The unsustainable lightness of Tom Marshall

Tom Marshall keeps a tight grip on the provincial government’s purse strings.

He has to do that.

The damn things won’t stay that wide open on their own.

In presenting the provincial government’s budget to the House of Assembly on Tuesday, Marshall announced that the Conservative administration of Kathy Dunderdale would continue the practice of unsustainable public spending set under Dunderdale’s predecessor, Danny Williams.

Overall government spending will grow by 4.9%;  that’s about twice the rate of inflation. 

A windfall in oil prices directly attributable to turmoil in the Middle East helped to erase a forecast cash deficit of $959 million and turn it into a modest cash surplus of $133 million. (Estimates 2011 p. iv)

For the past two years, Marshall claimed the government’s profligate spending came from the need to spend cash to fuel an economic recovery. 

Now he’s got a different excuse:  we can afford it.  Marshall told reporters that the provincial economy was “sizzling”. That’s nonsense, of course.  The economy is actually becoming increasingly fragile and public spending is sustained by cash coming from a volatile source, namely oil. Marshall seems to know that just like he knows the public debt is something he should be reducing.

Oddly, Marshall never seems to do anything about it. 

Marshall forecast that the province’s net debt will increase in 2011, largely the result of continued growth in unfunded pension and benefits liabilities in the public service.

And that’s despite repeated warnings from the province’s auditor general among others.  In 2009 a provincial cabinet minister resigned unexpectedly citing concerns about unsustainable public spending.  Earlier this year, Auditor General John Noseworthy repeated the same concerns;  interestingly enough he did it in a report on Fiscal Year 2009, the same year Paul Oram left cabinet.

Two years later, the provincial government is still on the same path.

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Related:

• Fragile Economy:  Staying the course
• Fragile Economy:  reductio ad argentum
• Fragile Economy:  …and two steps back
• Fragile Economy:  now three steps back and loving it
• Fragile Economy:  hard numbers
• Fragile Economy: The Public Sector

On minority governments…

Before everybody’s head explodes, just think about this for a second.

If Canadians are still not sure about giving Harper and the Conservatives a majority, Liberal leader Michael Ignatieff is actually playing an interesting strategic card in his comments to CBC’s Peter Mansbridge about the prospect that the Liberals could form a government without going back to the polls right away.

There might be one small flaw in the logic of it though, and that remains the problem with all of these discussions about minorities dating back to about 2004.

Much of the outcome depends on what the prime minister at the moment advises the Governor General.

If Harper goes back in a dead-on tie with the Liberals, he gets to try and form a government first.  If the Conservatives fail to get the confidence of a majority in the House, he is obliged to head over to Rideau Hall.  If the prime minister advises the GG to invite Ignatieff to give it a go, then that’s pretty easy.

But what if he doesn’t?

Paul Martin had that option once and went for the writ.

What might have happened if the Governor General refused to take his advice and instead tried the course of inviting either Jack Layton or Harper to have a go?

The same thing  - GG refusing to take advice - could well happen again in the scenario Mansbridge and Ignatieff discussed.

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Risky Business

Natural resources minister Shawn Skinner has a letter to the editor  in the Telegram criticising former Newfoundland and Labrador Hydro director Ed Hearn.

Hearn, you may recall, suggested in a letter to the editor of his own that the provincial government should be looking at all its options before embarking on the very risky Muskrat Falls venture.

Hearn wrote, in part that:

Section 92A [of the Constitution Act, 1867] provides authority to tax, set export quotas and prices with respect to electrical energy produced in the province. Properly drafted legislation could allow the province to recall energy from the Upper Churchill at a cost of two mils (one-fifth of a cent) per kilowatt hour for domestic needs. Similarly, properly drafted provincial legislation would prevent the renewal of the Upper Churchill contract in 2016 unless there were proper price adjustments and energy reserved for provincial needs.

Skinner  - or more accurately his letter-writing aide - summarises it this way:

Section 92A resolved these issues by confirming and expanding provincial power to include the authority to legislate in respect of the export of natural resources and electricity.
This theoretically includes the power to impose restrictions upon the export of electricity from a province, or to require electricity destined for export to be diverted to the provincial grid.
Mr. Hearn uses the common term for such legislated action: to “recall” power.

Too risky, says Skinner, to go after something which he dismisses as theoretical.

Instead, the government will force local taxpayers to foot the bill for a very costly venture called Muskrat Falls that makes financial sense only if you accept highly speculative – and hence risky – oil price forecasts, highly dubious  - and hence risky – forecasts of domestic electricity demand, and accept the gigantic risk of imposing on the most benighted taxpayers in the province the single largest increase in public indebtedness in the province’s long, sorry financial history.

Thank merciful heavens Shawn Skinner is scared of a financial danger.

Praise be to the Almighty that Shawn and his cabinet mates are the very souls of fiscal prudence and responsibility.

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Seen on the #elxn41 campaign trail…

New Democrats Jack Harris and Ryan Cleary double-teaming the Health Science Complex cafeteria pressing the flesh, smiling and generally mixing and mingling with voters trying to grab a bite to eat.

The pair left tent cards on the tables that said something about joining Ryan or Jack’s team.

Wonderful stuff.

And right behind them,  a woman bussing tables right behind the pair who dutifully took the tent cards and chucked them into the trash next to the fries, dressing and gravy leavings.

One could almost imagine the grizzled veteran campaigner Harris whispering to his relatively younger protégé:  Now then,  young Cleary, mark her down as doubtful.

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The view from Flower Hill #elxn41

With New Democrat Jack Layton’s pronouncement in St. John’s over the weekend, all three major federal party leaders have pledged federal financial support for a plan to export cheap hydro power from Labrador into Nova Scotia while having the people of Newfoundland and Labrador pay for it through greatly increased electricity rates.

Layton actually went a bit farther than the others.  If New Democrats form the next federal government, he’ll also drop $375 million into building the link to Nova Scotia so the link that let’s them get their free power will be even cheaper for Nova Scotians.

Now if you look at the actual words of what they said, they never talk about Muskrat Falls, specifically.

They talk about the Lower Churchill, generally and what Jack, Stephen and Michael endorsed now is really nothing more than their predecessors did at any point over the past 40 years.

Well, with one crucial difference.

For the current Conservative administration in this province, there is no longer a Lower Churchill project that sold most of its power outside the province and made money doing so. 

There is now only a plan to build a small dam on the bottom end of the river and build expensive transmission lines to run the juice along to people in St. John’s and another bunch in Nova Scotia. 

Only the people in Newfoundland and Labrador will pay for the power, as Premier Kathy Dunderdale told the provincial legislature during the current sitting.  The others need only pay whatever their markets will allow. 

And that, as Premier Dunderdale well knows, is far below the price she plans to put to Nan and Pop on Flower Hill in the heart of the working class districts of St. John’s. 

The numbers for that don’t work – Michael Ignatieff’s remarks notwithstanding – unless one is quite happy to saddle the growing number of retired people in Newfoundland and Labrador with the burden of a Labrador hydroelectric nightmare…again.

Newfoundland and Labrador’s demographics are such that by the time Muskrat Falls comes on stream in the latter part of this decade, pretty close to a majority of the adults in this province will be either retired already or on their way to retirement in short order. 

Regardless of what happens to the price of oil, the provincial government wants to double their electricity costs.  Fixed income and low income Newfoundlanders and Labradorians will definitely pay more for electricity if Kathy Dunderdale gets her wish.  Now she and her colleagues have all sorts of rationalisations to explain away objections to their scheme.  Undoubtedly, those rationalisations let them sleep soundly at night even if, in the funnier versions, they sound like Pakleds from the latest episode of PC: TNG. 

Those sorts of considerations don’t really matter for the federal party leaders.  Such details are really the whys and wherefores that would only come from silly parsing of the whole scheme, to borrow a phrase.   For the federal party leaders, their stump speeches in Newfoundland and Labrador are designed to do one thing:  win a couple of votes. 

There’s not much thought in it than that, nor is there a detailed analysis of anything,  Each party leader knows nothing more than that this Lower Churchill thing is supposedly very popular and saying nice things about it will win them votes.

Jack Layton has the most ambitious version.  That’s not just because he is way behind nationally and say riskier things. It’s also a function of the fact that he has to win seats in Nova Scotia and he and his local team in Newfoundland think they have a shot at a second seat in St. John’s South – Mount Pearl.  There is no better way than to stand firmly behind something that looks hot right at the moment.

But to be frank, if someone had wanted a loan guarantee for a new reality show called Dancing the Lancers with the Stars, the boys would be lined up four-square behind that as well. Jack would up the ante by offering to play accordion for his guest appearance on the show.

As for public interest in the Lower Churchill – the thing that drives the federal interest in winning votes - let’s just you shouldn’t be surprised if someone told you that the most recent public opinion poll showed that far less than 10 percent of Newfoundlanders and Labradorians identified the Lower Churchill as the most important issue facing the province today.

We are talking single digits here.

But the whys and wherefores of it all don’t matter…

Unless you happen to live on Flower Hill.

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Libs, Cons and Dips put faith in preposterous financial claims #exln41

The people who push specific megaprojects usually over-estimate the benefits and under-estimate the costs.

That’s the result of a Scandinavian study of these sorts of things. The title is Megaprojects and risk.  They used examples taken from around the world:

Cost overruns and lower-than-predicted revenues frequently place project viability at risk and redefine projects that were initially promoted as effective vehicles to economic growth as possible obstacles to such growth. The Channel tunnel, opened in 1994 at a construction cost of £ 4.7 billion, is a case in point with several near-bankruptcies caused by construction cost overruns of 80 percent, financing costs that are 140 percent higher than those forecast and revenues less than half of those projected (see chapters 2-4). The cost overrun for Denver’s US$5 billion new international airport, opened in 1995, was close to 200 percent and passenger traffic in the opening year was only half of that projected. Operating problems with Hong Kong’s new US$20 billion Chek Lap Kok airport, which opened in 1998, initially caused havoc not only to costs and revenues at the airport; the problems spread to the Hong Kong economy as such with negative effects on growth in gross domestic product. After nine months of operations, The Economist dubbed the airport a “fiasco”, said to have cost the Hong Kong economy US$600 million. The fiasco may have been only a start-up problem, albeit an expensive one, but it is the type of expense that is rarely taken into account when planning megaprojects.

With that as background, consider that all three federal political parties are backing a megaproject in Labrador where the numbers just don’t add up.

labradore does a fine job of exposing the problem using comments from the provincial legislature last week.

Opposition leader Yvonne Jones asked Premier Kathy Dunderdale about current costs estimates for things like a transmission line from Labrador to St. John’s.  The current forecast price is the same as the price in 1998 despite the fact that  - for example – steel prices have climbed 200% in the years since.

Dunderdale’s response is really interesting.  She doesn’t explain anything but basically stands behind the contention that she and her geniuses have somehow magically eliminated the impact of inflation on this project.

Minor problem, notes labradore.

Nalcor’s geniuses told the environmental assessment panel reviewing the project that inflation still works, but only for things they have no interest in doing.  Like say a power line to the small communities in Labrador who will will only get to watch the power lines run by their communities on the way to the island and Nova Scotia:

In fact, in 2001 the Province estimated that the cost of constructing transmission lines to these communities would be in the range of $300 million. With inflation and increased costs for materials and labour, that number would be even higher today.

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End of an election sign era #elxn41

People have hung election signs on it for as long as the Waterford Hospital has had it there at the edge of its property at the intersection of Cowan Avenue and Waterford Bridge Road.

Those signs are gone now, apparently at the request of the regional health agency.

The hospital used to be well out in the countryside but as the city grew around it, the fence became a highly visible feature on one side of a busy intersection.

The federal riding used to be St. John’s West.  These days it’s called St. John’s South - Mount Pearl.  Some people think it is too close to call at the moment. Your humble e-scribbler agrees and as the election wears on, the actual battle seems to be going on between the New Democrats and the Conservatives for the provincial Conservative vote.

Now some of you are thinking that doesn’t make any sense. Just remember though, that voting in St. John’s is not along some left/right ideological axis. Something else drives it.

The New Democrats are fired up though.  Some of them have a personal hate on for Liberal incumbent Siobhan Coady. It turns up in all sorts of ways, not the least of which is one  twitter idiot who tries spam-bombs Coady’s twitter feed.  All he does is show just exactly how much an an amateur pol he is. Hint: spamming only shows you are a professional horse’s arse.

But anyway…

Before the signs disappeared, the corner of Cowan and Waterford Bridge Road was a good spot to see local political signage.  The centrepiece of the affair was a big four by eight Coady affair that went up before the ink was dry on the writ.  The Grits have been aggressive, if nothing else. 

The Dippers countered with a batch of four by fours with the name “Jack Layton”, the candidate in some Toronto riding.  The local guy – Ryan Cleary – got a bunch of two by twos of the kind usually mounted on lawns.  You can see the spread in the picture.

Now from a design standpoint, there are two things to notice here.

First, look at the good sign design ideas. Coady’s big sign makes her name the largest thing.  it’s visible from quote a distance.  Her web address is there as well. The picture’s a throw-away but overall this is a well designed sign.

The Layton signs are the current NDP design and they are good.  The last name of the candidate is prominent and can be seen easily seen at a distance.  They don’t show as well at night as they should but that’s a separate issue. 

Problem – and here’s the second thing – this layout wasn’t a good thing for Cleary.  His two bys are the older type he used the first time he ran. There’s so much other info on the sign, they made his name too small to be seen at any serious distance.

The fact that Jack’s signage overwhelmed Cleary only compounds the problem and just doesn’t make any sense.  Jack isn’t a vote draw.  The fact they plastered the space like wings on Coady’s big sign only made hers stand out even more.  That just compounded the basic problems with their signage.

Cleary’s new signs are better:  they profited by following the template national design but their night-time visibility is still worse than the other parties’ signs.

When the Connies showed up, their small verticals were too small to show the candidate’s name – Loyola Sullivan – in a way anyone could read. They fixed that problem with the four bys that went up later.  The Dippers responded by a volume attack, again, that really didn’t do anything to give them greater prominence, visibility or anything else.

Just to finish it off, a local lawn care guy got into the act.  Maybe Mr. Mulch is running for the Greens.

Don’t laugh too soon, though.  You can use his signs to show just how much experienced political types have developed signs that use experience to deliver effective signs.  Mulch, by contrast is burdened with all sorts of detail.  The result is a sign you cannot read unless you right on top of it.  Given that people read most of these signs in their cars, they’ll see Mulch as they speed by and certainly without having the time to get the telephone number to call or his website.

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The Weekly Traffic

No one will miss the very fitting result of this week’s edition of your weekly traffic survey.

Frankly your humble e-scribbler was a wee bit surprised that an old post about measuring the effectiveness of your public relations program could garner so much attention.

But there it is.

Take note that two of the big stories this week discuss cheaper alternatives to the Muskrat Falls proposal and another one discusses the government’s overall plan to pay for Muskrat falls by boosting electricity rates in the province.

Maybe people are starting to catch on that this Muskrat Falls project is a money loser for the people of the province.

One other little tidbit to draw to your attention:  Friday’s post on Kathy Dunderdale possibly knowing about the JSS contract in advance (but staying silent) went up on Friday and got to Number Four for the week.

That tells you one thing and that isn;t good news for the Premier.  Friday’s usually a pretty dead day. If a Friday post goes into the Top 10, you know you have something people are very interested in reading.  That story might well carry over into next week.  Evidently this is a story that is too important to disappear in a cloud of foolishness about sexist attacks.

As for the traffic volume here at Bond Papers, it’s up again this week.

Take that for what it’s worth.

1. Mine is bigger than yours:  measuring the impact of public relations
2. Kremlinology 35:  Premier shows strain
3. Former hydro director points to another alternative to costly Muskrat Falls scheme
4. Did Kathy know about the JSS withdrawal in advance?
5. Invented story:  political appointee attacks government’s political opponent
6. Province settles expropriation with Enel, Sun Life and others
7. Making the people pay more for electricity
8. Fukushima kinda meltdown:  Collins cancer contract contradictions crumble credibility
9. Another cheaper, greener alternative to Muskrat Falls
10. Missouri lawyer adds to Collins cancer contract contradictions

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NDP: On the one hand… #elxn41

On the one hand the New Democrats want to remove HST from home heating fuel, including electricity.

But on the other hand they want to see Muskrat Falls go ahead.  That project would hammer people on fixed and low incomes in Newfoundland and Labrador by doubling their electricity prices.

At the same time, the federal New Democrats want to help Nova Scotia build a line to Newfoundland so they can import power from Muskrat Falls pretty much for free.

Of course, the NDP aren’t alone.  The federal Liberals and Conservatives also want to double electricity prices in Newfoundland and Labrador by supporting the Muskrat Falls megaproject scheme.

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Nalcor issues deceptive release linked to Muskrat Falls megaproject

The province’s energy company issued a deceptive news release on Thursday, apparently as part of its campaign to drive up electricity prices in advance of the Muskrat Falls megaproject.

The headline on the release states that:

Rising oil prices cause increase in Rate Stabilization Plan Adjustment for electricity consumers

The Telegram picked up the false headline and ran with it, even though, the first line of the release states that the company has merely filed an application for a rate increase.

So rising prices haven’t caused anything yet and they may not cause it at all.  The public utilities board must review the application and receive public comment before making a decision.  Many things could affect the application, including Nalcor’s has $10 million windfall from the Enel expropriation that they could apply before forcing customers to pay more for electricity.

That’s not the only misleading statement in the release, but it sure doesn’t look good when the headline is completely and utterly false to begin with.

The company also claims that “If we maintain the status quo of electricity generated through Bunker C oil at Holyrood,rates will continue to rise into the foreseeable future.”  That’s true but only if Nalcor neglects it responsibilities.  If the company promoted conservation, used its existing renewable resources to greater advantage and brought wind and new small hydro on stream, the price of electricity wouldn’t inevitably rise.

Nor will the cost rise if the price of oil drops.

Both of those things don’t draw the sort of connection implicit in the release between inevitable price increases and the idea that Muskrat Falls is a solution to the problem.

When a company has to rely on such deceptive claims, you can be sure it has no substantial arguments in favour of its proposal.

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Did Kathy know about JSS withdrawal in advance?

Premier Kathy Dunderdale sent the latest round of begging letters off to the federal party leaders on April 7, but one thing was curious by its absence. She tabled them in the House of Assembly but they aren’t online yet.

Sure there was the usual worn-out stuff stuff about federal presence, fisheries, the Hibernia shares and all Danny Williams-era list of grievances.  There’s a poke for yet more cash for Internet broadband and even a request for cash for childcare spaces.

The provincial government that spends more per person than any other one in Canada outside Alberta is looking for Ottawa to pay for stuff that is an exclusive provincial jurisdiction.

But missing from the letter sent on April 7 is any reference at all to the $35 billion naval shipbuilding contract.

Not a peep.

In a list of 14 or so specific topics.

Danny included the contract in his 2008 letter.

But Kathy Dunderdale did not even make a veiled reference to a contract that held phenomenal potential to keep Marystown working ships for years and years out beyond anything they have got currently in the pipeline.

That is really odd.

After all, Kathy Dunderdale took gigantic offense on Wednesday in the House of Assembly at any suggestion she did not understand the magnitude of the issue:

I take no lessons from you in terms of the Burin Peninsula about its communities, about its people, about its history, about its struggle, because I have been part of it all, I say to you.

That came after Kiewit Offshore shocked most of the people in the province when the story leaked out this week that the company didn’t want to pursue the $35 billion naval construction contract that the federal government is still trying to sort out. 

Shortlisted as one of five companies contending for the work, and yet the company brass said they just couldn’t come up with the professional help to put the bid together.  Didn’t feel they could pursue decades of steady work for their yard at Marystown on the Burin peninsula.  As CBC quoted a company spokesperson:

"The core Kiewit management and engineering folks that we would need for that proposal development just weren't plentiful enough to carry us through the process," said company spokesman Kent Grisham.

Big surprise to pretty well everyone earlier this week.

Fisheries minister Clyde Jackman, whose district the yard is in, told VOCM that he was a shock to him.  Here’s their short account in the event it gets disappeared from the Internet:

Fisheries Minister and the MHA for the district of Burin-Placentia West Clyde Jackman says this week's announcement by Kiewit Offshore Services to cancel its bid in Marystown for up to $35-billion worth of federal shipbuilding work came as a shock to him. He says he's as surprised by it as others, especially since the government has been working with Kiewit for the past number of years to obtain some of this work.

This is not a new project.  In fact, the whole thing is featured specifically in the provincial Conservatives’ 2007 election platform.  You can find it on the website now labelled dunderdale2011.ca:

• continue to work cooperatively with the Canadian North Atlantic Marine Partnership (CANMAP) bidding team, which includes Marystown’s Peter Kiewit and Sons, in a concerted effort to win the federal Joint Support Ship (JSS) contract for the Burin Peninsula.

This is a big project.

And, if Kathy Dunderdale’s reaction is any sign, this is a sensitive subject.

In the House of Assembly, she even tried the rather lame spin that it was wonderful the company was so flush with work that they could turn away $35 billion in long-term ship building.

But in a letter sent on April 7, Dunderdale did not mention it at all.

It sure looks like Kathy Dunderdale knew long before the rest of us that the company was bailing on the whole thing.

After all, why else would such an important project be missing from his stock letter looking for federal handouts during an election?

Knowing in advance would also explain why she has been trying on the histrionics about personal attacks rather than just answer the questions.

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Missouri lawyer adds to Collins’ cancer contract contradictions

While a lawyer working for the provincial government never met Danny Williams, that doesn’t solve the basic problem with justice minister Felix Collin’s contradictory statements about who hired Danny Williams’ former law firm to work a potentially very lucrative lawsuit against Big Tobacco.

Kenn McClain of Humphrey, Farrington and McClain told CBC news that he hired Roebothan, McKay, Marshall as a local firm to work on the suit because of their experience and other factors.

However, a February justice department news release claimed that the provincial government retained the local firm. implicit in the date of the release is that the firm started work on the file after Danny Williams left office in December.

In the House of Assembly on Monday, Collins said much the same thing:

when the time came to expedite this process and to file the statement of claim, the American company still did not have the certificate to practice so we had to engage in the firm they had retained to file their statement of claim.

Collins added, apparently inadvertently, that RMM had been working on the suit for five or six years, not the few weeks implicit in Collin’s earlier statements and the February news release.

So which is it? 

Collins’ version and the Missouri lawyer’s account just don’t match up at all.

 

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Making the people pay more for electricity

Take a gander at Hansard for Wednesday and you’ll see an interesting series of questions put to Shawn Skinner about the settlement in the Star Lake expropriation.

You can see pretty easily that the expropriation back in 2008 had nothing to do with getting back timber and water from an evil foreign company.

Nope.

The real story was about something else.

Shawn told the House, in all earnestness, that as a result of the 2008 expropriation of the Star Lake hydro-electric facility, the people of the Happy Province could now benefit from having 18 megawatts of electricity to meet their needs.

From that, Mr. Speaker, that generating station will put electricity into the system that will benefit the people in Newfoundland and Labrador.

We now have an asset that is a fairly new asset, about ten or twelve years old. It is an asset that for decades to come will be able to provide clean, renewable power for this Province that we will benefit from.

Skinner makes it sound like Star Lake will do something now that it wasn’t doing before.

Fact is that Enel and Abitibi developed Star Lake in the 1990s in response to a request for proposals issued by Newfoundland and Labrador Hydro. The provincial government’s electricity producer wanted to add some new renewable energy to its island supply that would help reduce the need for thermal generated stuff at Holyrood.

And that’s what Star Lake did.  It wasn’t supplying power to the Abitibi mill at Grand Falls-Windsor, as Abitibi’s other hydro generators did. Star Lake made the light bulbs glow in homes on the island.

Now, NL Hydro bought the power from Star Lake and turned around and sold it to Newfoundland Power who in urn retailed it to consumers.  Skinner put the annual cost of the power from Star Lake at $10 or $11 million annually.

Nalcor tried to buy Star Lake – as it turned out – before the expropriation but Abitibi apparently rebuffed the offer.  They preferred to sell the whole affair to Enel, their partner at the time.

In the end, Nalcor got Star Lake.  The cost came in at around $73 million on a facility that cost about $50 million to build.  Skinner says it was $60 million.  Okay.  Tomato.  Tomato.

What’s interesting here is not that the lovely people of the island now have electricity, it is the financials of the whole thing.  Follow that link right there  - LINK – and you will see a couple of curious things.

In early 2009, Danny Williams pretty well blew away any idea that the island needed power from some expensive project in Labrador as a result of the Vale smelter in Long Harbour.  As the Telegram reported:

Williams explained that the province didn't need the power from the Exploits River in order to accommodate the Long Harbour plant. He said 70 megawatts were freed up when the Stephenville paper mill closed, and an additional 54 megawatts of wind power has also been added to the grid.

Williams also said that:

the most important fact is that the province, through Nalcor Energy, a Crown corporation, will take full control of the power at the end of March. [emphasis added]

Why is that important, you ask?

Well, it has to do with those power purchase arrangements.  you see, Skinner mentioned those on Wednesday as a way of saying that the $73 million for Star Lake meant the provincial energy company wouldn’t have to pay that money out any longer.

True enough.

But how, asked Yvonne Jones, would Nalcor recover the cost of the settlement?

Why silly thing, by selling power to the lovely ratepayers of the island, sez Shawn:

We are going to be selling electricity into the provincial grid. That was the point I was trying to make. I apologize if I did not make it clearly enough for the Opposition House Leader. We are selling electricity into the provincial grid. The Public Utilities Board sets a price and the people who receive the electricity pay the price, Mr. Speaker.

Hands up anyone who has seen Nalcor head to the public utilities board to lower electricity rates now that they won’t have to shell out that $10 million annually.  Of course they haven’t and one would be exceedingly naive to expect them to do it.

By having a near total monopoly on electricity production in the province, Nalcor can now pocket the $10 million annually it used to pass along to Enel along with whatever margin it took on top.  Nice windfall.

In fact, if the loan is the only thing they are directly liable for and it is for a 25 year term, the actual annual cost to Nalcor is a trifling sum.  They are basically pocketing a gigantic profit on every megawatt from Star Lake they have generated since December 2008.

Not bad, eh?

Nalcor’s bottom line is that much fatter courtesy of the good people of the Happy province. People are already used to paying the higher rates so Nalcor can just keep on making them pay rather than pass any savings that Skinner was talking about on to consumers.  he was crowing about bigger profits for Nalcor, not a brighter future for the ratepayers of the island.

And when Muskrat does come along in 2017, well the same ratepayers keep on footing the bills for the government monopoly:  Nalcor’s entire plan for Muskrat Falls is based on profitability from provincial ratepayers alone.

Just like at Star Lake.

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Kremlinology 35: Premier shows strain

Being the premier of any province is a tough job.

It’s hard to appreciate just how tough the job is unless you’ve been there or have been pretty close to the person who has the job.

You can see the effect of the pressure in how fast people tend to age in office. That’s the basic point of a post from last October titled “The weight of office.” Danny Williams didn’t look unhealthy when he left office last fall but he was nowhere near the youthful looking fifty-odd year old fellow who started in the job in 2003.

Sometimes the strain of the job shows in other ways.  Like say, the meltdown Kathy Dunderdale had at the last part of Question Period on Wednesday.  The written record doesn’t show it, but take a look at the video.

Around the 44 minute mark, NDP leader Lorraine Michael starts on a series of questions that have barbs in them. There’s nothing in any of the questions that is the least bit unusual for a politician and there is nothing at all sexist in it.

In fact, odds are that Kathy Dunderdale herself has said something far more loathsome than the question perhaps in the heat of the moment on another occasion.

On this occasion, though, Dunderdale’s reaction is over-the-top.  She gets red-faced and her voice cracks a lot. She brings up the rather obviously cheesy partisan attack Dunderdale’s political appointee made on opposition leader Yvonne Jones over a jab Jones made at Dunderdale.

Dunderdale looked flustered.

Something is bothering her but the one thing we can be sure of it:  it wasn’t Lorraine’s pair of questions.

Well, not that alone.

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Fukushima kinda meltdown: Collins’ continuing cancer contract contradictions crumble credibility

Credit where credit is due correction:  see bottom of post

 

Justice minister Felix Collins is creating a gigantic mess.

In February, Collins announced that the provincial government had proclaimed the 2001 tobacco costs recovery act and would now get on with filing a lawsuit against Big Tobacco as a number of other states and provinces have done.

The very last sentence of the news release included this supposedly innocent bit of information:

The Provincial Government has retained the services of local law firm Roebothan McKay Marshall, who will be provided with foreign legal advice from Humphrey, Farrington and McClain of Independence, Missouri, experts in tobacco litigation.

Note the words:  “Provincial government has retained…”.

Only problem was no one outside of a handful of people in the provincial government had ever learned that Danny Williams’ former law firm had anything to do with the suit.

No tender call.

No expressions of interest.

Nothing.

The Official Opposition tried to find information through an access to information request.  As Opposition Leader Yvonne Jones put it in the House of Assembly on Monday, “there was no record of any cost-benefit analysis, no minutes of any meetings that discuss the issue, no internal letters, memos or emails, …”.

No records at all?

Sounds odd, but this is a government, after all, that wanted to charge someone 10 large for copies of public speeches.

Lots of work because someone had to redact the speeches they said.

Anyway, when asked about it, Collins put it this way: 

…when the time came to expedite this process and to file the statement of claim, the American company still did not have the certificate to practice so we had to engage in the firm they had retained to file their statement of claim. It is as simple as that, Mr. Speaker.

February news release was about filing the statement of claim.

Collins said on Monday that the provincial government hired the firm at that point.

Following the story, so far?

Another question and Collins added some more detail:

Mr. Speaker, there was provision in that agreement that that law firm would retain Newfoundland counsel to act on their behalf in this Province. Mr. Speaker, they engaged the services of Roebothan McKay Marshall to be their agent in this Province.

So it was the American law firm that hired the local firm.

Okay.

And then this bit:

Mr. Speaker, about a month ago when we filed our statement of claim, we had to engage with Roebothan McKay Marshall to do that for us because up to that point in time the American company did not have the certificate of practice.

So now it looks like the provincial government didn’t hire the firm, as the February release says.  That was the crowd from Missouri.

And then – in the words of second rate television reporters everywhere -  things started going horribly wrong for Felix.

Jones asked about the contract with Roebothan, McKay and Marshall.

Collins retorts with: 

the hon. the Leader of the Opposition knows full well the details because they were the ones who entered into the contract with the firm to start with.

Huh?

Suddenly a contract with a law firm that was supposedly signed within the past couple of months actually happened seven or eight years ago?

Looks like another Time Lord is born to go with the fish one and the old justice one.

Switch now to Tuesday when Jones took up the saga again.

Collins explains:

We had to revise that agreement in December to make the local counsel, the counsel for the purposes of expediting the process in the court, as I mentioned yesterday. That is the only revision, Mr. Speaker.

Whoa, Felix.

All this changing of agreements and there’s no record of any kind of it in the provincial government? 

Apparently so.

But something else changed in all this as well:  under the original deal, the Missouri firm took the lead, based on its experience.  They got the job as a result of a competitive process. These Americans took on a local firm on a subcontract, if you follow Collins’ line on Monday.

But then he dropped this zinger:

We had to revise the document to make the local firm the lead counsel so that they could expedite this process and bring the statement of claim into court.

“Make the local firm the lead counsel.”

Huge difference.

But Collins wasn’t done.  Having rattled his own argument with a series of earthquakes and a tsunami, he blew the reactor sky-high:

Roebothan McKay Marshall has been involved in this file for at least five, six years, at least five or six years…

Not five or six weeks, as you had on Monday or implicit in the February news release.

Five or six years.

Now just recall that somewhere in government there is enough information on all this so that someone could write a briefing note for Collins to read, but there wasn’t anything they’d release under an open records law.

But now the world learns that Danny’s old law firm started working on this file way back when Danny was in his first term in office.

Five or six years ago would make it around 2005 or 2006.  Tom Marshall – Danny’s west coast leadership campaign boss – was the justice minister.

Wow.

That eye-searing white light you see is Felix Collins’ credibility going up in a ball of nuclear flame.

It’s going to be interesting to see if the fireball engulfs anyone else inside or outside the administration.

- srbp -

Correction:  Blogging is not an exact science and sometimes even when you know the right answer you still get it wrong.

Full credit for the backstory on this belongs to Russell Wangersky at the Telegram.  Your humble e-scribbler humbly got it wrong when he attributed this to the opposition.

Wangersky’s your man and he laid it out back in February.

Mine is bigger than yours: measuring the impact of public relations

This originally appeared at The Persuasion Business.

Odd as it might sound, public relations professionals spend a chunk of time trying to measure things.

Aside from wondering if what you are doing is actually producing anything other than billings, clients want to see some tangible indication of results for communications programs.

Simple stuff - like saying the story got front page above the fold in a given newspaper - is a bit dated and must inevitably be coupled with other things to give a sense of whether or not the news release got the message across. Then again, just getting a call from a reporter can give a big clue that something is headed off the rails. If the first one appears to have been a success, then there's always the other story that spins off it because your answers to the first set of questions just didn't ring true. There's at least one of those stories working it's way through the news media in St. John's these days.

No one can forget survey research of some kind, but that too doesn't quite capture what some people are looking for. Increasingly, it is fraught with its own challenges, like just getting enough people to participate. Then there's the problem, as in the case of provincial politics in Newfoundland and Labrador where some publicly available polls are frequently goosed in one way or another by one of the clients.

Simply put, though, clients want some reliable indicator of what they get for their money. They want to see a return on investment (ROI) and they need to see that expressed in a way that is meaningful, let alone meaningful to them.

Practitioners have an interest in clients seeing the value of their work, especially in long-term program or in a crisis. There are people whose professional keysters I have pulled from the flames of a controversy and earned their gratitude and their friendship in return. Some people get it.

Yet as strange as it might seem, there are others who strolled over the Credibility Chasm blissfully unaware of how the work done on messaging, interview techniques, or just simply getting their heads focused actually helped them survive a crisis. These are the people who think it's all simple because the practitioner's skill and ability make it look simple.

Just to give an idea of how big an issue measurement is, take a gander at Katie Paine's blog which is dedicated entirely to research and evaluation for communications.

That's on top of KD Paine and Partners' company website.

Katie's written a book, Measuring success. True to the spirit of ecommerce, social marketing and all those other current trends, Katie's distributing the thing free-of-charge.This is definitely not a case of you get what you pay for. Take the time to download it and Katie will reward even the non-practitioner with some insights into what public relations is really all about.

There's also Cymfony, a company that does measurement as its entire book of business.

The Canadian Public Relations Society measurement committee - yes they even have one - developed a method they endorse that measures editorial coverage and ROI. You can find more on it at cprs.ca.

Measurement is just part of research and research is the starting point for any effective plan. Research is itself a speciality within the public relations field and the real treasure is finding people who can not only spit out data but also paint a coherent picture of what the data means. The links above will give you two treasures. Plenty can lay the mosaic individual tiles. Few can then step back and help you see see the profile of Abraham Lincoln.


Bond Papers is the product of research. All the bandwidth devoted to the provincial government positions and how Danny Williams operates comes from observation. Research forms the starting point of what your humble e-scribbler needs to give clients advice on how to approach an issue involving government. Knowing the environment also helps to know how to avoid government's radar screen, but that's a whole story in itself.

What turns up on your computer screen from Bond or at Persuasion Business is just the tip of the over-used iceberg analogy. Virals, poll goosing and all that are the PR equivalent of showing how to lift an ice cube with a piece of string and some salt. The real challenge comes in knowing how to shift the entire freakin' berg of attitudes and behaviour.

And knowing why you want to move the berg in the first place.

Bond Papers has its impact and there are ways to measure that. Does it reach the target audience?

Absolutely. The three separate traffic trackers reveal the size of the Bond daily audience, the number of people subscribing, the computers they run, the browsers they use, screen resolution, language, the pages they visit, the google search terms used and a host of other bits of detail.

In many cases, the trackers identify the Internet service provider handling the visit. I can't tell specifically which individuals are reading, but there is enough demographic information to know that the people who should be reading are reading Bond. There are a lot more who ought to be reading Bond's utterances, but for now the audience is the right size.

Do people like what they see?

Yes and no.

Someone invented e-mail so people can send a note of encouragement or, more often, a rocket taking exception to something. It all goes into the research hopper to guide future development. They must like what they read, though because they keep coming back in steady and larger numbers. By the way, scroll to the bottom of Bond Papers page and you can see at least one set of results from one tracker.

As a last way of telling the impact, consider the number of stories posted here originally or linked here that turn up on the evening news, on radio or in the papers a day or two later. Ask Tom Rideout about Bond Papers and Chief Justice Green's report. The story came up again today on CBC Radio's Crosstalk on Media panel.

After the "oh, gawrsh" moment of modesty, the mention gets tossed into the research hopper.

- srbp -

Province settles expropriation with Enel, Sun Life and others

Compensating a group of companies involved in the Star Lake affected by the Abitibi expropriation will wind up costing the taxpayers of this province more than the original project cost to build a decade ago.

Natural resources minister Shawn Skinner announced on Monday that provincial government will pay $32.8 million to Enel while Nalcor will assume responsibility for a $40 million loan from Sun Life and other companies.

That’s $72.8 million for a project that originally cost $51 million to build in 1998 according to Enel’s website:

The Star Lake Hydroelectric Project is an 18 MW remotely operated hydroelectric facility with a 173 million cubic meter capacity storage reservoir. The project provides electricity to Newfoundland’s integrated grid, which is sold to Newfoundland & Labrador Hydro.

Construction of Star Lake began in May 1997 and was completed in October 1998 for a total cost of $51 million (CAN).

From the earliest stages of the project, environmental considerations were considered in its development and have been instrumental in the technical design. The facility was conceived using environmentally friendly materials and equipment such as biodegradable hydraulic oil for its intake gate system and an oil-free hydrostatic bearing for the turbine unit. An underground penstock was also designed and implemented in order to avoid obstructing migration routes of the Buchans Plateau caribou herd.

An artificial brook trout incubation and rearing facility is also onsite. It is designed to produce up to 100,000 fingerlings (young fish). These fingerlings are intended for annual introduction to Star Lake to ensure that the lake's brook trout population is maintained.

Skinner is quoted in the news release as saying that this is a “a fair settlement and the most appropriate action for the province to take.”

The provincial government is still in talks with Fortis on compensation for that company on another project affected by the 2008 expropriation bill.

Nalcor has already assumed responsibility for a $59 million loan related to Fortis’ former hydro interests.

- srbp -

Former Hydro director points to another alternative to costly Muskrat Falls scheme

Add Edward Hearn, a former director of Newfoundland and Labrador Hydro to the growing list of people publicly questioning the proposed Muskrat Falls development.

In a letter to the editor of the Telegram, Hearn supports former Tory finance minister Dr. John Collins’ criticisms of the project.

Hearn says the project is liable to huge cost over-runs and that the resulting energy may be too costly to attract industrial development in the province.

Hearn suggests the province’s energy corporation should explore alternatives, including exercising taxation powers under the constitution.

While he doesn’t state it explicitly, Hearn is referring to the potential use of the public utilities board powers under the 1994 Electrical Power Control Act.  That Act was designed in part to allow the PUB to allocate power generated in the province for domestic use in a way that would not violate the terms of the 1961 Churchill Falls lease or the 1969 Churchill Falls power contract.

Under sections 8 and 9 of the EPCA, the public utilities board may order producers and transmitters to meet a power allocation ordered by the board.  The order would have to come as a result of an inquiry ordered under section 7:

(1)   Where a producer or a retailer believes that it may not be able to supply power sufficient to satisfy the current or anticipated power demands of its customers and prospective customers in accordance with the power policy set out in section 3, it may request the public utilities board to conduct an inquiry into the matter.

The Clyde Wells administration revised the Electrical Power Control Act in 1994.  The basis for the new Act was a report presented to the Brian Peckford administration in 1986 by Wells and other officials of Newfoundland Power at the time.  The Act as it was originally laid out applied equally to all electricity producers and transmitters in the province.

In answering a question from opposition leader Len Simms at the time, Wells said:

It 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.

What it does is establish the principle that the Public Utilities Board has to supervise the management of all hydroelectric power generated in the Province in such a manner as to meet first and foremost the needs of the people of this Province, and it sets guidelines as to what are the principles under which they can do it.

Wells introduced the bill at second reading on March 3 when he described the Act in detail.

- srbp -

Traffic with no misleading edits, April 4-8 2011

1. A new Sprung greenhouse in the wilds of Labrador
2. Invented story:  political appointee and CBC attack government’s political opponent
3. Another cheaper, greener alternative to Muskrat Falls
4. Numeracy problems
5. Mother Corp news geniuses are Nl electricity price gurus
6. Dunderdale admits to cheap power exports
7. PC Party exec voted to remove “Federal Conservative Party” from party constitution in 2008
8. Average NL family to pay $1000 extra per year for Muskrat Falls power: former PC finance minister
9. PC Party voted 180K for anti-Harper campaign in 2008
10. Getting their stories straight

- srbp -

In the court of public opinion (repost from The Persuasion Business)

These originally appeared in two parts on July 23 and July 24, 2007 at The Persuasion Business.

Part One

You don't have to be Conrad Black or Brian Mulroney to find yourself facing a legal battle and at the same time face a battle over your reputation in the court of public opinion.

Cases involving large companies, alleged injuries to members of the public, alleged wrongdoing by politicians or other prominent people usually attract news media attention. It's true in Chicago with Conrad Black and Los Angeles with OJ, Paris Hilton or the latest flavour of the moment.

Yet, it is equally true even in a relatively small place like Newfoundland and Labrador. Max Ruelokke, currently the head of the offshore regulatory board, found himself speaking with reporters on a legal action to resolve a dispute over his appointment to the job he currently holds. Ruelokke, a senior executive in the private sector and former public servant likely never expected to find himself at the centre of a political controversy but that's where he wound up.

These days, though, any case is liable to make the news. Even in appeals courts, cases that would normally draw yawns have earned news coverage either because there was something peculiar about the subject matter - a bizarre constitutional challenge on a fisheries violation, for example - or because one of the lawyers was particularly colourful in his arguments before the court.

Parties involved in a court proceeding - especially one that is likely to make news - must deal with the court of public opinion just as they deal with legal aspects of whatever matter they may face in a court of law. Reputations are at stake and as several high-profile cases - like Mulroney and Airbus - a successful co-ordination of public relations strategy with legal strategy can have a profound influence on the outcome.

It's not just a matter of having a lawyer make comments to a reporter. Most lawyers, even the ones who make a habit of granting interviews, run on whatever innate abilities they have. But being knowledgeable in the law and persuasive in a courtroom or in a boardroom doesn't necessarily guarantee success in the other, less formal and often more combative court. The rules are different. That's where counsel comes in. Just as no one with half a clue would walk into court without a lawyer, no one - including lawyers - should wander into the court of public opinion without experienced counsel.

Part Two

There are at least five reasons to deal with reporters and, in the process, co-ordinate action in both the court of law and the court of public opinion.

It's called litigation public relations.

1. Preserve the presumption of innocence.

This may be the cornerstone of our legal system, but often the first allegation made in public is the one that sticks.

Far too often people and organizations facing allegations will decline public comment. Just as silence is consent, silence in the news media usually implies agreement with whatever is being said about you.

Consider any of the high-profile cases currently taking place in Newfoundland and Labrador. Current and former members of the House of Assembly face allegations about improper spending of public funds. Charges have been laid against one - and he continues to decline comment of any kind - but all are supposed to be innocent until proven guilty.

Ask anyone about the case and see how many are willing to maintain the presumption of innocence after the onslaught of allegations from the Auditor General. In a court of law, allegations are subject to scrutiny and cross-examination. Weaknesses in an argument, faulty work, or in some instances a lack of credible evidence may win an acquittal.

Eventually.

In the meantime, those allegations are all that are available publicly. And every time there's another news story, the allegations get repeated sometimes without direct refutation.

For example, take the case of the former director of finance in the legislature who faces a civil action brought against him by the provincial government to recover money he is only - at this point - alleged to have inappropriately obtained or which he is alleged to have approved for others. His lawyer filed a statement of defence to the claim, until now the only comment of any substance made on his behalf and it is 13 months after the first allegations were made.

The CBC coverage of the filing is accurate and apparently thorough. But look at the amount of space devoted to the allegations in a story on the statement of defence.
The same could be said of a radiologist in Burin accused - merely accused - of misreading radiology reports. Find someone who hasn't heard of the case. Find someone who doesn't believe the guy is guilty of screwing up more than 6,000 reports.

Silence implies guilt.

2. Provide accurate, factual information about the case from the client's perspective, or as may be the case, correct inaccurate information.

The basis of solid legal argument and solid public relations argument is fact. Nothing persuades better than a consistent, logical and simple series of factual propositions or statements.

It isn't spin. Spin is misrepresentation, which is a slightly more polite word for a falsehood. Spin erodes credibility which undermines reputation which rots relationships.

In all cases, but especially when the allegations are emotionally charged, it may be important to defuse emotionalism with facts.

Sometimes allegations may involve inaccurate information or a news report may include inaccurate information from any source, including third parties.

The inaccuracy may come from a comment or it may result from the context, like the example of a health authority announcing the suspension of a radiologist immediately before an announcement of a public inquiry into breast cancer screening problems.

If the subject is complex or the issues involved are arcane or intricate - like how claims were processed and who approved them - important details will be omitted or simply misunderstood.

3. Provide reporters with background information not necessarily related to the case so that reporters may understand the legal proceedings.

Reporters are usually bright people but even reporters who have covered legal issues for years before may be unaware of important aspects of the process.

A key part of any public relations job is translating complex issues into accurate but understandable language. Legal cases are no different than engineering or mathematics. Keeping the level of comprehension high fights against inaccuracy and the resulting wrong impressions.

Lawyers and others may often need to provide background information to ensure reporters get the story right.

A few years ago, I dealt with reporters covering a high-profile set of charges. My client was not directly involved.  Reporters were obviously having some difficulty understanding the circumstances under which bail is granted in Canada. The lawyer representing the accused didn't provide any information - simple background - and when I referred the reporters to the two Crown prosecutors on the case, both lawyers declined any comment.

Reporters were evidently frustrated and they were directing questions anywhere, including in my direction. As a result, I gathered some information, consulted a couple of solid sources and gave them a bit of background. Doing that helped direct questions away from my client - where attention shouldn't have been focused anyway - and also helped reporters understand the circumstances that likely influenced the judge's eventual decision to grant bail with some fairly stringent conditions.

The sad part of that episode was that both the Law Society guidelines and guidelines for federally-appointed courts on media coverage of court proceedings all encourage exactly that type of comment by lawyers even those directly involved in litigation.

4. Know what to say and when; know what not to say and when not to say it.

As important as it is to say something, it may also be advisable to hold back some information for the courts or even to avoid making some comments at all.

Ask Conrad Black's attorneys about that last bit when it comes time to sentence the former media baron.

More likely though, it may be generally inappropriate to lay out in detail every aspect of a defence or a prosecution, of an allegation or a response, in public before making the comments in court. That's something lawyers will know.

But consider the alternative: the need for disclosure in the court of public opinion.

In their book, Buck up and suck up, James Carville and Paul Begalla recount the initial stages of Whitewater. Bill and Hilary Clinton - being lawyers - instinctively approached the allegations like lawyers. They hired lawyers.

And the lawyers did what lawyers do: they said nothing, admitted nothing. They advised against saying anything. The lawyers acted in what they perceived as the clients' best interest based on what works in their world. However, as Carville and Begala point out, "stonewalling is the biggest, brightest red flag you can wave to a reporter."

Closer to home, consider the piece of information withheld from the public on breast cancer screening, apparently on the advice of lawyers. It's easy to trace and entire public inquiry to the furor created by just that one earnest and well-intentioned piece of advice based on experience in one court but used in the wrong one.

Openness breeds confidence. Stonewalling breeds something else.

5. Everyone follows the news and vice versa.

We'd be naive if we didn't understand that everyone watches television, listens to the radio and reads the newspapers or surfs the Internet.

Stories can't be contained any more by the fact they happen in a town with only a single daily newspaper, a couple of radio news outlets and a couple of television stations. For anyone doing business outside his or her own community, odds are that media coverage will reach. In addition to dealing with immediate legal problems, widespread media coverage may make it hard to carry on business elsewhere.

Equally, while it may have been possible once to pull stakes and move to another province or even another country to start again after a legal disaster, those days are gone. What will drag along behind is not just the legal disaster, but virtually every comment made - accurate or wildly speculative - and if the person or business happens to gain some prominence in the new local, old ghosts may return to haunt.

In the immediate world of a litigation though, we'd be equally naive to believe that judges and prospective jurors don't follow the news and we'd be just silly to think they also don't start forming some opinions based on what they hear initially. They are human.

Rather than vacate the field to whatever allegations are made, presenting factual, accurate comment in news media can influence a case. (Making wild and silly comments can produce the opposite, but that's another war story)

Consider the case of Max Ruelokke. Appointed to chair the offshore regulatory board by a process established by federal-provincial agreement (the 1985 Atlantic Accord), Ruelokke faced a situation in which the provincial government delayed issuing the order in council making the appointment official.

As it turned out, Ruelokke had to sue the provincial government to get the job he won on merit, but in the process, he faced public criticism from the Premier. Ruelokke didn't seek the limelight, but he never shied away from it either. He accepted interview requests and presented himself calmly and consistently. He was impressive, even as the whole process dragged on for months.

Would it have made a difference if he kept his mouth shut? Hard to say. Ruelokke had a strong case anyway, one the judge hearing the case described as a "slam-dunk" even before final summations.

Had Ruelokke lost his temper in the face of some of the comments made against him, he may well have damaged his case. By maintaining a cool demeanour and dealing simply with the facts, Ruelokke may well have helped confirm that he was simply a professional executive entitled to the job he had been awarded in a fair process.

Ruelokke's calm persistence in the face of the Premier's bluster may also have helped persuade the Premier to abandon his futile legal fight.

One sign of the impact Ruelokke had? After the case was settled, the Premier whined about Ruelokke being "in everyone's face" throughout the process, although Ruelokke had appeared in interviews on only a handful of occasions.

Ruelokke's response was characteristic of his overall performance:

"I have not gone seeking the attention of the media. I have not failed to respond, however, to media on my views on what's happened," he said.

That's the essence of litigation public relations.

- srbp -

The Johnny Cab Minister (repost from The Persuasion Business)

This post originally appeared February 27, 2008 at The Persuasion Business:

Johnny Cab is a clever character in the 1990 movie Total Recall.  It's an automated taxi, voiced by veteran character actor Robert Picardo. You may recall him as the doctor on Star Trek: Voyager or as the witch Meg Mucklebones in the cult-hit Legend.

Taxis in the movie are entirely controlled by on-board computers.  To give them some semblance of normalcy, Johnny Cabs have robot drivers consisting of just a head and torso.  The computer is programmed with stock taxi driver lines like "Please state your destination" or "Helluva day."  If you don't ask a question to answer one that fits into the programming, the Johnny Cab will fall back on one of its stock lines.

You hear the same sort of thing with some people being interviewed by news media. Either they've had no media training, bad media training or the good training they had never took. No matter what the question, they refer back to their talking points or scripted lines. That's all the say.

Talking points are a standard feature of interview preparation.  A media relations officer will give three or four major points or ideas for the person being interviewed to make.  There should be some background or detail to expand on the point.  no set of talking points will ever be complete but good preparation means that someone being interviewed can make the points they want and nothing should be asked that comes as a surprise.

If the media person is doing his or her job, they already know the subject inside and out.  He can anticipate questions and provide sensible answers that convey meaningful information. The person being interviewed should also have more information;  he or she should be knowledgeable about the subject. If they aren't the interview will be incredible and the whole idea is to present credible, believable information from someone who knows what he or she is talking about.

After all, a media interview is a stock part of the persuasion business.  You want to gain support - not from the interviewer but from the audience -  and the way to do that is to present information in a way that people can relate to and understand.

A couple of times over the past week or so, provincial environment minister Charlene Johnson has wound up sounding like a Johnny Cab Minister.

In an interview with CBC's Ted Blades, Johnson was asked repeatedly over the course of a seven minute interview why her department didn't conduct regular structural inspections of 125 bridges over which thousands of people on the island pass ever week. She really never answered the question.  She fell back on her talking points, referring to a single bridge closure in 2006, or referring to her department's reliance on public complaints to know when a bridge needed some expert attention.

Now it's not like Blades was asking a bizarre or overly aggressive question.  Johnson herself said that public safety was paramount, that a human life was very important.  Blades' question gave Johnson a chance to give a concrete example or a convincing statement of how her department would put that sentiment into action.  After all, actions speak louder than words in the persuasion business.

Johnson could have easily said that the report from Transport Canada had caused her to re-examine the policy.  She and her officials would now work with the public works department and incorporate her hundred odd bridges into the others inspected annually by another department.

Her talking point  - her aide memoire - would have been something like this:  "Public safety is extremely important. It's so important that even though we had thought our policy was working, it isn't.  Now we'll be doing regular inspections."

And if hit with the question again or asked how they might have thought no inspections was a good idea, her response would be:  "You know, we all make decisions that make sense at the time but experience shows something else. So now we are inspecting these bridges and we'll do regular inspections by civil engineers to make sure the bridges are safe.  Public safety is that important."

But that's not what she had and, even though she is a cabinet minister responsible for running a department, she couldn't stray from the confines of her programming.  As a result,she sounded incredible, insincere, or at the very least laughable.

She did much the same thing in an interview on Wednesday with Chris O'Neill-Yates on the collapse of a paper recycling program in St. John's for want of $100,000 a year in operating cash.  A request to the provincial recycling agency was turned down even though, as CBC had earlier reported, the Multi-materials Stewardship Board had a surplus of $2.0 million last year.

Johnson couldn't commit to reconsidering the policy of not funding operating grants, even though she is the environment minister and recycling is a key part of government's waste diversion policy.  Nope.  better to send it to the dump, supposedly, as Johnson had earlier said when confronted with the issue.
And when asked about possibly reviewing the mandate of the decade-old recycling organization, Johnson talked about the board's "wonderful" work and the need to give news media a briefing on what "wonderful" work they were doing.

Yes.

Wonderful work.

Even though, as a result of an old policy, a recycling project has collapsed and tons of recyclables are now going to the dump instead of to the recycler where they are supposed to go as part of the government's waste diversion, management and reduction policy.

It doesn't make sense.

But it was in the talking points.

And when you are a Johnny Cab Minister, the programmed talking points are all you've got.

-srbp-

Invented story: political appointee and CBC attack government’s political opponent

While it isn’t clear if the provincial status of women council started the ruckus but there’s no doubt that political appointee Linda Ross is part of a manufactured attack on opposition leader Yvonne Jones.

CBC’s Here and Now broadcast a portion of a comment by Jones in the House of Assembly last week:

My next question is for the Premier, and I see she is all dressed up in her finest today, Mr. Speaker, to go down to see Stephen Harper this afternoon. Mr. Speaker, I should remind the Premier of the Little Red Riding Hood story… I should remind her of the Little Red Riding Hood story because I would not want the wolf to devour her because there are no woodsmen left to rescue you.

CBC then showed a portion of an interview with Linda Ross, president of the Provincial Advisory Council on the Status of Women PACSW), who criticized Jones for her supposedly sexist comments. 

Kathy Dunderdale was minister responsible for the status of women in 2009.  She issued the news release announcing Ross’ appointment to the provincial government position.

Only problem for both Ross and CBC is that the video clip left out the zinger in Jones’ political jab. The zinger is also the part that changes the tone and context of the remarks.

Dunderdale couldn’t count on any rescue, according to Jones:

…after you closed down all the pulp  and paper mills in Newfoundland and Labrador.

What a difference those extra words make.

Of course, CBC viewers would never know it since the CBC news editors clipped the quote in a rather interesting spot.

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Super-speedy Update:

Ross’ comments come from a letter to the editor in the Thursday Telegram. Ross’ letter selectively quoted the comments from Hansard.  CBC just followed her lead. That doesn’t relieve CBC editors of their responsibility for accuracy but it does identify clearly who torqued the story first.

And from the comments you’ll regret later department comes this bit from Dunderdale’s news release announcing Ross’ appointment:

I look forward to working with the president and board over the next three years.

Getting their stories straight

According to Premier Kathy Dunderdale:

Now, Mr. Speaker, we have recall power from the Upper Churchill that is now available for industrial use in Labrador.

That’s the power former finance minister John Collins suggested to bring to the island to help displace Holyrood.

According to Nalcor boss Ed Martin on CBC Radio Noon the very same day Dunderdale said that there is very little of that recall power that isn’t already used in Labrador.

What is left over is sold to Emera.

At a loss.

Numeracy problems

Factoid:  66% of adult Newfoundlanders and Labradorians lack the  numeracy skills (mathematics and logic) to function in modern society.

Premier Kathy Dunderdale told the legislature on Wednesday:

Unlike what is being proposed by the Leader of the Opposition, hooking up fifty or sixty ponds around this Province and costing us tens and tens and tens of millions…

Dunderdale also said that “to meet the power demand of the people of Newfoundland and Labrador in 2016, 2017, Muskrat Falls is the cheapest option to do that…”.

Dunderdale’s Muskrat Falls proposal will cost not tens and tens of millions or even hundreds and hundreds of millions.

What Kathy wants to do will cost thousands and thousands of millions.

Do the math.

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Another cheaper, greener alternative to Muskrat Falls

Former Progressive Conservative finance minister John Collins surprised a few people this past weekend by publicly criticizing the plan to double domestic electricity rates to build the Muskrat Falls megaproject.

Now while Premier Kathy Dunderdale may have blithely dismissed Collins on Monday, for those who know him or know of him, his public comments carry great weight.

CBC Radio Noon’s Ramona Deering interviewed Collins on Tuesday.  His comments are available as am mp3 file:  click here.

Collins hits on the major flaw in the entire scheme:  domestic ratepayers will consume only 40% of the Muskrat Falls output and that’s the entire basis on which the project will be made profitable.

The Dunderdale/Nalcor scheme is elegantly simple and chilling at the same time.  It doesn’t matter what actual demand is.  It doesn’t matter if export power is given away free.  The public utilities board is compelled by provincial law to set power rates that guarantee Nalcor’s financial stability and ensure it is profitable.

If electricity consumption goes down as a result of higher prices, Nalcor can simply go to the board and get another rate increase. If demand increases they can keep making money from higher rates.  And if they happen to export power and make a buck they can keep that as well and invest it in other projects.

Nalcor wins in every scenario and the only guaranteed losers in the scheme are the poor schmucks who will be forced – by law – to pay for the entire project.  This is, by the way, exactly the opposite of the policy that built Hydro-Quebec and that guided Newfoundland and Labrador Hydro before the current administration turned it into an energy franken-corp.

Collins systematically demolishes every argument offered in favour of the government scheme.

Then he adds a potential solution of his own:  use the 300 megawatts of power recalled from Churchill Falls and send it down a new line that connects the island to Labrador. 

That idea actually makes sense and it is one that Nalcor clearly hasn’t considered.  The provincial government could fund the line using the cash reserves it already has on hand and which it plans to use on the Muskrat project anyway.  The recall power – currently sold to Emera at a loss – plus some additional wind power, plus small hydro and the seized Abitibi assets would meet projected demand on the island.

The gigantic bonus is that it would not double electricity rates in the province.  Indeed, if Nalcor used oil cash to pay for the project, they wouldn’t need to borrow very much to get the job done. As a result the project could be profitable almost instantly and at far lower cost to consumers than the Muskrat project.

If Emera and Nalcor still wanted to build the line to Nova Scotia, the transmission infrastructure would allow development of new wind power projects primarily for export during the summer months when the island doesn’t use all the power produced here.  Since the cost of those projects is far lower than Muskrat, the export power would be competitive in the export market, something Dunderdale admitted yesterday that her project definitely isn’t.

Collin’s idea is cheaper than the Muskrat scheme.  Collin’s idea is also greener since it relies on an existing megaproject. and could support development of new wind power that Nalcor simply isn’t interested in, at all.

And the two dams on the Lower Churchill?

Develop them when there is a demand either domestic or export for the power.

There are plenty of lower cost alternatives to Muskrat Falls.

You just have to want to see them.

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Mother Corp news geniuses are NL electricity price gurus

No, this is not an April Fool’s joke almost a week late.

In answering a question on the source for government electricity price forecasts that are more than double actual experience recently, natural resources minister Shawn Skinner told the House of Assembly on Tuesday that CBC National News is his source for high-level energy intelligence:

…  The CBC National News did a survey; they project up to a 50 per cent increase in the electricity rates.

Mr. Speaker, the reason we are developing Muskrat Falls is to solve that problem, and by solving it we will be able to ensure that the rates will increase by 0.7 per cent per year as opposed to the 4 percent to 6 per cent that they are increasing now.

What Skinner didn’t say is that the recent CBC news report  he cited - dated March 30, 2011 -  actually includes the Muskrat Falls rates as part of its projection for greatly increased electricity prices by 2020.

In other words, CBC wasn’t forecasting.  The report was describing the result of the government’s proposal to double domestic electricity prices.

But wait.

It gets worse for Skinner, who seems to have misunderstood his briefing notes very seriously.

For starters, none of the story used actual demand forecasts for Newfoundland and Labrador based on its situation.  Skinner basically used possible events in Alberta  - and other places - as justification for actual decisions in this province taken before the CBC story even hit the Internet.

Then realise that the increase in electricity rates over the next decade CBC is talking about isn’t actually a forecast.  They are really just suggesting a possible  conclusion based on some of the prices being paid to producers in Ontario and other places in central Canada for some new technologies.  Even the language is obviously conditional:

…it seems to mean inexorable price hikes…

Seems to mean?

You hope someone would say “will definitely mean” before Skinner signed on to a guaranteed doubling of electricity prices for his constituents, as a minimum.  Evidently he didn’t notice the obvious problems related in the story by people on fixed incomes when faced with electricity price increases of the magnitude he is obviously comfortable with. Hint:  Perhaps someone should point out the province’s own demographic forecasts for the Minister.

So yeah, maybe, theoretically prices might skyrocket if you can judge by the biogas and other similar experimental or relatively small-scale projects CBC cited. Unfortunately their speculation is pretty much shite: they didn’t do a detailed analysis of  the total energy generating mix and what might actually happen to prices if consumption rises 23% in the next decade, as forecast by the National Energy Board.

Talk about faulty reasoning.

Even that is not the end of it, sadly.

That 35% increase in prices over the past five years or “recent years” that Skinner and Premier Kathy Dunderdale like to talk about?

Turns out it is actually a 20 year average rate of change adjusted for inflation:

Altogether, it seems to mean inexorable price hikes for a commodity that's already 30 per cent more expensive than in 1990, after adjusting for inflation.

So if you were really forecasting for the next decade based on the preceding two decades, you might want to try a 15% increase adjusted for inflation. Math geniuses will pretty quickly tell if that works out to be a 50% increase unadjusted for inflation or any other way.

And if all of that isn’t bad news consider that the La Romaine project in Quebec will produce electricity at a cost of less than half the Muskrat Falls total of 14.3 cents per kilowatt hour.  Hydro-Quebec will get its power from La Romaine for 6.4 cents per kwh.  That project is also more cost effective than Muskrat Falls, producing 1550 MW compared to the Nalcor project’s 824 MW and at about the same price ($6.2 to $6.5 billion forecast).

So if you take the province’s natural resources minister at his word, he is relying on media speculation to make serious decisions about the province’s future.

Talk about three guys and a magic eight ball.

You simply cannot make this stuff up.

As a last point, CBC can’t even get its basic facts straight on electricity generation in Newfoundland and Labrador.

The chart of current and forecast projects:

• includes Gull Island even though that project has been shelved for the foreseeable future;
• omits the Menihek power plant that sells electricity from Labrador into Quebec;
• omits an 18 MW hydro project at Star Lake seized by the provincial government in 2008; and,
• still shows Fortis as a co-owner of a power project on the Exploits even though that the province seized that as well in 2008 and turned it over to Nalcor. According to the company’s most recent annual report, Fortis is still in negotiations with the provincial government on compensation for the seizure of its assets.

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