Quebec appeals court decision on Churchill Falls contract no win for Newfoundland and Labrador #nlpoli

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.

__________________________________________________

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-Québec” (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.

The Quebec Superior Court Decision #nlpoli

-srbp-

La Romaine: on or off? #nlpoli

On Monday,  Quebec premier Philippe Couillard left the impression that the third and fourth dams on the La Romaine river were in doubt. 

Couillard told reporters as he headed to the meeting of New England Governors and Eastern Canadian Premiers that Hydro-Quebec would finish the first two dams, currently under construction, and then make a decision:

“We will evaluate them and we will see exactly what is needed. [translation of “On va les évaluer et on va voir justement quel est le besoin.”

According to La Presse, Couillard said that HQ would assess electricity needs for industrial use within Quebec as well as for export before determining whether to build the last two dams of a four dam project.

A report commissioned for the short-lived Parti Quebecois administration last year concluded that continued development of La Romaine would not be profitable,  given the large surplus of electricity currently available to Hydro-Quebec.

The entire cost of the the La Romaine development is pegged at $6.5 billion for approximately 1500 megawatts of electricity.  If HQ proceeds with the remaining dams, the current schedule will see the third on line by 2017 and the fourth producing electricity by 2020.

A statement issued by Couillard’s office on Tuesday changed the story.  The statement said that planning was already underway for the third and fourth dams.  It also repeated Couillard’s comment from Monday that the surplus generating capacity would be an asset for Hydro-Quebec in the marketplace.

-srbp-

Nalcor following wrong energy path #nlpoli

Think back to last December.

A couple of Nalcor guys bragged about the company’s strategy of importing electricity when they needed during the months when prices were low and then exporting our own electricity when electricity prices were high.

Brilliant idea.  It worked for Hydro-Quebec for most of the past 50 years.

There’s only one problem:  it won’t work any more.

Negotiating from Weakness #nlpoli

Markets in northeastern North America are already awash in cheap electricity, thanks in large part of the discovery of massive amounts of natural gas in the United States. They’ll be that way for decades to come.

Current forecasts New England’s regional electricity transmission organization hold that improvements in energy efficiency will allow New England states to expand their economy without increasing energy consumption proportionately.  That means that eight years from now, New England will be using as much electricity as it is today. 

There’s no shortage of supply, either.  As a result, current wholesale electricity prices in New England are about one tenth of what Newfoundlanders and Labradorians will pay for Muskrat Falls.

And it is with that context the people of Newfoundland and Labrador are only now learning that a team from the provincial government  has been in Quebec for the past two weeks as part of talks with the Quebec government about the 1969 Churchill Falls power contract, according to one news outlet, and development the Gull Island power plant according to another.

Nalcor’s Complaints to the Regie #nlpoli

Last week, the Quebec Superior Court dismissed a motion to hear an appeal from Newfoundland and Labrador Hydro over decisions taken by the Quebec’s energy regulator in 2010.

As NTV reported on Friday, “Newfoundland and Labrador Hydro asked for transmission access from Hydro-Québec TransÉnergie in January 2006. But Nalcor says it was met with delays, so it appealed to Quebec’s version of the Public Utilities Board, the Régie de l’énergie.”

That’s a fair, if very general,  account of the dispute.  You can see the same thing in the other media, such as the CBC’s online account.   The Telegram editorial on Monday described the dispute this way – “the Régie de l'énergie rejected all requested corridors for transmitting power through Québec” -  although that isn’t even close to what actually happened. 

Access denied: CFLCo and Hydro-Quebec version #nlpoli

Churchill Falls (Labrador) Corporation tried but failed in 2012 in an effort to see hundreds of thousands of pages of confidential Hydro-Quebec documents on the 1969 Power Contract between CFLCo and Hydro-Quebec.

A decision by the Quebec access to information commissioner in November 2012 denied CF(L)Co access to the documents under a section of the provincial access to information law that excludes requests that are so large that answering them would interfere with  the normal operations of the public body.

Curiously enough that’s exactly the same ruling the Newfoundland and Labrador access commissioner made on a 2008 case involving a request for access to e-mails in the Premier’s Office. In his decision, filed in January 2009, the provincial access commissioner determined that:

the number of e-mails encompassed by the request was over 119,000. At a rate of 500 e-mails per day, it would take about 8 [sic] months to process the request. The Commissioner found that this was an unreasonable interference with the operations of Executive Council.

 

The Hydro-Quebec Statement of Claim #nlpoli

Via labradore, the statement of claim filed on behalf of Hydro-Quebec earlier this week.

You can search it and read it in English.  Those of you using Chrome will find the translation very simple.

If the text here is too small, then click on the title - Hydro-Quebec Statement of Claim by labradore – and go straight to Scribd.

-srbp-

Hydro-Quebec to seek clarity on contract rights #nlpoli

From Hydro-Quebec:

MONTREAL, July 22, 2013 /CNW Telbec/ - Hydro-Québec is filing a motion today with the Québec Superior Court to obtain a declaratory judgment. The company is asking the Court to confirm that two recent positions taken by CF(L)Co with respect to the Churchill Falls Contract (the Contract) are ill-founded. The Québec Superior Court has exclusive jurisdiction to rule on any dispute arising out of the Contract. It should be noted that the Contract will be automatically renewed in 2016, for a 25-year period ending in 2041.

1 - Energy deliveries to which Hydro-Québec is entitled
Under the terms of the Contract which Hydro-Québec and CF(L)Co concluded in 1969, Hydro-Québec has certain essential rights, including:

• The exclusive right to purchase virtually all of the power and energy produced by Churchill Falls Generating Station until August 31, 2041;

• The right to benefit from operational flexibility.
According to the recent positions taken by CF(L)Co, Hydro-Québec would, for the entire Contract renewal period (2016 to 2041), be entitled only to fixed monthly blocks of energy. This position would deprive Hydro-Québec of the operational flexibility to determine the quantities of energy it can request from CF(L)Co. This operational flexibility enables Hydro-Québec to coordinate the operation of Churchill Falls with its entire generating fleet, and to do so both on a seasonal and a multi-year basis.

In Hydro-Québec's opinion, CF(L)Co's position is incompatible with several provisions of the Contract. Hydro-Québec wishes to have the Court confirm that it will not be obliged to limit its requests for energy deliveries to fixed monthly blocks from 2016 to 2041.

2 - Sale of quantities exceeding 300 MW by CF(L)Co
Under the Contract, until 2041, CF(L)Co has the right to recapture a 300-MW block of power and energy and sell it to a third party. However, this right has limitations: CF(L)Co may not, under any circumstances, sell quantities exceeding 300 MW to a third party, until expiry of the Contract. Yet, since June of 2012, CF(L)Co has sold quantities of more than 300 MW to Newfoundland and Labrador Hydro (NLH), a related provincial Crown corporation, causing the interruption of deliveries scheduled by Hydro-Québec under the Contract.

Hydro-Québec therefore wishes to confirm that, as long as the Contract is in effect, namely until August 31, 2041, CF(L)Co may not sell quantities of power and energy exceeding 300 MW to a third party, including NLH.

For further information:
Gary Sutherland,   Hydro-Québec,  514 289-4418,

-srbp-

sutherland.gary@hydro.qc.ca

History’s Bitch #nlpoli

A half century ago, a bunch of very smart fellows – some of the smartest fellows of any generation ever – wanted to build a massive  plant in the middle of Labrador to make electricity.

One of the problems the project faced was a combination of costs and markets.  As Philip Smith recounts in Brinco:  the story of Churchill Falls,  the very smart men were concerned right from the start that nuclear power offered an almost unbeatable alternative to hydroelectricity for generating large amounts of electricity at relatively low cost.  The markets needed power and nuclear could do it cheaper.

Nuclear power also had a huge advantage hydro couldn’t match:  you can turn the plant on and off when you wish.  With hydro, you can make power only when you have the water.  Even with a massive reservoir, the generating output of the plant will go up and down during the year depending on how much water is available.

Gil Bennett won’t re-tweet this post #nlpoli

After a few weeks’ break, Telegram editor Peter Jackson had another go Thursday at the water management controversy involving Nalcor and the 2041 Group.

Jackson wrote about it in his Hallowe’en column. After digging up some additional information, he went back at it again.

Jackson comes to the same conclusion as before, namely that the lawyers are wrong:  there’s no issue.  Jackson quotes Nalcor vice president, the engineer who is running the Lower Churchill project.  What’s interesting though is that after more research, Jackson still missed a crucial – albeit maybe subtle – detail.

Williams prepared to wrap arms around Quebec #nlpoli

There’s something just too funny for words about former Premier Danny Williams sometimes.

It’s the kind of “too funny” where you don’t know whether he gets the joke and is just having a laugh at his own expense or is so completely blind to how asinine his own words make him look.

You see it is absolutely ridiculous for Danny Williams to deride his predecessor, Roger Grimes, for supposedly wanting to “wrap his arms” around Quebec in order to develop the Lower Churchill when Williams himself spent five years doing just that.

Of course it was only after Williams’ suck-job failed that he started in with the anti-Quebec crap.

Too friggin’ funny, Danny.

So funny in fact that SRBP even made a big map to help people make some kind of sense out of Williams’ foolishness.

-srbp-

Williams sides with Quebec on energy #nlpoli #cdnpoli

Danny Williams always likes someone who stands up for his or her province.

Well, likes them as long as the someone doing the standing up standing in the way of something Danny wants. .

Anyone who wondered why Williams turned up in the Globe praising British Columbia Premier Christy Clark can now make sense of it all.