in order to facilitate an agreement between Nalcor Energy or its subsidiary and CF(L)Co," said Minister Dunderdale. "As these negotiations are currently underway, we wanted to get into the House early and make this amendment to avoid any uncertainty to the parties involved. We thank the opposition for their cooperation on this matter and we look forward to further discussion on the amendment when the House reconvenes next week."03 Sep: In a speech to a national audience, Premier attacks Hydro Quebec for supposedly throwing up roadblocks to lower Churchill development.
“They [Churchill Falls (Labrador) Corporation lawyers and directors] felt that we had extinguished their rights to the whole watershed area that they require to produce electricity in the Upper Churchill and that would cause them some concern,” said [natural resources minister Kathy] Dunderdale.Unspecified time in September: Deal reached with CF(L)Co on water management.
“It's giving away their future.”
__________________________________________________________________
At the heart of a little flame war last week on one local blog came a rather surprising nugget of hard news that Newfoundlanders and Labradorians likely have never seen and may well never see covered at all – let alone in depth - by local media.
Telegram blog writer Geoff Meeker noted a comment by Premier Danny Williams in the House of Assembly on April 30, 2008. In answering an opposition question about putting $100 million into debt reduction for Newfoundland and Labrador Hydro, the Premier said:
It was a previous Liberal government that wanted to actually privatize Hydro. This particular government wants to strengthen Hydro, wants to make it a very valuable corporation: a corporation that will ultimately pay significant dividends back to the people of this Province; a corporation that perhaps some day may have enough value in its assets overall as a result of the Hebron deal and the White Rose deal, possible Hibernia deal, possible deals on gas, possible deals on oil refineries and other exploration projects, where hopefully we might be able to sell it some day and pay off all the debt of this Province, and that would be a good thing. [Emphasis added]
That’s right.
Danny Williams spoke publicly about selling off some or all of the province’s energy corporation to pay down public debt.
CBC’s provincial affairs reporter David Cochrane added to the discussion online and offered some additional insight into the Premier’s thinking:
We pulled him outside for a scrum to ask about it. Even before we asked a question he clarified his comments. He said he misspoke in the legislature. He wasn't talking about selling Nalcor. He was talking about selling the individual assets it acquires.
For example, if the Hebron stake is eventually worth 5-billion [sic] dollars and someone wants to buy, Williams said he would consider selling it to reduce debt.
That was consistent with past comments he had made when the government rolled out its plan to revamp Hydro into an energy company.
As established in the first part of this series – Control and Resources - that isn’t what Williams had been saying consistently at all.
To the contrary, selling any asset of the energy corporation would run directly counter to the stated goal of acquiring control over the province’s resources and hence its development and future. Being masters of our own destiny is tied directly to resource ownership.
But Cochrane was right: Williams had talked about selling some or all of the energy corporation before. As Cochrane showed, Williams had mentioned the idea in October 2005 in a story Cochrane had done on Ed Martin’s arrival as chief executive officer of the fledgling corporation that would be eventually known as NALCOR Energy:
Williams says his top priority is for the company to become an investor in every form of energy development – or, as he calls it, to get a piece of the action.
"I would like to see Newfoundland and Labrador Hydro gain a strong asset base, so in fact then the government of Newfoundland, as a shareholder, also benefits from that asset base," he said.
…
"If energy continues to grow in value as it is now, perhaps what we could now buy for a billion dollars could be worth $10- or $20 billion in 10 or 20 years' time, which means that those assets have a value whereby we could pay off our debt," Williams said. [Emphasis added]
The 2005 comment is not as clear as the 2008 version in the legislature but they are along the same lines.
And certainly in 2005, Williams wasn’t splitting hairs over regulated (electricity) versus non-regulated (oil and gas) assets as Williams apparently did in the unreported portion of the media scrum in April 2008. As Cochrane described it:
Williams did not say he would sell off all the assets (i.e power generation and transmission capacity). He was talking energy assets in the oil and gas sector.
Now while it doesn’t appear that Williams has said this “many, many times” as Cochrane asserted elsewhere in that comment, there is no question Williams has spoken of selling off some or all of the energy corporation in order to pay down public debt, if the price was right.
Nor is it the only reference to selling energy assets, even though the idea is not contained in the energy plan or the campaign manual. In a clause of the New Dawn agreement, released in September 2008, one provision covers the potential sale of the Newfoundland and Labrador interest in the Churchill Falls (Labrador) Corporation:
On the one hand, the Williams administration has a clear policy connecting the principle of control of energy resources with ownership of equity stakes in energy projects.
Yet at the same time, the Premier has spoken publicly about the potential that these assets could be sold to reduce public debt.
And on top of that, an agreement with the Innu Nation includes a specific provision covering the potential sale of the Newfoundland and Labrador majority shares in the company that operates the Churchill Falls power complex.
Clearly the two notions cannot live in the same space.
Well, they can actually if one considers another statement by Danny Williams which describes another aspect of his political philosophy:
What I said before and I said going in, this is about principles, but it's also about money as well. At the end of the day, the promise and the principle converts to cash for the bottom line for the people of Newfoundland and Labrador.
That’s a comment Danny Williams tossed out in November 2007 during the racket about broken political promises with Stephen Harper.
Williams used the word “principles” in the familiar sense. A “principle” is a fundamental rule. A “principle” may also be expressed as a value like openness, honesty, or integrity.
The dispute was a matter of principle, in that sense; a promise made is a commitment to act that must be fulfilled. If someone breaks his or her word without good cause or explanation, the relationships between people can no longer function.
The notion is hardly surprising for a lawyer who spent a lot of time arguing for damages for his clients, even if there are few others who would – on the face of it – accept that principles of any kind can be transformed to coin.
Yet Danny Williams obviously operates on the belief that he has a political Philosopher’s Stone in his pocket. Like its legendary alchemical predecessor that converted base metal to gold, this stone would convert electricity and oil into dollars.
The curious thing is that none of this has been reported clearly and consistently within the province. It is doubtful that a majority of Newfoundlanders and Labradorians know anything but the old and familiar notion that links control of resources with the future.
Yet there is no mistaking that the Williams administration has another policy firmly in place - at exactly the same time - which would allow for the sale of resources in a fashion that directly contradicts the notion of control on which the administration claims popular support for its policies.
Little wonder in April 2008 then that Danny Williams responded so strongly when reporters asked him to scrum on his statements. Again, as the CBC’s David Cochrane described it:
We pulled him outside for a scrum to ask about it. Even before we asked a question he clarified his comments. He said he misspoke in the legislature. He wasn't talking about selling Nalcor. He was talking about selling the individual assets it acquires. [Emphasis added]
In the end, the reporters in the scrum opted to report nothing of the comments at all, including the Premier’s “clarification.”
Regardless of what the reporters decided on that busy work day, the Premier’s comments and the unsustainable internal contradiction in them are obvious in both the Premier’s criticism in the legislature of Hydro privatisation on the one hand and then the expressed interest in flipping assets to pay off debt on the other. It doesn’t matter how often the Premier said it.
The comments take on new importance though given the Premier’s recent attack on the sale of NB Power to Hydro Quebec.
And at the same time, as the province faces tight provincial finances, the question of exactly what is government policy on energy, control and sale of resources to meet financial needs deserves to be answered clearly and unequivocally.
Such a question can only be answered, however, if someone deigns to ask it.
-srbp-
Newfoundland and Labrador Premier Danny Williams is tearing strips, not off New Brunswick Premier Shawn Graham or Hydro-Quebec but his own deal with Hydro-Quebec from last April.
Williams attacked the deal in a letter to Graham:
Despite our expectation of regulatory fairness [ in wheeling electricity across Quebec], Nalcor Energy has encountered obstacles in Quebec. Nalcor has been forced to lodge four complaints with the regulatory authority in Quebec about the tactics being used by Hydro Quebec Transenergie that serve to delay and inhibit our progress.
Under an agreement announced in April 2009, the provincial government’s energy corporation sells power to unidentified customers in New York state. The power is wheeled along transmissions lines in Quebec under what is known as the open access transmission tariff. NALCO pays Hydro-Quebec $19 million a year to wheel the power. The figure was not released by NALCO or the Government of Newfoundland and Labrador.
While Williams is now slamming the deal – making it sound as if there was no wheeling agreement at all - back in April, he was positively giddy with excitement at what he termed an “historic” agreement:
“This is truly a historic and momentous occasion for the people of our province, as never before have we been granted access through the province of Quebec with our own power…”.
There is no obvious explanation for Williams sudden attack on his own project nor is there any explanation for his claims that Hydro-Quebec is blocking or trying to block NALCOR’s access to markets. The April deal proves there is no real obstacle.
What makes the latest tirade all the more bizarre is that in a scrum with reporters two days ago, Williams acknowledged that there was no obstacle to getting power to markets in the United States. In the same scrum, he said Hydro-Quebec might be trying to do just that.
His disdain for the sale of NB Power to Hydro-Quebec is apparently based on losing the race for new markets for hydroelectricity.
-srbp-
In his written reply to Shawn Graham released today, Newfoundland and Labrador Premier Danny Williams reveals that his government energy corporation was in discussions to sell power to New Brunswick from the still largely conceptual Lower Churchill project.
But Hydro Quebec – with as much power as the Lower Churchill may one day offer already under construction - evidently beat Williams to the punch.
The real source of Williams’ frustration at news of a deal to sell NB Power to Hydro Quebec is buried after six lengthy paragraphs of irrelevant frothing:
One of the potential impacts of Hydro Quebec’s dominance may be the premature cessation of current, good faith discussions between Nalcor Energy and NB Power to sell competitively priced Lower Churchill power to New Brunswick and jointly advance the long term, mutual interests of both of our provinces in conjunction with Nova Scotia and P.E.I. These discussions have not yet reached an advanced stage, so it is not possible to quantify the benefits that might be lost to our two provinces and all of Atlantic Canada if discussions are terminated. If New Brunswick narrows down its range of alternatives to a single-window with Hydro Quebec, full information may not be available to evaluate the opportunities that other alternatives may bring. I would reiterate that our province feels compelled to look into the potential of anti-competitive behaviour on the part of Hydro Quebec given the potential monopoly that could exist as the result of an agreement between them and NB Power. [Emphasis added]
The revelation that Williams had been beaten to the market by Hydro Quebec is almost as astonishing as word last month from Williams energy minister that he had been working for five years, making secret offers for Hydro-Quebec to take an ownership stake in the Lower Churchill project.
Williams criticises the Churchill Falls deal in the Graham letter but, according natural resources minister Kathy Dunderdale, Williams was willing to set the issue to one side in exchange for Hydro-Quebec buying a piece of the Lower Churchill.
In 2006, Williams rejected a proposal from Ontario Hydro and Hydro-Quebec to jointly develop the Lower Churchill. Williams said the province would go-it-alone. He made no reference at the time to efforts to lure Hydro-Quebec into another deal, as Dunderdale revealed.
Hydro-Quebec already had significant hydro projects in the works and added about 4,000 megawatts of wind energy to its mix of new project.
The Lower Churchill proposal currently undergoing environmental review consists of transmission through Quebec and a line to bring power from the project to eastern Newfoundland. There is no proposal in public to run the power to New Brunswick.
The Lower Churchill project - estimated to cost between $6.0 and $9.0 billion – has no confirmed markets. An opening to Rhode Island apparently fell apart because power could not be delivered at a marketable price. That isn’t what the energy minister told the public.
-srbp-
New Brunswick Premier Shawn Graham sent Newfoundland and Labrador premier Danny Williams a polite letter on Wednesday telling him to keep his nose out of the NB Power talks and stick to running his own province.
Graham also repeats the point that others have made, namely that any suggestion that the grid through new Brunswick might be somehow closed or restricted as a result of any deal with Hydro-Quebec is without merit or foundation. Click that image, by the way, and you’ll get the whole letter, courtesy of cbc.ca/nb.
Stunning. Not.
Incidentally, there’s also no small irony in Williams’ comments warning about New Brunswick selling off its natural resources to Hydro-Quebec.
In September natural resources minister Kathy Dunderdale revealed some details about Danny Williams’ previously secret offers to Hydro-Quebec to take an ownership stake in the Lower Churchill.
labradore offers chunks of the transcript of Dunderdale’s interview. So much for “despicable.”
Those Dunderdale comments were all the more stunning in light of Williams’ previous position about demanding redress for the Churchill Falls contract before there would be any deal on the Lower Churchill. According Dunderdale, Williams was willing to set the whole issue of the odious 1969 contract to one side in the interest of giving Quebec a fair return on its investment in the new project.
-srbp-
When the political going gets tough, what better way to handle it than to launch a phoney jihad against a completely imaginary enemy over a completely imaginary dispute:
The Premier is gearing up for another fight on the national stage. Danny Williams says Hydro Quebec continues to try and block this province from developing the Lower Churchill, now refusing to sign onto a water management agreement for the Churchill River in Labrador.
For starters, Danny Williams is only pissed at Hydro-Quebec because they aren’t willing to take the ownership of the Lower Churchill he offered then. It’s not that they are so interested in the LC and Danny that they are blocking him, it’s really bothering him that Hydro-Quebec just isn’t interested at all.
And that’s after five years of desperately trying:
[Natural resources minister Kathy] Dunderdale told VOCM Open Line show host Randy Simms on Friday morning that over the past five years, the Williams administration “got a path beaten to their [Hydro Quebec’s] door” in an attempt to have HQ become what Dunderdale described as an “equity partner” in the Lower Churchill.
Dunderdale described the Lower Churchill “piece” as a “win-win” for Hydro Quebec. She said that despite efforts by the Government of Newfoundland and Labrador there was “no take up [from Hydro Quebec] on the proposal.”
But the biggest thing you have to consider on this water rights agreement thingy is that if the two parties – NALCO and Churchill Falls-Labrador Company – can’t reach and agreement on their own, the whole thing will be settled legally and finally by the public utilities board.
No big public, hair-mussing fuss required.
Danny Williams knows this because that’s what he amended the law to say in preparation for just such an event.
Well, okay first the provincial government tried to screw with the contract – as someone else tried in the 1980 water rights case - but they got caught red-handed in that little bit of tomfoolery.
While Williams and his ministers tried to downplay it at the time, they were caught so far in the wrong they even had to call an extremely rare emergency session of the legislature to deal with the mess created by someone’s childish legalistic game.
Anyway, that’s another story.
CFLCO not interested in the deal on water rights Williams wants?
Well that’s no problemo.
The whole thing just falls along according to amendments made to the Electrical Power Control Act in 2007 by none other than Danny Williams’ own administration.
The public utilities board – headed by Williams’ new buddy Andy Wells – just imposes a deal on the two sides:
5.5 (1) Where 2 or more persons to whom subsection 5.4(1) applies fail to enter into an agreement within a reasonable time, one or more of them may apply to the public utilities board to establish the terms of an agreement between them.
(2) Where an application is made to the public utilities board under subsection (1), the board shall establish the terms of an agreement for the purpose of achieving the policy objective set out in subparagraph 3(b)(i).
(3) An agreement established by the public utilities board under subsection (2) is binding on the persons named in the agreement.
Poof.
Job done.
Pas de sweat.
And lookit, the company involved here isn’t Hydro-Quebec, it’s the Churchill Falls-Labrador Corporation. That’s the company in which the provincial government’s energy company – NALCOR - owns a 65% stake.
And if you are still not convinced this is all yet another case of Tory dog-wagging, just consider that this evil foreign demonio Hydro-Quebec hates Williams so much and is working so hard to block the Lower Churchill they were will to sign a deal allowing energy from Labrador wheel across their province.
Wheel power and they make millions off the wheeling charges. Gee, that’s really putting obstacles in the way of the Lower Churchill. Yep, what better way to block the Glorious Lower Churchill project than demonstrating that Danny Williams can wheel power through Quebec to some other market than Quebec without any obstacles.
So what is all Danny Williams’ puffed chest really about?
Not even Ed Martin - the head of the provincial government’s energy company - seems to know.
But if one Ed doesn’t, maybe your humble e-scribbler can offer some easy suggestions on what issues are causing the provincial Conservatives to go hunting for a distraction:
- The by-election in the Straits is really not going well at all for the Tories. Then there’s Terra Nova to fight where the Tories haven’t even got a candidate yet and the Liberals wound up having two to pick from. Eight cabinet ministers in one day and four trips by the premier Hisself don’t seem to be working on the voters, at least not the way it is supposed to work.
Very frustrating when the old tricks don’t work any more.
- It’s really, really, really painful to make one decision and then be forced to make another. Think Danny Williams and the whole lab and x-ray thing. Jerome Kennedy confessed just this past week to what some of us have known all along: the decision to chop service was made by the entire cabinet.
That’s why they all stuck so hard to the line about “improvements.
That’s why they resisted changing their minds right up until the point they had no choice.
That’s why they tried desperately for weeks to try and blame someone else for the shag up rather than the people who actually shagged up.
It really bruises the ego to lose.
- And that’s on top of a string of “losses” including the Gros Morne one. Again, as much as they tried to downplay it, the whole emergency session of the legislature must have deeply embarrassed cabinet.
- There’s also the ongoing embarrassment of Paul Oram coupled with his decision to up and run when the going got tough. A cabinet minister resigns hot on the heels of another, thereby creating a mini-crisis in the government? Not a way to make the leader feel cheery. Paul Oram took himself off a raft of Tory Christmas card lists with his poorly executed exit.
- Unflattering comparisons to Roger Grimes? Lighten up a bit, people. It’s a joke.
- Let’s not forget the admission that the provincial Conservatives haven’t been doing such a fine old job of managing the public purse as they’d claimed. The word Oram used was “unsustainable.” Finance minister Tom Marshall said much the same thing.
- Then there’s the revelation that the government’s satisfaction rate ain’t what it was purported to be by the government’s own pollster. Between the opposition and local media, three recent CRA polls – never released publicly before – show that the people of Newfoundland and Labrador told CRA one thing but CRA told the public something else. The truth is sometimes painful but it does come out.
- Then there is the ongoing frustration of the Lower Churchill. As a story in the Telegram noted [not available online], NALCO has to go back and answer a whole bunch of questions for the environmental review on the Lower Churchill and that is now behind schedule. That’s on top of the lack of partners (see above), lack of markets - think Rhode Island - and the huge embarrassment to the government of being forced to abandon their original plan of slinging power lines through a UNESCO World Heritage Site.
On the whole it has been a very rough patch for the ruling Conservatives, at least from their perspective over the last six weeks and a bit more.
And what better place for provincial Conservatives to engage in some traditional Tory dog-wagging than the annual convention in Gander.
After all, that’s where ABC was born, at a time – as the House spending scandal broke in 2006, among other things – when things didn’t look all that rosy for provincial Tories in the short term.
Come to think of it, Loyola Sullivan packed it in not long after that, as did Paul Shelley and a few others.
-srbp-
A deal is close according to the Globe and Mail that would see Hydro-Quebec buy all of NB Power for $10 billion.
But the Globe story contains some of its characteristic shit reporting in the sub-head: “blocking access of other provinces' utilities to U.S. markets”.
There’s more the same drivel farther down the story but don’t buy most of it because it just isn’t true.
This sale can’t block access for anyone to NB’s power grid. It can’t, not if NB Power and HQ want to keep selling power into the US.
And from the looks of it at least one statement could be completely false: “Newfoundland and Labrador Hydro has complained to regulators in Quebec and the United States that Hydro-Québec's transmission arm is not providing it fair access to U.S. markets.”
You see Danny Williams has bitched alright, but he was bitching because he couldn’t get HQ to buy into the Lower Churchill.
But…
According to Ed Martin, Williams right-hand on any of a number of issues, there is no problem whatsoever with Hydro-Quebec. Thus it would be very odd if the company Martin runs was doing things – as the Globe reports - like filing formal complaints alleging some pretty serious unfair market practices against HQ.
All they have actually done is pursue a tariff through Quebec which they duly got. Your see – Shawn and Rheal take note – NL Hydro has already been wheeling power into the United States across lines in Quebec in a deal touted by none other than …wait for it…Danny Williams Hisself.
Notice there is no further detail on that in the Globe story. That’s a pretty good clue that Rheal Seguin and and Shawn McCarthy just didn’t do their homework. Instead, they seem to have opted for a half-backed paraphrase of an equally a half-baked version of the old Danny story and not rely on what Danny’s energy minister said.
In the process, the bitching morphed into a complaint filed with a Canadian or American utility regulator. Look farther on in the story and that’s exactly what they do, and as you can see they got the bitching story and the bit about the alternate transmission line wrong too. That’s what you get for quoting Liz’s thumbs and not doing any real research.
There’s also another completely asinine comment about HQ getting greater access to the US as a result. If the guys at the Globe even bothered to check their facts, they’d know that HQ already owns capacity on the grid through New Brunswick. The story has been out there since the spring. That’s definitely not the motivation for this deal.
The upside to this story is that New Brunswickers will shed a 90-year-old chronic debt pig and retire in the process what the Globe describes as 40% of public debt in one fell swoop.
Let’s just hope that while about half the story appears to be complete fiction, the bit about New Brunswickers shedding their debt burden turns out to be true.
-srbp-
The Newfoundland and Labrador government is making quick changes to a 2008 law after lawyers for the Churchill Falls (Labrador) Corporation - CF(L)Co – raised questions about the impact of the bill on the company’s 1961 lease and rights to all property related to Churchill Falls.
Lawyers for CF(L)Co raised the issue with the provincial government’s NALCOR Energy company during talks on water management for the proposed Lower Churchill project.
The changes were tabled Tuesday in an emergency sitting of the House of Assembly.
It appears that - reminiscent of the 1980 water rights reversion bill - the 2008 bill stripped CF(L)Co of its lease.
In the original 2008 bill - Energy Corporation of Newfoundland and Labrador Water Rights Act - the Lower Churchill River is described as including “all waters that originate within the Churchill River catchment area and all rivers that naturally flow within the catchment area or from diversions into the catchment area.”
Clause three of the then stated that
any property in and rights to the use and flow of water, previously conferred by a grant, lease, licence or other instrument or under a statute of the province, or vested in, acquired by or accruing to a person by whatever means relating to the Lower Churchill River are extinguished. [Emphasis added]
By combining the two clauses, the new bill effectively cancelled the 1961 Churchill Falls lease. The 2008 law also blocked rights holders from any legal action and stripped them of any entitlement to compensation.
The bill became law on June 4, 2008. There is no indication when cabinet issued the license to the energy corporation, now known as NALCOR Energy.
The changes introduced in Tuesday’s emergency session make it plain that the 2008 water rights law applies only to the Lower Churchill and that, for absolute certainty, the 2008 bill “ excludes the area described in Appendix A to The Churchill Falls (Labrador) Corporation Limited (Lease) Act, 1961, and all waters while they are in that area.”
For its part, the Williams administration is downplaying the session and the hasty changes. In a news release, Dunderdale said that the act was never intended to cover Churchill Falls.
But the very fact the session was called to deal with one set of amendments to one bill suggests the issues involved are far from routine and that the legal implications of the water rights bill would be significant if left unamended.
Emergency or special sessions occur very rarely and usually only deal with extraordinary issues like war or labour disputes that threaten public health and safety.
Ordinarily – and if the implications of the bill were considered inconsequential or inadvertent - CF(L)Co and NALCOR could simply have made routine amendments in the regular fall sitting a condition of an overall deal on water rights management on the Churchill River.
Interestingly, the provincial government also tried to downplay the water rights bill in 2008, even to the point of making apparently misleading statements in the legislature.
In June 2008, natural resources minister Kathy Dunderdale told the House of Assembly that the bill was needed since government had decided against using the Lower Churchill Development Corporation as the vehicle to develop the Gull Island and Muskrat Falls power projects.
But the 2008 water rights bill didn’t repeal the 1978 Lower Churchill Development Act, nor did it remove the LCDC option for development of the Lower Churchill. The 2008 bill merely extinguished previously existing rights, leases, grants and licenses.
This marks the second time since 1975 that a Progressive Conservative administration in Newfoundland and Labrador has found itself in hot water over legislation related to Churchill Falls.
In 1980 Brian Peckford’s administration introduced the Upper Churchill Water Rights Reversion Act. The bill expressly cancelled the 1961 lease. A subsequent legal challenge by creditors led to a landmark decision by the Supreme Court of Canada that ruled the 1980 statute was illegal.
One of the influential factors in that case was public comments by politicians that identified the real purpose of the bill as being to undo the 1969 Churchill Falls agreement.
If the 2008 water rights bill effectively expropriated the Churchill Falls complex, it would be the second such move by the Williams administration in 2008. In December 2008, the Williams administration moved to seize assets of Abitibi, Enel and Fortis including hydro-electric generating facilities.
Revelation of the 2008 water rights ploy is the fourth Lower Churchill-related blockbuster news in a week.
On Friday, natural resources minister Kathy Dunderdale revealed that the provincial government had been trying unsuccessfully for five years to interest Hydro Quebec in an ownership stake in the Lower Churchill project.
Dunderdale told Open Line Show host Randy Simms and his audience that the provincial government proposed to “set the Upper Churchill [issue] to one side.”
This move came despite commitments by Premier Danny Williams that there would be no Quebec involvement in the Lower Churchill without redress for the appalling 1969 deal that sees Hydro Quebec buy electricity at better than 1/30th the cost for which it is sold to consumers. Williams has repeatedly railed against the 1969 deal as an example of a resource give-away by previous provincial governments.
The offer of an ownership stake to Hydro Quebec also flies in the face of Williams’ 2006 commitment to develop the Lower Churchill without any outside help:
"It's an opportunity for us to get back some of what we've lost on the Upper Churchill, and the fact that we're going to do this alone is significant," Williams said in an interview.
The Dunderdale revelation came after Williams accused Hydro Quebec of doing everything possible to block the Lower Churchill project.
Williams also said last week that his government would no longer plan to string hydro lines from the Lower Churchill through a UNESCO World Heritage site.
-srbp-
Far from going it alone on the Lower Churchill or seriously pursuing a transmission route around Quebec, the Williams administration has been working fervently to get Hydro Quebec on board as a co-owner of the Labrador project.
Those efforts have been in vain, according to natural resources minister Kathy Dunderdale.
Dunderdale told VOCM Open Line show host Randy Simms on Friday morning that over the past five years, the Williams administration “got a path beaten to their [Hydro Quebec’s] door” in an attempt to have HQ become what Dunderdale described as an “equity partner” in the Lower Churchill.
Dunderdale described the Lower Churchill “piece” as a “win-win” for Hydro Quebec. She said that despite efforts by the Government of Newfoundland and Labrador there was “no take up [from Hydro Quebec] on the proposal.”
The new version of events offered by Dunderdale is at odds with media reports this week of Premier Danny Williams’ speech to the Canadian Energy Forum meeting in St. John’s last Wednesday. Williams reportedly accused Hydro Quebec of protecting its own interests and of blocking efforts to develop the Lower Churchill.
However, Dunderdale’s comments fit with a more careful reading of Williams’ remarks at the energy forum.
On Wednesday, Williams accused Hydro Quebec of blocking the Lower Churchill project by not being interested in it at all. Instead, the Quebec Crown corporation was pursuing other projects – like La Romaine – which Williams said was inferior to the Lower Churchill: Williams is quoted by the Telegram in a Friday story [not online] as saying “La Romaine is not as good a project as the Lower Churchill.”
Hydro Quebec is pursuing several projects within Quebec, including alternative sources of energy to hydro, all of which are aimed at boosting Hydro Quebec’s portfolio of capacity by more than 4500 megawatts.
That was known at the time Williams made the decision in 2006 to “go it alone” on the Lower Churchill. He also Williams attacked the other projects in 2006. At that time, he claimed that those projects would get to market before the Lower Churchill and hence would beat out his pet project. In 2006, Williams vowed to continue in spite of competition.
Friday marked the first time, however, that there was public acknowledgement the provincial government was actually trying to lure Hydro Quebec into an ownership position.
This week also marked the first time Williams linked a possible Hydro Quebec financial stake in the Lower Churchill to the 1969 Churchill falls contract. Williams told the forum that as a result of Hydro Quebec’s exorbitant profits from Churchill Falls, “the very least I would expect Hydro-Quebec to co-operate with us to the fullest on getting the Lower Churchill through.”
Previously, Williams has consistently tied any negotiations with Hydro Quebec over the Lower Churchill with “redress” for the 1969 contract. That’s inconsistent with offering Hydro Quebec an ownership stake in the new project.
Williams also said that Hydro Quebec had filed procedural applications in an effort to stall a hearing by the Quebec energy regulator - Regie de l’energie – into an objection filed by NALCOR/Newfoundland and Labrador Hydro over a regulatory issue.
That’s a bizarre way to describe things, though. Newfoundland and Labrador Hydro is one of several interveners in a decision on transmission rates for 2009. NL Hydro filed its notice seeking intervener status at the last minute. But since the rate hearings affect more companies than NL Hydro and NL Hydro is one of a dozen interveners, it’s hard to see how a routine regulatory process is part of a plot to frustrate the Lower Churchill.
What’s more, Williams’ claim flies in the face of successful efforts by NL Hydro to wheel power through Quebec. Hydro started the process in 2006. In early 2009, Hydro announced successful completion of a deal with Hydro Quebec’s transmission arm to wheel power through Quebec to markets in the United States.
Efforts to cut a deal with Hydro-Quebec while claiming something else are only the latest in a series of erratic moves and claims by the provincial government since 2003.
In 2006, Williams rejected out of hand a proposal from Hydro Quebec and Ontario’s Energy Financing Company to finance the Lower Churchill. The proposal came in response to a called for expressions of interest issued by the Williams administration. Under the proposal, Ontario and Quebec would buy the power and cover the costs of upgrading transmission facilities within the provinces and across the provincial boundaries. The proposal also included flexible options on financing the construction of the two generating dams at Gull Island and Muskrat Falls.
Williams tossed that proposal and several others aside in favour of what he characterised at the time as going it alone.
In 2006, Williams said publicly that investors should look to the Lower Churchill instead of projects Quebec because Quebec is politically unstable. Williams later apologised because people found the comment offensive but he did not retract his comments about Quebec’s political climate.
Williams has also sought financial support from others despite the “go-it-alone” claim. In successive federal elections, Williams has raised the idea of federal loan guarantees with federal party leaders. He has also tied federal financial support for the Lower Churchill as some apparent form of compensation for having to run transmission lines around Gros Morne national park.
The erratic public positions don’t stop there.
In 2008, natural resources minister Kathy Dunderdale indicated the provincial government was considering a law suit against the federal government over the 1969 contract. Later in the day, the provincial government backtracked.
In early 2009, an official with NL Hydro hinted that the provincial government was considering financing options other than the “go-it-alone” version. Little did the people of Newfoundland and Labrador know what the other options were.
-srbp-
Even in the Land Through the Looking Glass that is Newfoundland and Labrador these days, a news release about an emergency session of the House of Assembly to deal with an amendment to a single piece of legislation is very odd, indeed.
As the official version puts it:
In the course of negotiating a water management agreement for the Churchill River, CF(L)Co advised Nalcor that it felt aspects of the Energy Corporation of Newfoundland and Labrador Water Rights Act infringed upon its water rights lease for the Churchill Falls development. This was not the intent of the act, and government has agreed to amend it so as to avoid any ambiguity.
First of all, one must realise, of course, that NALCOR is the parent of Churchill Falls (Labrador) Corporation or CFLCo. It holds 65% of the shares, in fact, and the two companies are not completely separate entities. They are rather closely and intimately connected, in fact.
Second of all, one must also note that the section of the Electrical Power Control Act 1994 requiring a water management agreement came into effect this past January.
In 2007, the current administration introduced this amendment in the legislature requiring two companies trying to generate hydro from the same river to come to some agreement on water sharing have one imposed by the public utilities board. For whatever reason the current administration did not give it force of law until early 2009.
Third of all, the original lease that CF(L)Co holds has been around since 1961. its provisions are well known to a host people inside and outside the provincial government. in fact, given the history of the lease, it’s probably one of the most well studied and well-understood pieces of legal documentation existing anywhere in Canada.
And that’s the really odd thing.
Well, aside from the oddity of the company effectively negotiating with Itself, and then notifying Itself in the course of negotiations that Itself had a problem with something Itself had been party to previously because that infringed on something else Itself had also been party to much earlier.
You see, there is nothing that would have been noticed during the negotiation of a water management agreement for the Churchill River since January 2009 involving NALCOR, Energy Corporation, Newfoundland and Labrador Hydro or CF(L)Co or whatever name the Crown version of Sybil is using at the moment that wasn’t painfully obvious to NALCOR, Energy Corporation Hydro or CF(L)Co or Sybil, as she then was, when the provincial government introduced the changes to the EPCA, 1994 in 2007 and then introduced the Energy Corporation of Newfoundland and Labrador Water Rights Act in early 2008.
What seems to be up for discussion here is something your humble e-scribbler pointed out back in February.
If that weren’t enough, changes to the Electrical Power Control Act – passed in 2007 but only quietly implemented after the expropriation in December 2008 – ensures that NALCO can enforce its control over future developments through the Public Utilities Board.
If one takes the implication from a set of Hydro Quebec questions about the Lower Churchill environmental assessment, the proposed water management regime appears to require that Churchill Falls be run in such a way as to maximize the generation at the Gull Island and Muskrat Falls dams under all contingencies.
This might adversely affect CF(L)Co and some of its contractual arrangements to supply power. It would also seem to go against several sections of the original lease.
If the government news release is clear – and that is by no means obvious – then the emergency session of the legislature is likely to be about passing an amendment that removes the last clause of the water rights act. That’s the one that requires a water management agreement be reached or that one be imposed by the public utilities board.
What’s so interesting – if that’s the case – is that this is coming in an emergency session and not simply held for the fall sitting. An amendment to the legislation could have been made later on with the requirement to produce the amendment being made a condition of any water management agreement.
There must be some sort of threat at work here, something much more significant than the prospect of an agreement between “Nalcor Energy or its subsidiary and CF(L)Co”. Incidentally, CF(L)Co is a subsidiary of NALCOR.
Rather, there might not be much hope of a deal at all in the near term. Instead, CF(L)Co - perhaps at the insistence of one of its shareholders – is protecting its interests and ensuring that the legal problems inherent in the EPCA amendment and the water rights act be eliminated now, without question or condition.
And if it was anything else, like say a repeat of the old water rights reversion act, then the thing would have been trumpeted in news conference held by the Premier. Something says he just wouldn’t be able to resist the temptation to grandstand against any slight.
Nope. This is something government is trying to downplay, somewhat.
But rest assured: emergency sessions like this one don’t happen every day and they sure as heck don’t come for a routine amendment, even if it is one intended merely to avoid “ambiguity”.
There’s something big behind this.
And it may not be pretty for the Lower Churchill project.
-srbp-
As renewNewEngland.com reports, the Maine state legislature recently passed an initiative designed to encourage small, locally-owned green energy generation concepts. The bill was signed into law on June 26.
The new law establishes a six-year pilot program to encourage the development of community-based renewable energy in Maine, defined as a majority locally-owned facility that generates electricity from an eligible renewable resource. The pilot program has an overall program cap of 50 MW, 10 MW of which is reserved at the outset for projects that have a generating capacity under 100 kW or are located in the service territory of a consumer-owned utility. To be eligible for the program, renewable energy projects must (1) have a generating capacity of 10 MW or less, (2) secure a resolution of support from their local community (projects with a capacity of less than 100 kW are exempt from this requirement), (3) be connected to the grid, and (4) have an in-service date of September 1, 2009 or later.
This has all the hallmarks of a growing trend south of the border to focus on private sector development of small energy developments. It’s based on the belief – apparently - that small is not only less harmful to the environment but that local initiative and local capital can successfully combine to meet a portion of the nation’s energy needs. The approach is supposed to create jobs and, since it is handled by the private sector and costs are relatively small, stimulate the growth of local businesses.
Compare that to the official philosophy in Newfoundland and Labrador that is touting an energy megaproject that thus far has no customers outside the northeast Avalon peninsula. Incidentally, even your humble e-scribbler’s sister missed the point that the infeed the provincial government is trying to ram through Gros Morne is designed to bring power to townies, not Yanks.
There is no plan in public at this point to extend any power lines south of the island of Newfoundland. There likely won’t be if customers can’t be found for the juice. Anyone who has read any part of the environmental review documents for the infeed to Soldiers Pond will understand that the thing is justified entirely on a supposed power shortfall on the island within the next decade.
They plan to meet that supposed need with Lower Churchill power at a cost of $6.0 to $9.0 billion. As the 2007 energy plan puts it:
This demand is forecast to grow at a fairly steady, moderate pace over the next several years. This would result in a need for new sources of supply on the Island prior to 2015, and later in Labrador. As a result, we plan to develop the Lower Churchill project, which will include a transmission link between Labrador and the Island.
Anyone reading the environmental impact documents will also realise that the provincial government’s energy company has effectively ignored the potential for small hydro developments or other small electricity projects to meet local need. Even when an energy corporation official talks about wind power, it is obvious the corporation is fixated on the export market. And when they think exports, big is all they seem to see.
There’s been a moratorium on small hydro projects in the province since the late 1990s. While the provincial government committed two years ago to make a decision on the moratorium this year, odds are the decision won’t be made on time. Even if it is made, the energy plan links the Lower Churchill and alternative sources for the island in an “either/or” proposition. If the government proceeds with the Lower Churchill, alternatives are dead issues. If the Lower Churchill dies, then small generators are the way to go.
As for private sector capital investment, you only have to consider that one of the effects of the expropriation bill last December to see the official attitude to the private sector. While everyone fixated on Abitibi, the expropriation also included seizing control of just exactly the kinds of small hydro that Maine and others are encouraging and hand them over to the provincial government’s energy corporation. Star Lake - totally unrelated to the Abitibi mill - was one of the casualties of the expropriation, as was the Exploits River partnership, a joint venture between Abitibi and locally-based Fortis.
If that doesn’t convince you, consider that in the event small hydro projects go ahead, the energy plans mandates that only the provincial government energy corporation will be involved:
If the Provincial Government lifts the moratorium, it will institute a policy that the Energy Corporation will control and coordinate the development of small hydro projects that meet economic thresholds and are viable for an isolated island system.
And it’s not like the energy corporation has been very efficient at exploring alternatives to its current obsession with megaprojects. The earliest proposals for wind energy farms on the island turned up over a decade ago. However, it took another six years for a small project to start on an isolated island and another seven years for a report to examine the issues involved in wind generation and another two years after that before the first larger demonstration project started.
If Newfoundland and Labrador followed the approach of other jurisdictions, the people of the province could reaping the big economic and environmental benefits of innovative, small energy generation.
Unfortunately, the provincial government’s energy plan is fixated on government monopoly and megaprojects. The only things big in that are costs and - of course - project delays.
The Lower Churchill was supposed to start in 2009. By the latest estimates, the earliest it could start construction is after 2011.
-srbp-
The Telegram’s front page story on Friday reports on a study released by the Montreal Economic Institute that, according to the Telegram, shows that Hydro Quebec profits hugely from the Churchill Falls power development.
Shocking!
What’s actually much more interesting is what the study was about.
Amazingly enough, it wasn’t about how much money Hydro Quebec makes of Churchill Falls.
Rather, the Montreal Economic Institute study argued that Hydro Quebec should be privatised because it is wasteful and inefficient.
The title of the report – conveniently omitted from the Telegram story - is one that would surely ignite even more gnashing of teeth in these parts than the amazing revelation about Churchill Falls:
“How would the privatization of Hydro-Quebec make Quebecers richer?”
The title on the news release is even better:
“Privatizing Hydro-Quebec would give $10 billion more a year to Quebecers”
By privatizing Hydro-Québec, Quebecers would get $10 billion more out of it per year through improved productivity, higher electricity rates and an end to costly subsidy programs for aluminum smelters, according to a Research Paper published by the Montreal Economic Institute. The new private company would be required to pay substantial annual royalties to the government, says the study, prepared by Claude Garcia, member of the board of directors of several corporations and former president of the Canadian operations of Standard Life.
Standard Life.
Hmmm.
That would be one of the companies whose hydro-electric assets in Newfoundland and Labrador were nationalised by the the legislature last December.
The paper is far more provocative than the bit excerpted by the Telegram, especially in a province where the government is already committed to create in Newfoundland and Labrador a Crown corporation that is the mirror of Hydro-Quebec.
-srbp-
In this case a transmission line for the Lower Churchill.
A couple of weeks ago, former Premier Roger Grimes took issue with a comment by noob finance minister Jerome Kennedy that the Lower Churchill transmission line would be a good project for federal infrastructure spending.
The Telegram story - not online - quoted Grimes:
"There has been no routing actually planned for a transmission line,"says Grimes. "If they have a transmission line already planned, already designed ... then why don't they tell us where it is?"He was reacting to Kennedy who the Telegram quoted as saying:
"That's something that we could start immediately, it's something thatWilliams did mention the Lower Churchill in that year-end interview.
we wouldn't have to wait for the environmental assessments because, essentially, we'd simply be building a transmission line," said Kennedy at the time.
Kennedy said Transportation Minister Trevor Taylor delivered a similar
message to federal Infrastructure Minister John Baird just days before.
Similar comments were made by [Premier Danny ] Williams in a year-end interview with The Telegram.
Williams also took issue with Kennedy’s comments in the Telly story on Grimes’ comments saying that Kennedy had spoken out of turn. There would need to be an environmental impact assessment. Williams also said that Grimes simply didn’t know enough about what was going on:
"Poor Roger is talking through his hat. He doesn't have the background,he doesn't have the information," says Williams.
"We've been working on this plan for a long, long time, we've a lot ofOf course, Grimes and Williams have been at odds over the Lower Churchill for years and of all the province’s politicians, Grimes seems to have a unique ability to get under Williams’ skin.
engineering done," says Williams.
But that’s not the only talk of transmission lines since the New Year. Emera president Chris Huskelson told the Halifax Chronicle Herald that without a line to Newfoundland, it made no sense – presumably economic sense - to try and ship power directly from Labrador into the Maritimes.
Then to cap it all, Ed Martin, president and chief executive officer of NALCO(R) and Hydro told the Chronicle Herald that shipping power across the Cabot Strait to Nova Scotia is one of the options Hydro is looking at for the Lower Churchill. Hydro and Emera signed a memorandum of understanding a year ago to explore the possibility of shipping power from the Lower Churchill to Nova Scotia. But as Martin said this weekend:"Newfoundland decides to bring energy to the island, it makes perfect sense to bring energy further to Nova Scotia. If they decide not to bring energy to the island, it won’t make sense to bring it to Nova Scotia."
"It’s looking like somewhere in the Sydney area would be an excellent landfall for us," Mr. Martin said of the proposed undersea cable.
"Not only is it distance-wise one of the closest points to Newfoundland, but it’s close to the Lingan plant, which is a significant emitter for Nova Scotia (Power) . . . but nothing is final yet."
Nothing is final yet.
Well, nothing is really clear in all of this. As labradore noted in a post on Sunday, not so very long ago, Martin and Hydro were talking about shipping electricity into New Brunswick from Cap St. George on Newfoundland’s west coast. That was certainly the option examined in 2005, as reported by both the Telegram and Stephen Maher of the Chronicle Herald. Sea Breeze Power of British Columbia was proposing an underwater line from the coast of labradore to Prince Edward Island or Nova Scotia.
This isn’t a new idea. As Bond Papers reported in 2007, the idea of underwater transmission lines for Lower Churchill power goes back to the 1970s although officials were quick to note that it wasn’t an attractive proposition:
For one thing, according to Vic Young, president of Newfoundland and Labrador Hydro, the 77-mile cable across the Cabot Strait is an extremely poor prospect. Although a study two years ago stated it was technically possible, its capital and maintenance costs would be enormous. The electricity delivered would cost about twice what it would if brought down overland.
But all this talk of transmission lines and environmental assessments gets really curious when one looks at the Lower Churchill proposal which is now in the hands of a joint federal-provincial environmental assessment panel.
The only transmission lines mentioned in that proposal are for two running from Muskrat Falls to Gull Island and then a single line back to Churchill Falls. From there, power would head into Quebec through the existing interconnection.
The project is described very straightforwardly in the agreement between the federal and provincial governments on the environmental review panel:
The Proponent proposes a project/undertaking consisting of hydroelectric generating facilities at Gull Island and Muskrat Falls, and interconnecting transmission lines to the existing Labrador grid.
…
Interconnecting transmission lines consisting of:
• A 735 kV transmission line between Gull Island and Churchill Falls; and,• Two 230 kV transmission lines between Muskrat Falls and Gull Island.
The 735 kV transmission line is to be 203 km long and the 230 kV transmission lines are to be 60 km long. Both lines will be lattice-type steel structures. The location of the transmission lines is to be north of the Churchill River; the final route is the subject of a route selection study that will be combined on double-circuit structures.
No proposal has been presented publicly for any other transmission lines related to the Lower Churchill. There’s nothing in Quebec or New Brunswick and Nova Scotia. In Both Quebec and New Brunswick, Hydro has simply filed an application for wheeling - moving power through the existing grid - but there’s no discussion of new transmission lines.
While Danny Williams might claim Roger Grimes isn’t up-to-speed on the project, existing public information suggests the Premier and his finance minister aren’t exactly coming clean on the whole thing either.
In fact, Grimes might well be closer to the truth given that if a new transmission line – say through Quebec – is being contemplated there’s been nothing done to make it possible within the next couple of months.
As Grimes noted – and the Premier concurred – a transmission line would have to go through an environmental assessment. That idea would be a wee bit more complicated politically if the line through Quebec was expressly intended to carry power from the Lower Churchill through Quebec to another market.
If there’s another line Kennedy was thinking about, like say across to eastern Newfoundland, there’s still a provincial environmental process that would at least have to be considered. The major problem there is one of cost. Figure on a project costing upwards of $2.0 billion by the time it is done.
The cost of that little make-work venture would be borne entirely by the ratepayers of eastern Newfoundland who, it should be noted, don’t really need all that extra power and certainly wouldn’t get it right away, anyway. Hydro just expropriated over a 100 megawatts of generating capacity from AbitibiBowater and there is surplus power in the grid since the Abitibi Stephenville mill closed in 2005. The Inco project at Long Harbour will suck up some of the juice but there is no great demand for power on the island in the near term.
As for timing, those lines – even if they were built over the next couple of years – would be more than a decade old before any Lower Churchill power coursed through them. The Lower Churchill project will take nine years to complete. The proposal in the environmental review called for construction to start in 2009 with first power in 2014 and the completion of the whole thing in 2018.
But even if the environmental assessment is finished this year it would be well into 2010 before anyone would start digging dirt in Labrador.
Even 2010 would be an optimistic start-time these given that Hydro doesn’t have a single customer for the Lower Churchill power and the money markets are a wee bit skittish these days what with the shortage of capital in the markets.
Heaven forbid that work might start without those contracts in place and with the work being funded out of the public treasury or whatever cash the energy corporation might have laying about. That’s what happened last time with BRINCO as some people are only now realizing. The company borrowed cash and started work in the mid-1960s. Hydro Quebec took maximum advantage of the BRINCO foolishness and with the latter in a financial bind managed to secure the sort of contract concessions it had been seeking from the start.
All the bluster at the time about running power down through Nova Scotia was just a tactic to improve the bargaining position with Hydro Quebec. Ditto the talk of running a line through Quebec with federal backing. There’s no evidence the request was ever made, even though many people insist on repeating the story. In the end, Hydro Quebec got everything it was looking for from the start and then some.
Maybe what we have here with all this talk of transmission lines is the same sort of bluster and political posturing we saw 40-odd years ago.
Certainly there is nothing in the public domain to suggest that anything Kennedy referred to is real.
Maybe Roger Grimes knows a lot more than Danny Williams will ever give him credit for. And when it comes to contracts, it’s not like the two haven’t been at odds before with Williams having to change his position when the facts were in. Anyone remember Voisey’s Bay?
-srbp-