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.

Water Rights, Muskrat Falls, and the Muskrat Falls Disaster #nlpoli

Forget everything else that you know about Muskrat Falls.

The entire project hinged on Nalcor's ability to control water flows on the Churchill River.  Nalcor's internal assessments showed that without the ability to control water flows, Nalcor's Lower Churchill project would reliably produce only about 17% of its nameplate capacity.  That means that Muskrat Falls would have a firm generating capacity of about 140 megawatts,  which is less than the free block of power Nalcor guaranteed Emera and Nova Scotia.

Nalcor gambled on a dubious interpretation of the 1969 power contract and lost.

The impact on Muskrat Falls will be devastating.

Here's why.

Firm and Unfirm #nlpoli

With the House of Assembly open again, the major topic of Question Period was Muskrat Falls and the second version of the deal to ship power to Nova Scotia.

Premier Kathy Dunderdale explained it on Monday in terms of firm and “non-firm”.  Firm power is what you know that the hydro plants will be able to produce reliably.  The unfirm power is the stuff that you can get when there is plenty of water.

What’s interesting is how much of this unfirm power the Premier says is around.  It is:

“half a terawatt to four or five terawatts a year. Based on fifty years of hydrogeology, the amount of snow or rain in this Province, we have been able to commit to Emera 1.2 extra terawatts of power on average; …, some years that might be 0.5 terawatt, another year that might be three.”

On the face of it, that is such a really interesting idea that it is worth digging into the notion a bit more.

The Mystical Lords of Mu’skr’at Fa’alls #nlpoli

The water management controversy flared briefly at the end of last week thanks to Geoff Meeker’s blog at the Telegram and a couple of interviews by the 2041 Group and Nalcor’s Gil Bennett.

This is one of those issues where a lot of people either tune out early on because it appears highly technical and complicated.  Actually it isn’t.  The topic only appears complicated.

It only appears complicated because of the very convoluted, long-winded, and very unhelpful way the cats at Nalcor talk about the water management agreement.  They go all techie.

Once you get a handle on the whole water management thing, it’s quite easy to understand and it’s quite easy to see where the possible problems are.

Innu seek halt to water management application

In a 51-page letter filed with the public utilities board on December 15, the Innu of Ekuanitshit are asking the border to refuse to approve any agreement or suspend NALCOR’s application based on NALCOR’s failure to adequately consult with them as provided under the Constitution Act, 1982.

Specifically, the Ekuanitshit Innu are seeking:

AN ORDER refusing to approve the agreement or, in the alternative, suspending Nalcor’s application and setting aside for future examination the duty to consult and accommodate the Innu of Ekuanishit; and

AN ORDER: that on an interim basis and in any event of the cause, Nalcor pay all expenses incurred by the Conseil des Innus de Ekuanitshit in connection with Nalcor’s application to the board, including costs of counsel, engineers, valuators, stenographers, accountants and other experts or assistants retained by or for the Conseil des Innus de Ekuanitshit in and about the inquiry; and
that Nalcor and the Conseil des Innus de Ekuanitshit are to attempt to agree on a procedure whereby, upon incurring costs and disbursements from time to time up to the end of the inquiry, trial, the intervenor will so advise the applicant and the applicant shall
pay them within a given time-frame, unless Nalcor objects, in which case it shall refer the matter to the Board.

The application for costs is based on the magnitude of the project, the scope of the potential infringement on the Innu’s aboriginal rights and the Innu’s lack of financial resources.

In a separate 143-page letter dated December 21, 2009, the Innu of Uashat Mak Mani-Utenam make the same application to the public utilities board.  Both letters include commentaries on aspects of the NALCOR proposal for the Lower Churchill.

-srbp-

TWINCO seeks intervener status in water management decision

The Twin Falls Power Company is seeking intervener status in the hearings at the public utilities board into the water management application by NALCOR Energy for the Churchill River.

In a letter dated December 17, 2009, TWINCO president James Haynes said his company may be affected by any decision in the application.

2. Twinco has a Sublease with Churchill Falls (Labrador) Corporation Limited ("CF(L)Co") whereby CF(L)Co is obligated to supply 225 MW and 1.97 TWh of power and energy to Twinco, included as Exhibit 4 of the Application. Twinco supplies power to two customers, 10CC and Wabush Mines, both of which are located in Labrador West and as result Twinco could be affected depending on the disposition of this matter.

3. Twinco owns and operates two 230kv transmission lines that transmit power and energy from Churchill Falls to Labrador City and Wabush in western Labrador and as a result could be an affected transmission provider.

Twin Falls Power company is owned by Wabush Mines, IOC and  NALCOR with each company holding one third of the shares.  It supplies power to the mines in western Labrador. 

-srbp-