TDIH: "Quebec paper reports Lower Churchill agreement" #nlpoli #cdnpoli

Two decades ago, there was talk of a deal to develop not one, not two, but three dams in Labrador.

The story broke in a Quebec newspaper,  Le soleil,  on February 19 and the next day the Telegram did a front pager written by business editor Chris Flanagan.

"The big bonus for Newfoundland from a deal to develop the Lower Churchill is not simply cheaper electricity and a transmission line from Quebec,"  Flanagan wrote, "but an opportunity to send natural gas-generated power the other way, says a Quebec journalist with high level sources in both provinces."

"The Newfoundland government has done studies examining the potential of bringing ashore natural gas from Hibernia and other sites on the Grand Banks, using it to produce electricity and selling it on the North American grid, said Michel Vastel, a veteran political correspondent and business writer with the Quebec newspaper, Le Soleil."

Vastel told The Telegram his sources were in both provinces and that the provincial government in Newfoundland and Labrador had studies supporting development of offshore natural gas. 

"In his 'briefings,' from high-level sources, Vastel said reports have estimated Newfoundland's average rate will increase 30 per cent over the next 20 years -- an increase that won't happen if the Lower Churchill goes ahead."

The idea had its critics.  "Stan Marshall, the president and CEO of Fortis Inc., which owns Newfoundland Power, has said a transmission line to St. John's makes no economic sense.

Here are some key details of the deal that never was:

• "...Newfoundland will receive approximately 800 megawatts, Labrador 200 and Quebec 2,100 from the Lower Churchill. Construction of the project will create 12,000 person-years of employment and power is expected to be on the grid by 2007."
• "The Lower Churchill hydroelectric project consists of Gull Island, with a generating capacity of 2,264 megawatts, Muskrat Falls, at 824 megawatts and Upper Lobstick, at 160 megawatts for a total of 3,238 megawatts. The cost of the project, including transmission lines, is estimated at $12 billion."

In the talks actually announced in early March 1998,  the two provinces set aside $20 million to study Muskrat Falls and focused instead on expanding Churchill Falls and building Gull Island.

20 years later we got one tiny dam and big transmission line for that.

The Telegram included a cost of the transmission line from Labrador:  "According to several news reports, the Churchill-to-St. John's transmission line -- including an underwater component across the Straits -- would cost about $2 billion, and is to be financed by Ottawa."

"The federal government's major benefit would come from reduction in greenhouse gas emissions that will go a long way to helping Canada reach emission targets established at the 1997 Convention on Climate Change in Kyoto, Japan."

-srbp-

Ego and folly #nlpoli

“When the situation was manageable it was neglected, and now that it is thoroughly out of hand we apply too late the remedies which then might have effected a cure. There is nothing new in the story. It is as old as the sibylline books. It falls into that long, dismal catalogue of the fruitlessness of experience and the confirmed unteachability of mankind. Want of foresight, unwillingness to act when action would be simple and effective, lack of clear thinking, confusion of counsel until the emergency comes, until self-preservation strikes its jarring gong–these are the features which constitute the endless repetition of history.” 

Winston Churchill,  Hansard, 02 May 1935

______________________

"If there's a deal to be had that will benefit Newfoundlanders and Labradorians,"  Premier Dwight Ball in the House of Assembly on Wednesday, "the responsible thing to do is not ... [to] let our past inhibit and restrict where we could be in the future."

That's actually a clean version of the quote.  In the heat of the moment in the House, Ball injected another phrase - "we learned from our history" - in the bit taken up by the ellipsis (three dots).

Ball's performance in the House on Wednesday,  indeed the way he has approached rumours of talks that have been abundant since last spring, make plain that Ball is very much inhibited, bound, and restricted by the history of the Lower Churchill.  He is extremely sensitive about the politics and the history.  That is the only reason he would really be quite so ridiculous as to claim there are no discussions and then at the same time talk as though there are talks underway.

Ball, Coady confirm secret talks with Quebec on Labrador hydro #nlpoli #cdnpoli

Premier Dwight Ball confirmed in the House of Assembly on Wednesday that officials from this province are talking to officials in Quebec about significant development of hydro-electric assets on the Churchill River.

We know that something very serious is going on  - in secret  - because of the way that Ball and natural resources minister Siobhan Coady answered questions in the House from opposition leader Paul Davis about recent media reports about comments from Quebec and Ball's reply to the story.  Ball was very obviously playing with words at every turn in the House. Every answer to an opposition question had a too-cute-by-half quality to it,  giving the unmistakable feeling that Ball wasn't telling anything close to the truth.

Ball has done this before, most recently when ambushed by reporters on his return from a golf and hockey vacation in the middle of the Muskrat Falls protests.  With his public support in the low double-digits,  and with a severely damaged reputation from his performance in the the Ed Martin fiasco in the spring,  Ball's passive-aggressive performance in the House on Wednesday betrays a rather curious strategy.  Ball's performance just reinforces the negative impressions people have of him  - he has trouble telling the truth - without winning him any new supporters.

Grits and Cons play dodge-fact over Labrador hydro talks #nlpoli

"There are no discussions between this government and the  Quebec government."

That's part of a statement sent out by email to local reporters from natural resources minister Siobhan Coady's office.  You can't find it on the government website or the party website.  Coady was responding to a release from provincial Conservative leader Paul Davis challenging Dwight Ball to state the administration's plans for the province's hydro resources in Labrador.

Words matter. No one has suggested that the two governments were talking about anything.  The talks would take place between Nalcor and Hydro-Quebec and, whether we take Nalcor boss Stan Marshall's own words or the local scuttlebutt,  the talks are going on between the two companies.

Jerusalem, Eldorado, and Perdition #nlpoli

Part I:  The development of our country
_______________________________

The Heritage Newfoundland and Labrador website "aims to provide school students and the general public with a wide range of authoritative information on the province's history, culture, and geography. It is based at the Memorial University of Newfoundland. Faculty, graduate students, and professional writers contribute articles, while undergraduate students provide support as research assistants."

That statement of authority is one of the reasons why the introductory sentence to its section on the impact of Churchill Falls is so intriguing:

The Upper Churchill Falls hydroelectric project remains one of the most notorious ventures in Newfoundland and Labrador's resource-development history.   

There is no such thing as the "Upper Churchill Falls" project.  There is no upper Churchill Falls or, indeed, a lower one.  There is simply Churchill Falls.

Revelation: Labrador hydro edition #nlpoli #cdnpoli

“I wonder how I would feel if a province or a region in another province prevented Hydro-Québec from building its transmission line. I would feel exactly like the people in the West do now. I understand them.”  

Quebec City mayor Regis Lebeaume had a revelation.

Great.

Let's have a chat about another transmission line, shall we?

-srbp-

Gull Island? Dead duck. #nlpoli

From the Financial Post, Tom Adams and Ed Hollett take a look at three issues that will hold up any development of Gull Island:

While Gull Island might have a modest edge over Muskrat Falls’ cost per unit of production due to its greater size and less challenging local geology, it’s highly doubtful that Nalcor would be able to offer Gull Island electricity at Ontario prices that are remotely competitive. That is, not without massive subsidies from somewhere.

-srbp-

:

Reality check for the Ontarians, please #nlpoli

If nothing else, media coverage about energy talks between Ontario and Newfoundland and Labrador shows just how much people don’t know about what is going on in the country.

Not a crowd for half measures,  the National Post ran a story on Monday morning that was rife with basic factual mistakes.  They even started the piece with a statement that had two facts in it, both of which were simply not true.

“Ontario is the latest customer to line up to purchase Newfoundland and Labrador’s growing supply of hydroelectricity…”

A legacy of secrecy and bad deals #nlpoli

In response to questioning in the House of Assembly last Tuesday and Wednesday, natural resources Minister Derrick Dalley confirmed that the provincial government is in secret talks with Norwegian oil giant Statoil to develop a new field offshore Newfoundland.

There’s was nothing in the local media about it until the end of the week when the Premier appeared to chance his position on the talks.

The Telegram’s James McLeod wrote:

Premier Paul Davis says that when he told his natural resources minister to wrap up a major offshore oil deal by the end of the year, he didn’t really mean exactly that.

 

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.

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-

Negotiating with Quebec #nlpoli #nlvotes

Kevin Aylward says that, as Premier, he’d have no problem negotiating with Quebec about developing the Lower Churchill.

A New Liberal Government will direct Nalcor to recommence negotiations with Quebec, Ontario and the federal government to develop the entire Lower Churchill. It is not financially feasible to develop only part of the Lower Churchill.

Before 2003, Danny Williams used to talk about how he would only sign a deal with Quebec if it included redress for Churchill Falls.

Then after 2003, according to Kathy Dunderdale, she and Williams spent five years trying – secretly – to get Quebec to take an ownership stake in the Lower Churchill and sign a deal without redress.

Put Churchill Falls to one side is how Dunderdale described it.

And none of the daily conventional media have reported it since she spilled the beans in September 2009.

Well, it doesn’t matter.  Dunderdale’s comments are a matter of public record.

Someone should ask her about those five years of secret negotiations and the huge change in policy she and her predecessor kept from the people of Newfoundland and Labrador until after they’d failed and why the Conservatives pretended publicly to be at war with Quebec the whole time.

- srbp -

Innu vote overwhelmingly for something

The Innu of Labrador voted overwhelmingly in favour of something on Thursday.

News media are calling it the “New Dawn” agreement and say that the vote approves the Lower Churchill development, gives Innu compensation for Churchill Falls and does a few other things.

Not the least of those other things is “pave the way” for Muskrat Falls.

Beyond that, details are sketchy.

Kathy Dunderdale, seen at left waiting to receive communion outside the House of Assembly,  took time out from her junket to Europe to issue a news release about the vote.  The release contained no details on the deal.

What exactly are we talking about here? 

A very good question, grasshopper.

In late 2008, Danny Williams announced something called the New Dawn agreements. 

You can find a news release on it, as well as a link to a document signed by the provincial government and the Innu nation.  Labradorians might find the accompanying map – the one detailing Innu land – to be a bit more interesting than anything else.

Supposedly it was the last step before a final agreement set to be finished by the spring of 2009.   That release had lots of interesting details in it, including reference to privatising Churchill Falls.

Local media didn’t report on the details very much.

Okay. 

That’s an exaggeration.

They didn’t report the details at all.

And then suddenly it wasn’t the end of negotiations.

Like poof,  the Innu had to negotiate again.

They cancelled a vote scheduled for January 31, 2009 in the face of so much opposition to the deal the Innu Nation leadership had no choice but stop things cold.
Lots of talks and rumours of discussions followed but at no point did anyone discuss – nor did anyone report – anything on what the Innu and the provincial government were talking about.

Even last November, the Innu were the most noticeable cloud raining on Danny’s “I am outta here” parade. 

From an American consular briefing note leaked earlier this year, we know that Emera balked at the first discussions about something called the Lower Churchill project.  In the end, Danny Williams gave away a whole pile of stuff in order to get them to show up for his surprise retirement announcement.

So what did the Innu get for all their hard bargaining from the guy who was that anxious to get out the door of the Premier’s Office he gave Emera 35 years of free electricity, discount electricity above and beyond that plus a share of transmission revenue in Newfoundland and Labrador no other company has, all in exchange for building a power line across the Cabot Strait?

Emera didn’t have to negotiate half as long as the Innu to get their free gifts.
And they didn’t have a legitimate claim to own the land and resources everyone wanted to develop.

And that was after Williams used the legislature to seize generating plants from other companies just because he could.

T’would be nice if someone turned up some details and told the rest of us what the Innu voted on.

Like say, is this the final deal and will it pave the way for Muskrat Falls.  Or is it - as Dunderdale’s news release says plainly -  a “non-binding agreement” that will form the basis for future talks and an Innu land claims agreement?  In other words, this vote doesn’t pave the way for anything except more talks.

This is a wee bit more important to the future of the province, after all, than the name of Danny Williams’ latest hockey team. 

- srbp -

Dunderdale using rigged deck against public on Muskrat Falls

Whenever anyone moans about the 1969 power contract with Hydro-Quebec they can thank the last four Premiers of Newfoundland and Labrador – from Beaton Tulk to Kathy Dunderdale – for guaranteeing Hydro-Quebec’s unaltered command of Churchill Falls power.

In order to hide her own financially disastrous Muskrat Falls megaproject from public scrutiny, Kathy Dunderdale is using a cabinet order issued in December 2000 when Beaton Tulk was the placeholder Premier between Brian Tobin and Roger Grimes.

Take a look at the order – Regulation 92/00:

3. Newfoundland and Labrador Hydro is exempt from the Electrical Power Control Act, 1994 and the Public Utilities Act for all aspects of its activities pertaining to the Labrador Hydro Project as defined in section 2.

But how is the Labrador Hydro Project defined?

That’s where you get to see the gigantic mess that Tulk started and the rest have continued.

The exemption order doesn’t just apply to the Lower Churchill and all the transmission facilities associated with it, as most people assume.

Nope.

Here’s the very first thing included in the definition of  the “Labrador Hydro Project”:

… generation and related facilities at Churchill Falls , Labrador

In one clump of eight words, cabinet destroyed any power the Public Utilities Board had under the Electrical Power Control Act, 1994 to manage electricity in the province to make sure that ordinary citizens get the cheapest possible electricity. 

Under the EPCA, 1994,  the PUB was supposed to be able to review electricity generation in the province to make sure consumers don’t get wallet-raped in order to have heat and light to their homes.  Newfoundland Power or Newfoundland and Labrador Hydro could ask the PUB to review demand and supply in the province.

As then-Premier Clyde Wells put it in 1994:

[The Electrical Power Control Act]  authorizes the Public Utilities Board to redirect any power - any power, no exceptions - to meet the needs of the people of this Province. Not expropriating anything from anybody. It is to manage the power that is generated in this Province in such a manner as to first and foremost meet the needs of the people of this Province. It makes no specific reference to Upper Churchill. It makes no specific reference to power companies. It makes no specific reference to any individual generator of power.

But with Churchill Falls exempt from the Act, those sections of the Act that would protect consumers are useless.

Kathy Dunderdale can get on open line and talk all she wants about legal opinions that warn against using powers under section 92a of the Constitution Act, 1982.  Truth is there is no risk:  there are no powers since she and her current cabinet colleagues decided to to uphold the December 2000 exemption.

Tulk and his cabinet may have signed them away, but every cabinet since then has endorsed them.  Kathy Dunderdale and her cabinet are actually proud of their decision.

It gets better, though.

In the fall of 2000, the provincial government issued a series of orders that exempted every major hydro-electric project on the island portion of the province from the EPCA.  Those exemptions still exist even though several of the projects are now owned entirely by Nalcor as a result of the 2008 expropriation bill.

What that means for consumers is that Nalcor alone can decide what it wants to do with those sites. Even if there was plenty of electricity available for Nalcor to meet provincial needs at the lowest possible cost without building Muskrat Falls, there is no way the Public Utilities Board could force Nalcor to halt the megaproject and do the sensible thing.

Once a line to Nova Scotia flows through, Nalcor can ship discount power out of the province from its island generating sites and force local consumers to use super-expensive Muskrat falls power all thanks to decisions dating from the fall of 200 and endorsed by every administration since.

So the next time Kathy Dunderdale talks about independent reviews or asking the PUB to do anything, just remember:  legally, the regulatory deck is stacked against consumers.  The whole thing is a giant set-up to favour Nalcor and its corporate partner Emera.  Beaton Tulk may have started it, but Kathy Dunderdale and the current cabinet have made it their own.

Just in case you think Kathy Dunderdale doesn’t like Hydro-Quebec, just remember that she and her predecessor spent five years trying to get HQ to take an ownership stake in the Lower Churchill. 

And she never said boo to anyone until long after her secret efforts failed.

- srbp -

Dunderdale and her desperation

Kathy Dunderdale is trying desperately to hide  details of her Muskrat Falls megaproject from public scrutiny.

You can also tell she is trying desperately not to look like she is desperately trying to hide details of the project from public scrutiny.

You can tell she is desperate because as soon as word leaked out that she was trying to keep the Public Utilities Board from examining whether or not her pet project is the cheapest way to meet the province’s energy needs – Dunderdale’s major claim on the project – Dunderdale quickly claimed she would let the PUB pronounce on its cheapness even though she had already decided they would not have the time they ought to have – by law – to do their jobs.

And then in her desperation, Kathy Dunderdale drops this sort of foolishness onto the public record:

We have been open, we have been transparent, we have been accountable — something they knew nothing about when they were trying to develop the Lower Churchill…

To quote a famous politician Kathy might know:  nothing could be further from the truth.

Kathy Dunderdale and that famous politician spent five years trying – secretly – to lure Hydro-Quebec into taking an ownership stake in the Lower Churchill.

Five years.

Totally secret talks.

Dunderdale participated in both the secret talks and in hiding the talks from the public.

Some people know because Kathy Dunderdale spilled the beans, much to the chagrin of that famous politician, during an appearance on a local radio talk show long after it became plain that Hydro-Quebec just wasn’t interested in Kathy and her friend and what they had to offer.

The rest don’t know because none of the province’s conventional media reported Dunderdale’s stunning admission 18 months ago or at any time since.

- srbp -

Dunderdale flips and flops: Muskrat Exemption Errata

Simple subject.

Mondo inaccuracies.

Ginormous confusion

Tuesday was not a good day for anyone trying to figure out what the provincial government is doing with Muskrat Falls.

First of all, let’s go with the basic stuff. 

CBC reported on Monday that the provincial government will use a 1999 amendment to two laws in order to exempt the Muskrat Falls project from scrutiny by the Public Utilities Board.  Specifically, the PUB won’t be able to look at Muskrat Falls and determine if it is the lowest cost project as provided in the Electrical Power Control Act (1994). CBC’s report included confirmation of the exemption from the province’s natural resources minister, Shawn Skinner.

That part is pretty clear.

CBC’s report on Monday and Tuesday night made a couple of references to changes to legislation tied to the Lower Churchill project. Take this one from the online story as an example:

The exemption actually dates back to 1999, when Brian Tobin's Liberal government passed legislation exempting any Lower Churchill project from PUB oversight.

*Insert nasty horn sound effect*

It is hard to imagine being more obviously wrong.

As your humble e-scribbler recounted in another post, the change Kathy Dunderdale and crew are relying on happened in December 1999.  Tobin’s project was pretty much dead by that point although the politicians still talked about it like the corpse could move.

Then-energy minister Roger Grimes made it clear the changes to the Public Utilities Act and the Electrical Power Control Act, 1994 were intended to cover other projects  - not the Lower Churchill at all - that might have to come along to fill a gap if the line from the Lower Churchill to the island didn’t happen before the island needed extra power.

That ties to Kathy Dunderdale’s claim in the House of Assembly:

It was their government that exempted the Lower Churchill proposed project of Premier Grimes and at least two of the people opposite to have an exemption from regulatory review.

She’s talking about an order-in-council, apparently:  a cabinet decision.

But then Dunderdale claimed that previous Liberal administrations had exempted every hydro project since 1995.

Minor problem:  the Electrical Power Control Act, 1994 didn’t allow for any exemptions at all.  In fact, the 1994 legislation set the provincial energy policy and gave the PUB the power to make sure that, among other things, their decisions “would result in power being delivered to consumers in the province at the lowest possible cost consistent with reliable service…”.

The PUB got the power to reject a project, order producers to build the lower cost project or even reallocate power from existing projects like Churchill Falls to meet provincial needs.

Exemptions don’t fit with that commitment to protect consumers and to exercise proper control over provincial resources in the public interest.

You can tell Dunderdale was mightily confused on this whole matter because a few minutes after she made the claim about exemptions when exemptions didn’t exist, she said that:

“Mr. Speaker, not only in 1999 did they bring in the legislation allowing for an exemption; in 2000, they produced an Order-in-Council that exempted the Lower Churchill from review by the PUB, Mr. Speaker.”

1995 or 1999? 

Which is it?

Then there’s this contradiction from Skinner’s confirmation that the PUB will not be looking at this project to determine if it is the lowest-cost option:

We have engaged the PUB to review and to determine whether that is the case as well and make that information available to the people of the Province, Mr. Speaker.

So apparently the PUB will review the project but it also won’t review it.

Huh?

Let’s see if more accurate information surfaces in the next few days.

- srbp -

 

 

.

Words and meaning

In a debrief with the Morning Show’s Jeff Gilhooley Friday morning, CBC reporter Brian Callahan told the audience that yesterday Stephen Harper committed to a loan guarantee for the Lower Churchill project “at Muskrat Falls.”

Supposedly these were harper’s exact words.

In the clip Callahan used of harper actually speaking, Harper did not say “at Muskrat Falls.”

Those words aren’t in any of the Conservative media materials.

In fact, in his speech Harper did not say “will provide”.  Harper said that based on the three criteria he mentioned, a re-elected Harper government “would” provide a loan guarantee.

That could prove to be a not so subtle distinction.

Words are important.

Meaning is important.

So where did those words “at Muskrat Falls” actually come from?

- srbp -

Torque Wars: Media, politicians and the Muskrat Falls loan guarantee

Some people will tell you there the federal and provincial governments have a deal for a federal loan guarantee on Muskrat Falls.  The provincial government has already met three criteria set by the federal government and Stephen Harper confirmed that in a speech in St. John’s.

That’s what you could take out of some stories from different media outlets coming out of Harper’s campaign stop in Newfoundland and Labrador.

Bear in mind though that the loan guarantee story took a couple of turns within the past 24 hours even for one single news outlet. 

On Wednesday, CBC reported the deal was done:

Multiple sources tell CBC News, though, that the federal and provincial governments have reached a deal on the terms of a loan guarantee.

Multiple sources.

Multiple unidentified sources.

Not even a hint if they were highly placed in both the federal and provincial governments.

Sometimes that happens.  You don’t even give the slightest clue as to the authenticity of the sources on which the story is based. Put it down to a judgment call.  Doesn’t mean that the comments are right or wrong, but it could put a question mark over the accuracy of the information.

On Thursday afternoon, CBC reported Stephen Harper’s comments during a campaign stop in Nova Scotia:

“The details still have to be worked out," said Harper speaking in Halifax Thursday morning. "There is a lot of discussion still to come, but it is obviously an important project."

Then there was Harper’s speech in St. John’s, impeccably timed to coincide with super hour newscasts. and obligingly carried live by the province’s electronic news media.  It was like Brian Tobin’s 1999 provincial election campaign launch but this time everyone gifted a political campaign with the kind of airtime they could never afford to buy.

The Conservatives issued a news release headlined “Harper endorses Lower Churchill Project”:

Prime Minister Harper noted that, with these criteria in mind, his Government will provide a loan guarantee or other financial support for the Lower Churchill hydro-electric project.  The project will provide Atlantic Canada with a major new source of clean energy.  Support for clean energy projects will be based on the principles of respect and equitable treatment for all regions of the country.

The criteria are:

• National or regional significance.
• Economic and financial feasibility and merit.
• Significantly reduces carbon emissions.

The backgrounder with the news release included this comment:

A re-elected Conservative Government will provide a loan guarantee or other financial support to the Lower Churchill hydro-electric project on the basis of these criteria.

Not everyone accepted the deal is done, though. The Toronto Star reported that

Harper said the federal government has been discussing the Lower Churchill project for “some time” but suggested more negotiations were needed to cement Ottawa’s backing.

“There’s a lot of discussion yet to go but I think the opportunities of the project for this country are evident,” he said.

CTV said that Harper remained “vague” about details:

However, when it comes to federal funding for the project, Harper remained vague.

"In terms of specifics, those things still have to be discussed," he said.

Even CBC couldn’t agree on what happened within its own story on the speech.  A cutline for a photo illustration said:  “Stephen Harper says his government will provide a loan guarantee to the Lower Churchill project, if it meets three criteria.” The body of the story said Harper had already committed to the guarantee.

For all the stories that have run talking about a loan guarantee,  you have to note the appearance of something new in the actual Harper statement:  “equivalent financial support.”  

Conservative briefers travelling with Harper reportedly told reporters that the loan guarantee would have “zero” cost. If it really had no cost then it would be hard to imagine why the federal government would want to provide a cash injection. 

The Toronto Sun referred to unnamed party officials who said that the federal government would “co-sign” any loans with the provincial government.  What isn’t clear at this point is how much of the project would be financed with loans and how much would be funded through bond issues or equity stakes with other investors.

What’s really in behind these media reports is a torque war among the politicians involved. 

For Kathy Dunderdale, Muskrat Falls is the key to her election campaign in October. She’s working hard to distinguish herself from Danny Williams. Delivering a loan guarantee for Williams’ retirement project with a prime minister Williams could never deal with would be exactly what she wants.

No one should be surprised to find out that Dunderdale’s people have been pushing hard to convince reporters that the thing is really in the bag.  After all, this wouldn’t be the first time in the last seven or eight years that the provincial government claimed they had something, like a loan guarantee from Harper in 2006, that local reporters dutifully reported only to have the thing disappear into nothingness.

For Harper, it’s a matter of picking up seats in Newfoundland and Labrador while at the same time not creating a political meltdown in Quebec or other provinces.  He will also have to be very sensitive to the financial implications of committing the federal government to billions of dollars of new public debt.  After all, that is what loan guarantees really mean.

They don’t come with “zero cost”.  Until the debts are paid off, they show up on the federal books as liabilities. The federal government can negotiate a fee for providing the guarantee but that can’t be high enough to basically wipe out the advantage to the provincial government of having the guarantee in the first place.

No one should be surprised that Harper’s people are trying to make this look like Harper is willing to support the project while at the same time giving him plenty of language he can use later on to justify it if the federal government doesn’t deliver a loan guarantee or other financial support.

Dunderdale’s crowd will have some sympathy, incidentally, from Harper’s local team.  After all, they want to grab as many seats in the province as they can.  Playing to the local expectations are one way of helping that cause.  At the same time, though, the federal Conservative organizers have to be sensitive to the larger issues.

As for the debts showing up on balance sheets, the same thing will happen for the provincial government as a result of any debt Nalcor takes on to build the Muskrat Falls project.

And when it comes to one of the key Harper criteria – economic and financial feasibility and merit – that could be one of the points on which the whole thing will hinge.

But is there a done deal?

Absolutely not.

If there was, Stephen Harper wouldn’t be saying otherwise.

- srbp -

Related:  “Undisclosed risk:  financing the Lower Churchill”

Pushback in New England on hydro lines

Environmental concerns are causing problems for a proposed electricity transmission line that could help carry Labrador electricity into the United States.

The Northern Pass project will carry electricity from Quebec into New Hampshire and on to the rest of New England.

Some local residents in New Hampshire are concerned that the proposed route will damage the state’s tourism industry. 

John Harrington is a retired newspaper publisher.  He told North Country Public Radio:

“What’s being threatened is the only thing we really have left, which is tourism. All for the convenience of people far to the south. And we’re going to wind up with this huge scar right down through the narrowest and most fragile part of New Hampshire.”

Then there’s the question of whether or not big hydro is actually green. Only Vermont currently accepts hydroelectricity from large dams as renewable and green and therefore eligible to count in state-mandated energy calculations.  Most New England states require that a percentage of electricity in the state come from renewable, green energy sources.  Both the American federal and some state governments also give cash incentives to renewable energy projects.

In some states, debate is already raging about the implications of renewable energy policies.  In last fall’s gubernatorial campaign, incumbent Deval Patrick’s Republican challenger included support for big hydro as part of his campaign platform. 

In Connecticut, Northeast utilities senior vice-president James Robb told a conference last November that without big hydro, “ it will be very challenging to meet those goals” of increasing the use of renewable energy sources to 25% of generation by 2025.  Robb said that there are projects but many are uneconomical.

Still, the big hydro projects don’t meet existing guidelines.

The main concern regarding hydro is that the flooding resulting from dams causes leaves and other foliage to decompose, emitting methane, one of the worst greenhouse gases. The Canadian officials [at the November conference]  argued that the water in their provinces is so cold that the leaves don’t decompose.

“I’m struggling here in New England with how New England is going to meet its renewable requirements. Without Quebec and Newfoundland & Labrador, you will struggle to hit that,” said Ed Martin, president and CEO of Nalcor Energy, which is based in the hydro- and wind-rich Newfoundland & Labrador. “Hydro is part of the mix that has to happen if you are going to meet the goals in New England.”

- srbp -

Labrador Metis to seek injunction blocking Muskrat project

The NunatuKavut Metis Nation will be seeking an injunction to halt environmental assessment hearings on the Muskrat Falls project, according to CBC News.

Chris Montague of the NunatuKavut Metis Nation said the group is meeting with a lawyer Tuesday morning.

He said the Metis group expects to file an injunction against Nalcor, the provincial environmental department, and the Canadian Environmental Assessment Agency, as soon as Tuesday or Wednesday.

UPDATE:  The Metis filed an injunction on Tuesday morning in the Supreme Court of Newfoundland and Labrador, according to the Telegram.

- srbp -