Fortis, Gaz Metro in war for Vermont utility

Newfoundland and Labrador-based Fortis (CA: FTS)  isn’t alone in its bid to buy Central Vermont Public Service.

The CVPS board announced on June 27 that the company has authorized talks with Gaz Metro on Gaz Metro’s unsolicited acquisition offer.  Gaz Metro is offering $35.25 per share.  That’s slightly better than Fortis offer of $35.10 per share, which the CVPS board accepted in late May.

CVPS is the largest electrical utility in Vermont.

Vermont Governor Pete Shumlin thinks the Gaz Metro offer is better for the state given that Gaz Metro already owns an electric utility and a natural gas utility in the state.

Fortis isn’t happy with the unsolicited offer from a rival. The company wouldn’t comment on the story earlier in June with Canadian media but  Vermont Public Radio quotes Fortis chief financial officer Barry Perry as saying: 

"It is a hostile bid. In the utility sector, hostile bids are not normal.  They're rare, in fact.  So, usually you end up negotiating a transaction, the board selects a party and that's the end of it.    The party is then required to get it approved by the regulator and the shareholders of the company. In this case GMP did decide to go hostile. It is a little unusual."

Under the agreement with Fortis, CVPS could wind up paying Fortis US$19 million if the deal with the company falls through.

If it is successful, Gaz Metro would create a new utility that includes a share of the state’s transmission assets.  VPR reported that as part of the merger, Gaz Metro would create a public trust comprising 30% of the shares in the state transmission utility. The trust would reportedly generate $1.0 million a year in income.

 

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The price of a loan guarantee

Ontario is planning to build two new nuclear reactors to meet the province’s energy needs in the near future and finance minister Dwight Duncan signalled on Tuesday that the Ontario government will be looking for help from the federal government.

The example he cited? 

You guessed it:  Muskrat Falls.

“They are certainly backstopping Newfoundland in exporting power to the United States,” he said. “Now I guess the question to them will become as we move forward, what are they going to do for Ontario?”

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Wealth transfer

As nottawa noted on Tuesday, the net effect of a provincial tax cut on electricity and a rate hike for the province’s Crown energy company isn’t what might appear at first glance.

First, there’s not going to be a drop in cost for consumers, as some might have thought.  He based the calculations on a monthly bill of $300 per month before taxes:

$339.26 is greater than $339. The government isn't giving you a discount this October at all. In fact, your monthly bill is actually going up. So much for "reduc(ing) the cost of living for all consumers". And on a year-over-year basis, they're sticking it to you slightly more, because the increased rates take effect this month, while the as-yet-imagined HST discount won't start until October.

Second,

all of those millions of dollars … that are going "back" into the hands of taxpayers represent millions less on the government's books in the form of tax revenue. But an equivalent or slightly higher amount is now flowing from rate payers into NALCOR's coffers, where it can be safely spent with far less public scrutiny. (Like this, for example).

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Taken up by the ferries

With a tender call to build six more ferries,the provincial government is still not finished sorting out problems with its last ferry contract.

Earlier this year, Kiewit Marystown delivered two ferries originally contracted in 2008  at a cost of $50.5 million.  They were supposed to be delivered in 2009 and 2010. The final delivery price was $27.5 million each.

The issue of cost-over-runs on the contract cropped up last week in an interview human resources minister Darin King gave to CBC’s David Cochrane.  King also said the provincial government has been trying to sort out construction of a third ferry at Kiewit but the ideas was hung up over cost escalations. 

According to the 2008 news release, the provincial government was supposed to purchase the engine for a third ferry in 2008 at a cost of $2.0 million. They were also supposed to start design work on a fourth, larger ferry.

The ferry project dates back to 2005.  When the provincial government announced the Kiewit deal a quarter of the work was supposed to go to a yard in Clarenville. Before work got underway, the Clarenville shipyard dropped out of the deal.

If the figures in provincial government news releases are accurate, the two ferries came in only 10% over budget. That’s actually low compared to cost over-runs on other provincial government tenders.

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Gouging consumers on gas

So the gas pumps in the province are prone to error in favour of retailers, as CBC reports.

Well, sort of.

We don’t know how many gas pumps there are in the province but CBC reports that of the 962 examined over a two year period, nine percent didn’t pump accurately.

Of the nine percent, 56% erred in favour of the retailer.  Logically, the remaining  44% didn’t pump the right amount but the consumer benefited.

But do the math on that to understand if you had a “decent chance” of not getting the right gas amount as the CBC story asserts. 

Fifty-six percent of nine percent of 962 works out to be 48.

48 out of 962.

That works out to be 4.9%.

So at any time you are buying gas, about five percent of the pumps across the province could be reading incorrectly in favour of the retailer.

Four percent of the pumps will make mistakes in your favour.

Gasoline watchdog George Murphy thinks that federal government officials should inspect every gas pump in the province twice a year in order to stop this. Taxpayers would bear the full freight for that, most likely.

Seems like a bit of overkill given the number of errors is relative small.

If you want to stop gouging consumers, it would be far easier and far less costly to consumers if we simply got rid of  the gas price fixing scheme the provincial government runs.  People like George Murphy agitated for that in order to protect consumers.

As it turned out, the government price fixing scheme gouges the people pumping gas into their cars 100% of the time.  The only people who benefit from it are gasoline retailers and the provincial government and they benefit from the price fixing scheme 100% of the time.

Five percent chance you could lose some money versus 100% chance of getting hosed.

There’s gouging and then there’s gouging, obviously.

That’s math anyone can follow.

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Dundernomics 101: Dazed and confused

There’s a Tellytorial  - editorial at the Telly – that is worth reading if you missed it already.

It’s the one from last Saturday that began by noting that the Conservatives are ploughing ahead with the Muskrat Falls project because they got a mandate for it in 2007.

Missed that little gem from four years ago, didn’t you?  As the Telegram notes, you surely aren’t alone.

Then there’s the bit where Premier Kathy Dunderdale says she’s confident an external “audit” and the public utilities board will back up claims that she and the Nalcor brass are making about the project.  No surprise there:  the audit isn’t really an audit, the utilities board has been given basically set up to deliver what Nalcor wants it to deliver and neither will examine the assumptions on which Dunderdale and her predecessor – Danny Williams – gave the green light for ramping up the public debt.  The fix, as they say, is in.

But the part of the editorial likely to really make you uncomfortable is the bit where the Telegram editorialist notes that Dunderdale is full steam ahead on the megadebt project yet at the same time:

in one part of the meeting, Dunderdale said governments across the country are getting stung by all manner of projects coming in vastly over budget — often by as much as a third or a half again as much as original budgets had outlined. At the same time, she argued that a contingency plan built into the Muskrat Falls project would handle any overages, even though the contingency set aside for the project is only 15 per cent of the project’s cost.

That’s pretty much what your humble e-scribbler has been saying about these sorts of projects in other parts of the world and about the administration Dunderdale’s been a part of since 2003.

The current provincial administration is routinely over budget and behind schedule on everything it does. The latest example is a plan to build a bunch of new ferries for the provincial coastal service. Already years behind schedule, the current administration torqued everything related to the launch of the first two hulls of a planned series to update the aged fleet. Turns out, though, that the project is not only years behind schedule, it is also significantly over budget such that it is causing problems for the remainder of the program.  People didn’t find this out – by the way – until human resources minister Darin King spoke to CBC’s David Cochrane last week about  labour problems at the Marystown shipyard.

Flip back to the Muskrat project though.

Current estimate for the project is $6.2 billion.  Increase that by 50%,  the likely over-run given Dunderdale’s comments to the editorial and experience with the current Conservative administration. You are already at about $10 billion and that’s roughly the size of the provincial government’s current liabilities.

Consider, though that the estimate of $6.2 billion isn’t realistic in the first place.  Nalcor and the provincial government are basically citing figures for 2011 that are exactly the same as ones first floated in the late 1990s.  Put a bit of inflation on that number at you’d be at $10 billion or more as a realistic starting figure.

Now add 50% and see what you get.

Scary, isn’t it?

When you are done with that and your breathing returns to normal, notice that Kathy Dunderdale acknowledged to the Telegram editorial board that these sorts of projects tend to go over-budget by up to 50%.  Your humble e-scribbler has been saying that for years.  others have said the same thing.

So… the Premier and critics of the project agree on both the likelihood of over-runs and how bad they’ll be.

Then recall this Dunderdale quote from a recent speech:

May I suggest you look at the motives of the few vocal naysayers who are working so hard to find flaws in what is easily one of the most exciting developments in North America.

Maybe you should.

And while you are at it, look at Dunderdale’s motives in pushing the megadebt project despite the very obvious and massive flaws in her proposal that even she acknowledges.

If you look at both, it should be pretty easily to see who is dazed and confused and who thinks there’s a better deal waiting to be had than the one the Premier and her supporters are flogging.

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The federal government is out to kill you

If you want an example of the sorts of irresponsible, partisan rhetoric that usually gets wound up in some types of issues in this province check out a post at a local blog.

It’s titled in an appropriately hysterical way, given the subsequent comments:

“They will not be happy until we are as extinct as Northern Cod.”

Yes folks, the local Quisling hunter is back with his claim that the federal government is on a campaign of genocide against the people of Newfoundland and Labrador.

Normally your humble e-scribbler would ignore this sort of garbage but it is such a fine example of the sort of political myths that Tim Powers complained about recently that it’s worth singling out.  And what’s more, both Tim and the Quisling Hunter share a common political hero who, not surprisingly, also loved political fairy tales.

These days in Newfoundland and Labrador, it’s par for the course:  no facts to make the case?  Make ‘em up, instead.

According to the post,

The decision to close regional sub-bases and consolidate has been in the works for nearly twenty years, just as the federal government has been automating and decommissioning light houses for the past thirty years.

He then cites a 1996 crash at Stephenville airport as evidence:

In it's findings, the Transportation Safety Board found that the St. John's FSS operator did not have the actual Stephenville wind direction and speed. The wind velocity he passed to the crew was from the latest Stephenville observation and was 040° at 17 knots, within the tailwind landing limitations of the aircraft. The actual Stephenville wind of 040° magnetic at 20 knots with gusts to 22 knots exceeded the aircraft's maximum allowable tailwind component for landing.

Had there been local air radio and weather staff, those pilots would have had accurate up to date information.

They might very well be alive today.

My point is that abandoning regional facilities like St. John's can, and in fact, has cost lives in the past.

And then the finish:

Emotional, partisan rhetoric is not going to force Ottawa mandarins to change their minds.  The reality of the dangerous conditions that our men and women toil in to retrieve fish, deliver and pump oil, and transport goods is as foreign to the bureaucrats on Wellington Street as our dialects and unique phrases.

This closure is just the latest evidence of a  continued lack of understanding and sensitivity in official Ottawa towards the economic, social, and safety needs of this province.

They will not be happy until each and every one of us are as extinct as the Northern Cod.

Big problem? 

Well aside from the oxymoronic appeal to emotional, partisan rhetoric right after acknowledging that it won’t work on bureaucrats, that is.

The big problem is that Transportation Safety Board report on that crash investigation didn’t finger local air, weather and radio staff.  Nor did it give any basis for getting to that conclusion.

You can find the report on line at the Transportation Safety Board website.  It is easy to read;  TSB reports are in plain English.

Notice that there is no link to the report in the post.  That should be your first clue that something is amiss. take a look at the description of the tailwind information, though and that’s where things go off.  The TSB found that the tailwind given by the St. John’s air controller worked out to 10 knots.  That’s the actual recommended limit for that aircraft type.  The observed conditions on the ground at the time – according to the TSB  - worked out to 12 knots. 

That’s still 20% beyond the maximum tailwind for the type but at no point does the TSB connect the difference in weather conditions – reported versus actual – as being a factor in the crash. The claim the pilots might have been alive had someone been in the tower is pure fiction.

You’d see that by reading the whole report.  Investigators found the aircraft in the middle of the airfield, upside down and with its landing gear retracted.  It appears the aircraft struck the runway while the pilot tried to abort the landing and go around for another try.  The TSB notes there was no explanation why the pilot tried to land with a tailwind at the aircraft’s limits while he could have approached with a modest headwind.

What you have here is someone taking a case and bending it to fit the desired outcome.  Aside from the date, the aircraft type and the fact it crashed, pretty well everything else the post author claims about the mishap is just wrong.  The conclusions are equally out-to-lunch.

The post fits, though, with all the wild claims made about the shifting of the jobs from this particular centre to Halifax where the Joint Rescue Co-ordination Centre has been running for years.  It also sits alongside the host of other mistaken beliefs, whether it is about incomprehensible dialects, bizarre place names,  the supposed closure of coast guard operations in the province full stop or that federal bureaucrats are out to commit genocide in Newfoundland and Labrador.

That’s the thing about political myths:  rationality has nothing to do with it.  In fact, rationality is the enemy of a political argument built on fables, fantasy and fairy tales.

But that’s what you get in Newfoundland and Labrador these days.

That and the myth mongers wondering why no one outside the province takes them seriously when they make all these improbably claims.

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Get me re-write!

The headline on the story is catchy:

Inquiry needed on centre closure:  advocate

At the start of second paragraph you find out that the advocate the headline writer is referring to is Merv Wiseman.  He is described as “Long-time Canadian Coast Guard employee…”.

But Merv isn’t just an impartial bystander in this little drama and he is a wee bit more than an “advocate”.

Wiseman is the shop steward for the union local representing the workers whose jobs are being moved to Halifax. You don’t find that little tidbit until paragraph three. 

In other media reports, Merv has been identified as one of the people affected by the coast guard decision.

Here’s the existing fourth paragraph and the logic Wiseman uses in calling for a provincial public inquiry:

"We've had provincial inquiries, provincial and judicial inquiries before because of marine tragedies. Here's an opportunity for the government now to show some real leadership."

Is the CBC story accurate?  Not by a long shot. Of course, if they had described Wiseman accurately, his claim would be a lot harder to sustain.  Try this on for size.

Instead of “advocate” in the headline, substitute “union rep”.

And instead of the existing front end of the story, try this:

The union representative  for coast guard workers whose jobs are being relocated to Halifax wants the provincial government to launch a public inquiry into the implications of the federal government’s decision.

Then drop in the existing third and fourth paragraphs.

Big difference in the story, wouldn’t you agree?

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A room with a view of the pork barrel

The provincial ambassador’s office in Ottawa costs the better part of a half million a year to run, hasn’t had an ambassador in it for the better part of the past two years and so Premier Kathy Dunderdale will keep it open because it is so effective.

The office serves a great purpose when it’s functioning the way that it should,” she told a Telegram editorial board [last] Wednesday. “And it’s important to me that we maintain that.”

The thing is the office hasn’t served any purpose except to demonstrate how completely useless it is or how crap Premier’s have been in finding people to occupy the sinecure.

The first incumbent -  former Liberal cabinet minister, former wannabe Conservative candidate, former Liberal candidate and soon-to-be-former radio talk show host Bill Rowe – stayed in the job for about half a year and accomplished exactly squat before packing it in and coming back home.

Rowe – who left politics in the late 1970s after a political scandal about leaked police reports – wrote about his complete waste of tax money in Ottawa in a book that became a national best seller last year.  The book is a litany of slapstick moments like making taxpayer’s foot the bill for shipping his used snow-tires to the nation’s capital or his inability to get Danny Williams’ political and public service bureaucracy to cough up a Blackberry and a laptop for weeks on end.

Your humble e-scribbler has described the book as an insider’s account of events the author wasn’t inside the room for.

As Rowe documents, Danny Williams offered Rowe a key position in the new administration before the 2003 general election. Rowe stayed in his job on-air during the election and took up his ambassadorial appointment as Williams’ personal representative to Hy’s early in 2004.

The second incumbent  - former Memorial University professor John Fitzgerald  - reportedly spent most of his time not meeting with federal officials, that is when he wasn’t hanging out in the Commons visitors gallery.  His tenure in Ottawa coincided with Danny' Williams’ endless feuds with Ottawa for something or other and after a certain point he reportedly had a hard time getting in to see anyone. Regular readers will recall him as Our Man in a Blue Line Cab.

Fitzgerald quietly left Ottawa when his contract ended.  Williams gave him another contract in St. John’s in the classic patronage holding pen of the protocol office.  His official title is “special advisor.”

Before Bill Rowe, the provincial government never maintained an office in Ottawa.  The job of dealing with the federal government fell to officials and ministers, including the Premier.  And more often than not over the past 30 years there has been an office called Intergovernmental Affairs intended to deal specifically with – you guessed it – relations between and among governments in Canada.

So there you have it.  The office has been vacant for more time than it’s been filled, a point labradore makes succinctly.  And when it has been occupied, the incumbents apparently accomplished nothing.

And yet the current Premier wants to keep spending money on an office that has never worked because it is great when it works.

Says more about Kathy Dunderdale’s judgement than anything else, apparently.

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Payback is a mother: Conservative edition

“…rationality has little to do with political myth making…”

Tim Powers, Conservative backroom guy and Ottawa lobbyist, wrote that in a recent post over at the blog space he has alongside Rob Silver at the Globe and Mail.

He was venting some frustration over some political smoke being blown at his friend the Prime Minister over a handful of jobs at a call centre that the federal government wants to shift from St. John’s to Halifax. 

Political opponents of the federal Tories have tried to make the debate about the Prime Minister and their manufactured view that he has some sort of disdain for the province.

Political myths have absolutely nothing to do with rationality, facts or any other sign of higher mental function that is supposed to distinguish humans from pond slime.

We are not talking of the rather harmless fairy tales like chopping down cherry trees.  We are talking about beliefs about people or events that are simply not true.

Tim is right:  there are a bunch of people who would have you believe that these 12 jobs are yet another sign that Stephen Harper and his band of knuckle draggers just don’t understand [insert the topic here]. They will screw Newfoundland (and Labrador) sometimes out of malice, sometimes out of stupidity.  But those nasty Conservatives will screw “us”

There is no evidence for any of it, of course.  But that doesn’t matter.  political myths, as Tim noted, have nothing to do with rationality.   Still, that hasn’t stopped a few thousand people from believing it as surely as they believe in sunshine.

A lot of people in Newfoundland (and Labrador) believe Stephen Harper is some sort of demon merely because Danny Williams told them so a couple of years ago. That idea was at the heart of his now legendary “Anything but Conservative” campaign during the 2008 federal election.

To savour the truly dry cosmic humour in that,one has to know a bit of back-story. Danny Williams’ is a political legend.  That is, so much of what people think about him and what they believe he accomplished as a ,politician is simply a matter of myth.  As your humble e-scribbler noted when the old guy skedaddled out of politics last December, the tributes to him praised him for :

• things he never did;
• things other people did but credited to Danny
• things that never happened, and,
• stuff he did but that still had to roll along enough so people could see if they were good, bad or indifferent.

And that was all they included.

Take the Muskrat Falls deal that Tim mentions in that same column.  Danny grabbed a bunch of people together and had them scribble names on an agreement to keep talking about maybe coming up with a deal.  He didn’t actually sign the final deal that will actually see a couple of dam and a bunch of hydro lines built in Labrador.  But that hasn’t stopped reporters from praising it then and now even though it really doesn’t exist at the moment beyond a lot of talking.

Tim helped to bolster the Danny myth  - or a fairy tale Danny was spreading - on more than one occasion.  And that, as they say, is really what really makes Tim’s post a delicious display of Karma in action.  This lack of rationality…

unfortunately does a great disservice to the serious discussion that should be taking place about marine rescue co-ordination on the East Coast.

Indeed it does, Tim.  And on everything from the provincial government’s sorry fiscal state to the Muskrat falls debt project, the people of Newfoundland and Labrador have been done serious harm by the myths foisted on them by Powers and his  political friends in the province.

The danger for the Conservatives is that the myth is becoming the symbol, which could present major challenges for the federal government with the province in future.

Absolutely true, again, Tim Powers, but the verb tense is wrong.  Danny the Myth cemented the symbol years ago. What we are seeing today is just a sort of cosmic payback being visited on the Conservatives who after 2001 in this province never met a myth they wouldn’t monger.

Karma is a bitch.

Looks good on ‘em.

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Fortis fighting two tin-pot bureaucracies

Newfoundland and Labrador based Fortis is seeking compensation for electricity production assets seized by two governments half a continent apart.

The company is seeking payment for its interest in a Belize electricity company seized this week by the government of that tiny central American country.

It is still locked in talks with the Government of Newfoundland and Labrador for the 2008 seizure of its assets in that Canadian province.

Odds are Belize will settle up first.

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Saturday Snickerfest

After her communion scrum, Premier Kathy Dunderdale led reporters in a brief prayer in which she asked for divine help to get her out of the political quagmire she’d made for herself over the call centre jobs.

 

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Traffic that transcends the overpass

1. Well, did she know in advance?
2. Minister Chickenshit
3. Kremlinology 36:  Thinking with your ass
4. Will one of them change parties?
5. Like Momma says, stupid is…
6. Penis Envy
7. Belize dannys Fortis
8. Making the most of our electricity resources – Part I:  Electricity Reform
9. US has surplus electricity
10. Dunderdale dunder-fail on SAR call centre

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Phriday Photo Phunny

Reporters took the time to ask her a few questions as a confused Premier Kathy Dunderdale lined up for communion outside the House of Assembly.

Got a better caption?  Send it along.

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Like Momma says, stupid is…

It takes an especially keen political genius to take someone else’s political problem and make it yours.

It takes an even rarer form of political genius to take a guaranteed loser issue and stake your entire political future to it with loopy rhetoric.

But that is exactly what Kathy Dunderdale has done with a decision by the federal Conservatives to shift 12 jobs at a search and rescue call centre from St. John’s to Halifax.

The Premier spent almost 19 minutes today scrumming with reporters to discuss a 15 to 20 minute telephone conversation she had with Prime Minister Stephen Harper about the transfer.

You can see the raw video of the scrum embedded in CBC’s online story.

Dunderdale told reporters that the “full force” of the provincial government will now be brought to bear to get the Prime Minister and his cabinet to change their minds.  She said she has tasked two cabinet ministers and their senior staff to take “every opportunity” to pursue the issue with their federal counterparts over the next year.  In addition, Dunderdale said she is also going to be doing the same thing, spending every available minute of the next year fighting to keep the 12 jobs in the province.

Now while Dunderdale acknowledges that she didn’t make this decision, she has decided to make this the singularly most important issue of her administration.  In effect, she is staking her political reputation on this single issue.

And for that reason, she has now taken what could be Stephen Harper’s problem and made it her own.  Dunderdale appears to be doing this for the same reason that Roger Grimes tried to foment political rows with the federal government before 2003:  she has the naive understanding that people will park their brains and back a Premier who is fighting a foreign oppression. 

What’s worse she seems to think this will bolster her political standing in rural areas.  That the sense you get when you hear Dunderdale tell reporters that “the vast majority of the people working in this province” making their living on the water.

That simply isn’t true.

Dunderdale should know and you can bet the Prime Minister and his officials know it as well.

But consider for a minute that Dunderdale has effectively made this the single issue that will occupy – using her own words – every minute of her time over the next year.

This trumps fishery reform.

It trumps talks to implement the Wells inquiry report recommendations into offshore safety.  Just think about that for a second when Dunderdale says “safety trumps all.”

And it trumps her precious loan guarantee for Muskrat Falls.

How did she get into this mess, aside from the naive belief about local politics?  Well, it’s the sort of ass-thinking that led Dunderdale to offer to pay the federal government to keep the jobs in the province.

That’s despite a point Dunderdale acknowledged during the scrum, namely that the federal government has been accused of offloading federal responsibilities for years.

It’s despite the fact that when pushed on it, Dunderdale had to admit that taking over the role 12 months from now is a big, complex issue that needs further study.

And that’s despite the fact that this is clearly a federal responsibility. 

Think about it:  if there’s a tragedy that can be linked to the decision, Harper and his people will wear it. That risk alone would cause politicians to run from the decision. odds are that if they’ve already ruled out the idea that where a phone gets answered won’t materially change the time it takes a helicopter to fly or for a ship to steam to a rescue site.

And if you look at the comments coming from this province since the feds made the decision, no one has yet pointed to how this decision would threaten lives.  Even Dunderdale hasn’t been able to explain simply and clearly how this puts lives at risk.

The best they’ve come up with is the rather silly claim that mainlanders can’t understand our incomprehensible dialect or that mainlanders might be too stupid or irresponsible to know which North Harbour someone might be talking about.

If a mainlander relied on such racist stereotypes of dumb newfies, we’d be manning the barricades and running up the battle flags. Why should we treat it any differently when locals use the same garbage?

Both of these arguments rely on preposterous claims. If you are to believe them, search and rescue professionals who already routinely deal with people from this province cannot understand their impenetrable accents or be bothered to learn what towns or headlands are where on the map.

If this was actually the case, then we could turn the former AbitibiBowater mill at Grand Falls-Windsor into a coffin factory the work would be that steady. Not only would the locals be drowning in droves but  so too would the Chinese, Filipinos, Bulgarians, Japanese, Russians, Portuguese and a world of other seafarers who don’t even speak English in the first place, let alone who have a local dialect and an accent to boot. and who pass our shores daily.

And when Dunderdale adds the laughable claim about the vast majority working on the water – check the labour stats – then you know that there is no comment too silly for Dunderdale to make.

Where these 12 jobs get done might be an important issue.  But Kathy Dunderdale knows the federal government will not change its decision.  As a result she knows the outcome is failure before she pledges to put this issue before all others on her agenda for dealing with Uncle Ottawa and fight it every second of every minute of every day in the full glare of the media who will be following it intently for the whole time.

What a better position could she be in with an election coming this fall?

We will get to see her evident political impotence. every day

The voters will be reminded of her poor judgment every day.

And Dunderdale runs the very serious risk of being goaded by her self-imposed impotence of having to ramp up the rhetoric to ever more ludicrous levels.

Yep.

Forrest Gump’s mom had it right.

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Experts warn of external threats to recovery

Along with population statistics, here’s another one you can bet the current provincial Conservative crowd won’t be holding out quite as enthusiastically as the fabricated version of Bank of Canada' governor’s remarks they were using until recently.

As the Globe reported:

Top policy makers indicated Wednesday that they are on heightened alert for a deeper crisis in Europe that spreads beyond Greece and, potentially, hurts Canadian banks or the wider economy. Though the direct exposure of Canadian banks to countries such as Greece is low, the Bank of Canada warned that Canada’s financial institutions are vulnerable through links to the United States and other countries that are much more exposed.

Those top policy makers include analysts at the Bank of Canada and federal finance minister Jim Flaherty.

The question that remains is what economic problems in the United States and Europe would do to demand for oil – our new chief export – and other commodities as well as what it might do to prices for them as well.  Anything that drops the price and the demand will also drastically affect provincial government revenues.

That won’t be good on a go forward basis, to use another of a recently famous politician’s famous phrases.  Since the provincial government doesn’t even have an imaginary protective bubble this time, that could make what one analyst forecasts as a bad deficit and debt situation get much worse.

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Like sands through the hour glass…

Adios John Hickey, the Pavement Putin of the Permafrost.

The ever-troublesome labradore offered a fitting tribute to Hickey as leaves politics.

The staunch defender of the Muskrat Falls megadebt project won’t like people being reminded of his position a decade ago when another Premier had a better deal, at least as far as the taxpayers of the province would be concerned.

labradore offers a copy of the letter then-Goose Bay mayor John Hickey sent to then-Premier Roger Grimes conveying the position of the town council on Grimes’ potential deal.

Among Council’s reasons for rejecting the development of Gull Island and Muskrat Falls together without saddling the province with massive debt, jacking up domestic electricity prices and shipping discount power to people outside Newfoundland and Labrador?

For starters, they wanted a written guarantee 500 megawatts of power would be available for development in Labrador.   In the Muskrat Falls plan, there is no written guarantee and the thing won’t produce enough power to ship to Nova Scotia for free, to the island and still give Hickey 500 megs for Labrador.  It’s not possible.

Then they wanted direct industrial development in the Lake Melville region from the project.  Again, the Muskrat Falls project offers exactly nada on that one.

Lastly, Council wanted to make sure that ALCOA would have what he termed a “competitive opportunity” to build a smelter in Labrador. 

Again:  goose egg.

Wasn’t Leo Abbass a member of Council back then?

Maybe someone should ask him if that 2002 letter still represents his resolute position.

 

 

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Dunderdale dunder-fail on SAR call centre

Kathy and Steve had a nice chat on the phone, but Stephen Harper’s biggest Newfoundland and Labrador fan couldn’t persuade her guy to change his mind about shifting a search and rescue call centre from St. John’s to the Joint Rescue Co-ordination Centre in Halifax.

So much for raising expectations, Kath when you know you can’t deliver.

Luckily for the people of the province, Harper wasn’t interested in [Premier Kathy]* Dunderdale’s idiotic suggestion that the provincial government take over the call centre and pay to keep the jobs in this province. So much for that ass-thought.

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*  added for clarity.

Updated:  Premier Kathy Dunderdale will play out the last act in the bizarro local political drama that comes with telephone calls when she scrums with reporters on Thursday.  This should be a doozy.

And if you want a simple description of the Newfoundland political life cycle of the telephone call, refer to nottawa.  He relies on his considerable experience to map it out for you.  .

Population drops in NL again

Recent population figures from Statistics Canada suggest the recession is over and things are getting back to normal.

Population in Newfoundland and Labrador dropped in the last quarter primarily due to out-migration.

Regular readers of these e-scribbles will be familiar with the point.

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Cross Putin off your list

Add the Pavement Putin of the Permafrost to the list of provincial Conservatives who won’t be seeking re-election come the fall.

John Hickey won’t be running again, since apparently two terms are enough.  Did someone leave off the “to be pensionable” part of that? Your humble e-scribbler had him in the doubtful pile some time ago although last December he appeared to be readying for a run at federal politics.

So much for the story circulated to the ever-gullible last December that all incumbent Tories would be seeking re-election.

If you believed that you likely also believe that there was no December Deal to keep Kathy Dunderdale in place until after the next general election when the Tories will hold the real race to replace Danny.

Hickey will be remembered for many things, not including the photo, above, from The Labradorian.

In his most illustrious moment, though, Hickey launched a lawsuit against former Liberal leader Roger Grimes for comments Danny Williams made and attributed to Grimes.  The law suit died a quiet, but embarrassing death.

Don’t be surprised if Goose Bay mayor Leo Abbass seeks the Tory nod in the upcoming election.

As for the Liberals, Danny Dumaresque dropped a flyer in the district but has since started sniffing around seats on the island.  Among the most recent likely targets for Dumaresque:  Lewisporte and Tory incumbent Wade Verge. No word on another potential Liberal candidate in Menihek yet.

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Expectations

Having jacked expectations through the ceiling, Kathy Dunderdale better convince Stephen Harper to commit to halt the transfer of the jobs at the coast guard search and rescue co-ordination office in St. John’s to Halifax.

If she gets nothing, then she will bear responsibility for the failure.

The only worse outcome will be if harper takes Dunderdale’s commitment to have the provincial government pay for the federal operation.

Dunderdale and Harper will speak by telephone this evening, apparently but Dunderdale has already said she won’t be available to brief reporters on the call afterward.

Local media are hyping the crap out of it based on Dunderdale’s babbling in front of reporters on Tuesday.

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Belize dannys Fortis

Almost three years after Danny Williams’s Conservative administration in Newfoundland and Labrador expropriated Fortis’ electricity assets in the province, the government of Belize has taken a leaf from Williams’ playbook and seized Fortis’ interest in Belize Electric Limited.

Fortis held a 70% interest in the company at the time of the seizure.

Compensation for the expropriation has yet to be determined.

In related news, Standard & Poor’s is warning the Belize government that it may downgrade the country’s credit rating in the wake of the move.  According to Reuters:

"The final details of the acquisition and its impact on the government's debt burden and fiscal flexibility are uncertain. However, based on the information currently available, we believe that there is significant likelihood that we could lower the ratings to 'B-minus' upon the conclusion of this transaction," S&P said.

In its statement, S&P said Belize's general government debt as a portion of gross domestic product is already a high 85 percent, with the interest burden around 15 percent of its revenues.

“The proposed bill would allow the government to take over Fortis's share, with an estimated book value of $100 million," S&P said, which noted Fortis holds 70 percent of the company's equity.

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Well did she know in advance?

The shipyard that supposedly had so much work it didn’t know what to do just laid off 250 workers.

Makes you wonder why the company dropped out of a lucrative shipbuilding contract and – equally – why Kathy Dunderdale took the news without batting an eyelid.

Did she know in advance?

And why exactly did they drop out of the multi-billion dollar JSS contract competition?

Say it ain’t so Update:  This story from voice of the cabinet minister certainly looks like we have a major problem at Kiewit, that the provincial government has known about the problems for some time, and that their only solution is to try and rush through a provincial government ferry contract to keep the yard open, at least in the near term.

So how long has the provincial government known about the problem?

How bad is it?

And why did the provincial government keep the story from the people who will likely be paying to keep the yard going?

The VOCM story before it gets disappeared:

The MHA for Grand Bank is questioning Peter Kiewit Infrastructure Company's commitment to the people of the Burin Peninsula. Labour Minister Darin King calls the layoffs at the Marystown shipyard unfortunate, but he says the government has been working studiously with Kiewit and the union to develop a new ferry strategy that could greatly assist the community's shipyard.

 

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Penis Envy

I’ll share a quote with you now from Canadian marathon runner Peter Maher that I found interesting: "Running is a big question mark that's there each and every day. It asks you, 'Are you going to be a wimp or are you going to be strong today?’"

My answer is I am going to be strong today, and looking around this room, I can see that’s your answer as well.

That’s a bit of Kathy Dunderdale’s speech to delegates at the NOIA oil and gas conference in St. John’s on Tuesday.

Odd choice of words, isn’t it?

Forget that the quote is actually only attributed to the Canadian-born marathoner.  Think about the implications of the words.  It isn’t about the internal struggle to find the inner strength to start a race and finish it or to challenge yourself to go that extra mile. It isn’t about growth and perseverance.

Nope.

Every day she faces the choice between being strong or being a wimp.

Of manning up or being a pussy.

Dunderdale used a quote that is almost self-consciously masculine in a room where most of the people in it were men.

Men don’t talk like that, of course.  Well, not unless they want to make sure everyone knows how insecure they are. 

It’s like sex.  The more you talk about it, the less you are getting it.

Strength is like power.  If you talk about it, you don’t have it.

Dunderdale talks like that a lot.

She likes to draw distinctions between herself and others.

Stark opposites.

Opposition politicians are too stunned to understand something, but she is smarter.

She could on the steps of Confederation Building be ranting and raving or throwing stones but she is better than that.

It’s part of a theme she’s been on since earlier this year:  Kathy is different.  Politicians need to do that, of course. You win elections by being different from the others in the pack. This is different. These comparisons are something she does even when it doesn’t really fit with the topic.

That’s what tells you she has a need to send this message over and over.  The thing you start to wonder after a while is why she feels that need.  Conventional political wisdom is that she is safely enthroned as both Premier and leader of the provincial Conservatives.  And while her polling numbers are dropping she is – supposedly – way ahead of her rivals. She shouldn’t be feeling quite safe.

Strength and power and the need to point out how she is different are for Kathy Dunderdale what books and reading are for Sarah Palin and Danny Williams.

How she is different might not always be clear, even to Kathy, but she goes to great lengths to point out she is something-er than someone else.

And that’s really part of the problem for Dunderdale.  She winds up defining herself in terms of the person or group she’s dealing with at a particular time. What you are left with is the sense that Kathy Dunderdale cannot define her ideas, her values and her approach to leadership on her own.

The result gets convoluted sometimes like it did back in February when she was the same as Danny but different all at the same time, the more she talked. 

You can see this need to bring up inappropriate comparisons if you can stand listening to her entire scrum with reporters outside the NOIA conference.  It’s only seven and a bit minutes in total.

Dunderdale starts out by saying she and her staff are pressuring the Prime Minister as hard as they can. Then she tosses in the comparison about how she could be scoring political points by grandstanding but she isn’t.  That’s a gratuitous line but note that it’s there as the second point.

Then Dunderdale goes into a list of how she and her staff and getting a message through to this one and that one in Ottawa.  She’ll keep it up as long as she keeps it up.  The goal is to get the federal government to reverse the decision to close a local search and rescue call center.

Then Dunderdale says that while all pressuring and pushing to get the feds to change their mind is going on, she and her officials are talking with Uncle Ottawa about taking over this supposedly essential service from the federal government. Well sort of taking it over, maybe, if they don’t mind,  because in between the message sending thing, they are doing the idea thinking thing.

But having now started out by saying the whole thing was about getting the feds to keep the thing running here in the province, Dunderdale says that right at the moment they are on another tack entirely.  “The piece is, though,” says Dunderdale, resorting to her trademark  way of using jargony words to try and sound smarter, that she and her officials are trying to find solutions.

Then she’s back talking about how she could be out there throwing rocks at the federal government but she is thinking long-term here. And all that dissolves in a speculative bit about how medievally stone-throwingy she might get when or if the federal government doesn’t do one or maybe both of the two clear messages Dunderdale is sending despite the fact the Prime Minister won;t return her telephone calls.

All those shifts from the conciliatory and diplomatic to the possibly blustering and two different, contradictory policy threads in about the time it takes to hard-boil an egg.

Amazing, isn’t it?

If nothing else changes between now and next October, Kathy Dunderdale will likely keep her current job.  How long she keeps it would be anyone’s guess.  If you want to put a bet, try something measured in months, not years.

But once the campaign starts,  Kathy is going to have a hard time of it up against any politician – leader or not – if she can only define herself by reference to who she is talking about at any given moment.  And in a televised debate up against two different leaders with different styles, Kathy might get herself into an even greater identity crisis than she seems to be having already.

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Kremlinology 36: Thinking with your ass

We’d all like to think that political ideas come out of politicians’ heads after careful thought and lots of research.

In Newfoundland and Labrador, government ideas tend to spring from the ass.

A whole bunch of people in the province are not happy with federal plans to close a coast guard emergency call centre and shift the work to the Joint Regional Search and Rescue Centre in Halifax.  Those people think the federal Conservatives pulled that idea out of someone’s ass.

Organized labour in the province is screaming blue murder about the decision.  The opposition parties in the provincial legislature are raising a stink.    They wanted to have an emergency session of the legislature and pass a resolution condemning the action.  Kathy wouldn’t do it.

Meanwhile, Premier Kathy Dunderdale has been taking her time trying to figure out out to get in front of this issue politically while not pissing off the guy on whom she is dependant for a loan guarantee to help finance her mega-debt project slash election gimmick, better known as Muskrat Falls.

Premier Kathy Dunderdale told reporters last week that someone in her office was trying to get a telephone call through to the Prime Minister. 

And a week later, she had to stand in front of reporters and tell them she was still trying to speak with her pal Steve on the telephone.

Well, either that or arrange a meeting whichever came first.

But on that most 19th century of technologies?

Nada on the telephone hooking up thingy.

The message is getting through, though, Kathy assures us.

And pressure is being applied using that passively voice sentence.

How, exactly is it getting through asked the brazen fish broadcast host Brian Callahan of fish minister Clyde Jackman?  No call.  No meeting.  How is the word getting through from the provincial government to the federals?

Jackman didn’t know.

He just said we’d all know soon what the feds decided to do for sure on the call centre. 

Now just to put that in perspective for those unfamiliar with anything that happened in the world before say 1999, that isn’t the way these things work usually. 

Even in the darkest hours after the collapse of the Meech Lake Accord, Brian Mulroney would still answer the phone even if he knew Clyde Wells was on the other end. 

The day Igor ripped through the province, Stephen Harper called Danny Williams to offer up whatever help Dan-o wanted.  That’s right.  Dan didn’t even have to wait to get his call returned.  he got one free from Steve.  Now Dan might have reportedly said no thanks because he didn’t want Peter Mackay to horn in on the credit for saving Danny’s bacon, but at least he actually did get the Prime Minister himself on the horn.

So Kathy’s message obviously isn’t getting through to the federal government on anything.  Her loan guarantee is looking a bit more dodgy than before, she doesn’t really have anything to offer as a distraction and her poll results are still sucking worse than the St. John’s sewerage treatment plant on full reverse.

Not a good place to be in politically, especially for a party that used to thrive on issues just like this. 

So what to do?

Offer to take over some bits of search and rescue in the province from the federal government.

Never mind the constitution.

Never mind that for decades provincial premiers have been fighting to keep the feds from dumping their responsibilities into provincial laps free of federal charge.

Never mind the cost to the public purse.

Never mind the fact mismanagement by Kath and her predecessor have left the government in a rough financial spot despite unprecedented government revenues  such that the next decade could make everyone look longingly on the 1930s.

Never mind, even, that Kath and her mates buggered up the Igor thing that looked suspiciously like an emergency of the searching and rescuing type so that you’d wonder if they could actually find each other in the dark, in a closet with both hands and a flashlight.

No.

Faced with being outflanked politically by her local opponents, Kath opted to show how much she is different from every other politician in a long, sorry line of politicians in this province.

She decided to think with her ass.

In the past week, she could have fired off a strongly worded letter to Ottawa.

She could have sent a fax to Peter Penashue, the regional minister who is also the intergovernmental affairs minister.

She could have told reporters that she had made clear the views of her government that this was just not on.

When asked about it, she could have gone for the sophisticated answer and pointed out that the loan guarantee was another issue and that she would always look out for the best interests yada, yada, yada.

Instead, she opted for the ass-thought.

And to make matters worse, Kathy blathered on in public to reporters about her blatant political impotence by telling them that she has been a week trying to figure out how to get Steve to call her back but without success.

You don’t have to look at her possible motives for offering to take federal responsibilities off their hands and pay for them with provincial cash to boot.  Nor do you have to look very hard to find the considerable numbers of flaws in her political bungling of what should have been a relatively small political issue.

What you can see pretty clearly is that Kathy Dunderdale and her political staff came up with this idea on the fly in a desperate attempt to be seen to be doing something on the issue.  All they’ve really done in the process is show seasoned observers that they really don’t have a clue.

It is also pretty clear that they really don’t have any sense of direction, generally.  That’s not surprising, mind you, given that when Danny did a runner, Kathy was only supposed to keep the office warm for a few months until his permanent replacement showed up. They’ve been coasting for a while.

But you would think that when the governing Tories decided to keep Kathy on a bit longer than originally planned, they’d have given her a set of ideas and some people who could actually manage these sorts of issues for her. That’s what experienced, seasoned political parties should be able to do after only seven years in office.

Should be able to do, but can’t in this case.

And just other other governments that couldn’t manage the small stuff, they went to the usual repository of Newfoundland political brilliance:  the ass.

After a mere seven years in office.

Not a good sign.

Not a good sign at all.

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US has surplus electricity

A conference in Halifax last week heard a tale of electricity demand in the United States that you certainly aren’t hearing from proponents of mega-debt projects north of the border.

Massachusetts-based consultant Danielle Powers said that the New England states have enough capacity to meet anticipated demand in the near term.  At the same time, Powers said the situation could change if up to 8500 megawatts of existing generation in the United States wound up out of production.

But still:

"When you look at (natural gas) prices right now, I don't know how the case is made financially to bring the resources in," she responded. "In the near term, unless I'm missing something, I don't see it working."

Price seems to be the key.  Another American consultant quoted in the same New Brunswick Business Journal article put it the same way.  John Kerry is policy director for the Conference of New England Governors:

"There will be, at some point in the future, the need for reasonably priced Canadian power," he said at the Atlantic Power conference. "The lower the price, the greater the chance they will purchase Canadian power."

Something says Kerry wouldn’t think that 14.3 cents per kilowatt hour plus wheeling charges through three Canadian provinces and up to five American states will wind up with “reasonably priced” power in New England.

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This week has 22 e-mails

The controversy over the provincial government’s bungling of the emergency response to Hurricane Igor got a bit more curious on Monday when labradore released a series of e-mails he obtained from the provincial government under access to information laws.

The e-mails document a part of the record of how Danny Williams wound up recording a segment of This Hour has 22 Minutes the same week as the disaster.  Coupled with documents released to the Packet in April, they undermine the provincial government’s contention that they needed three or four days to figure out how bad things were before they asked the federal government for assistance.

CBC was originally scheduled to record the Williams’ appearance on September 21.  They put that off until later in the week, but here’s where things get really interesting. 

At 11: 00 AM the day of the storm, Danny Williams’ publicist sent an e-mail to an unidentified person at 22 minutes  that included the following comments:

We've cleared his schedule as we will be going around the province visiting sites. Destruction is widespread already and the storm hasn't even hit full force yet.

At that point they knew things were very bad.  They also knew they’d be “visiting sites”.  They obviously didn’t need to assess the situation since the provincial government’s emergency response organization had all sorts of sources of accurate information on roads, hospitals, schools and anything else going on in the province.  Williams and his crew were planning the standard politicians’ sight-seeing tours of disaster areas.  

Now the official explanation for the four day delay in calling in federal assistance is that the provincial government needed to figure out how bad things were and what they needed to do.    Williams’ successor Kathy Dunderdale, Tom Hedderson,  the municipal affairs minister at the time and the current municipal affairs minister, Kevin “Fairity” O’Brien all have tried on variations of that same argument.

But before noon on the day the storm hit, the Premier’s Office already knew that “Destruction” was widespread.

Later on the same day,  Williams’ publicist wrote this:

State of emergency being declared in a few places already. Major damage and flooding. The place is a mess.

But what really stands out is what you get when you cross reference the comments by Williams’ publicist with situation reporters released to the Packet by the federal government about its response to Igor. For some reason they are on the CBC’s website and not available from either the packet or its daily big-brother, the Telegram.

In an e-mail giving the situation as of 13:15 PM September 21, a federal situation report contained this note:

Highway infrastructure is profoundly impacted. Of all events, Fire and Emergency Services NL (FESNL) has stated that this is by far the worst disaster that they are facing.

The note refers to a death that happened.

But bear in mind this information came to the federal emergency co-ordination team from the provincial government’s team at FESNL.  Public Safety Canada and the National Defence both had liaison officers at the FESNL emergency operations centre to make co-ordination easier.

So if the provincial government had such a handle on the scope of the problem, why did they hesitate to call in extra resources?

Good question.

So far there hasn’t been a good answer.

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Minister Chickenshit

Municipal affairs minister Kevin “Fairity” O’Brien continues to defend bungled decision-making at the topmost levels of the province’s emergency response system by citing the work done by the hard-working men and women who actually did the heavy lifting during Hurricane Igor.

Geoff Meeker’s got a solid post on the whole controversy over O’Brien’s unfounded and despicable attack on the integrity of the reporter and editor at the Packet for printing a story based on fact.

Two things:

1.  Fairity can’t refute the evidence so he follows the pattern of his idol and launches into character assassination instead.  Pure chickenshit. 

2.  Like poultry poo, O’Brien’s comments stink to the high heavens.  Every time O’Brien launches into one of his diatribes, he only fuels public resentment aimed at government over the whole issue. 

Keep going Kevin.

It takes a rare type of political genius to think that making a bad situation worse is a good idea.

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Will one of them change parties?

Good to his word from last February, former Conservative member of parliament Rex Barnes is challenging Ray Hunter for the Tory nomination Grand Falls-Windsor-Green Bay South.

Notice in a piece from NTV News that Barnes is rattling off a bunch of problems that have come up since the Conservatives swept to power in 2003.  That Internet connection one is especially noticeable given that the Tories coughed up $20 million to help several private sector companies expand their business in the province.

Now this is a place where party affiliation is often a case of whatever-gets-me-elected.  Ask Dipper cum Tory cum Connie Trevor Taylor about flags of convenience. Right off the bat, Rex is getting a few points for sticking with the team he started with.

But given that his constituents are complaining about stuff his buddies did or failed to do - as the case may be, it seems odd he wants to run for the Tories. As for incumbent Ray Hunter, he hasn’t always been so well loved inside the Tory caucus.

The nomination fight is on Wednesday.

It might be interesting to see if the loser  - whoever that might be – decides to change parties.  After all, this district is one that turned up on a few lists of districts the Liberals could pick up even while Danny was still around.  With temporary leader Kathy “Dropping-like-a-stone” Dunderdale, the Tories might have a hard time hanging onto this seat regardless of whether the Tories run Rex or Ray.

If one of them changes teams after the nomination, that might be a clue as to how Tories are assessing the chances of them hanging onto this seat.

And if Kathy Dunderdale turns up with a fire truck to give away, or someone starts laying pavement any time soon, you can bet its on the Tory list of vulnerable seats.

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Making the Most of Our Energy Resources (Part I – Electricity Reform)

In slightly more than a decade, fundamentally bad policy decisions by Liberal and Conservative administrations have turned the provincial government’s electricity corporation into an unregulated, unaccountable monster.

Such is the power of this hydra corporation as we enter the second decade of the new millennium that it can corrupt the public body  - the board of commissioners of public utilities - that is supposed to control the corporation in the public interest and turn it, instead, into nothing more than a tool of the corporation’s Muskrat Falls venture, all with the enthusiastic support of the provincial government.

The result of all this is that the people of the province will not be getting the most of their own resources.  Rather, they will pay dearly to supply discounted energy to other people.

No single act created the beast.

No single act will bring it under control.

But there is no question that the province’s electricity industry must be radically over-hauled.  If we allow the industry to continue on its current disastrous course, what should be a very rosy future for the people of Newfoundland and Labrador  may well turn out to be as bleak as the bleakest time in the province’s history during the 20th century.

In reforming the electricity industry in the province, we must keep an eye on our basic principles.

1. The entrepreneurial private sector must be the main engine of growth in a globally competitive economy.
2. The provincial government must regulate the industry to support economically and environmentally sustainable development.
3. At the same time, the provincial government must ensure that the people of the province – the resource owners – get their fair return at the lowest possible level of risk.

With those three elements in mind, let us now turn to some specific actions.

Privatize


While there may have been an argument in favour of nationalising the provincial electricity companies 40 years ago, those rationales have long since vanished.  Even some of the politicians who created the hydro corporation in the mid-1970s now think it was a bad idea. And if privatizing a Crown hydro corporation is a good policy for a former Parti Quebecois activist, the idea is well worth considering in this province.

Privatizing the provincial government’s energy corporation remains the best way to reform the provincial electricity industry almost two decades after a provincial government first pursued the idea.  Turning the corporation over to the private sector would net the provincial government significant cash while at the same time removing a huge debt from public shoulders. 

In the past 20 years public attitudes have changed.  A renewed sense of confidence in the public would support the creation – in effect – of several new corporations doing business within the province and expanding outside its borders.

The provincial government will need a plan on how to privatise the electricity corporations. They could entirely in the private sector from the start.  The provincial government could sell shares or accept offers – as Danny Williams was ready to do – for any or all of the company and its assets. 

Alternately, the provincial government could create Norwegian-style hybrid companies that are jointly own by the state and private share-holders. The public interest in hybrids would be managed through a parliamentary oversight committee similar to the type used in Norway and elsewhere to remove Crown corporations from decisions that may be based on too many partisan considerations.

In either approach, the new companies must be incorporated under the Corporations Act* and subject to exactly the same laws and taxes as all other companies in the province.

Embrace Competition


No matter what route the provincial government choses to take on privatization, it must sell off the generation assets seized from private sector companies in the 2008 expropriation legislation. This will be an important first step in smashing the dangerous monopoly created under the 2007 energy plan.  It will also send a powerful message to investors that the provincial government will not tolerate such grotesque abuses of power.

Reform would also mean replacing the provincial energy corporation’s  tangled mass of interlocking directorates and companies with clearly defined companies that look after electricity transmission (TransCo) and generation (GenCo).  GenCo could be also subdivided into the island generation assets and those in Labrador.

Churchill Falls (Labrador) Corporation should remain a separate company and possibly would be retained as a Crown corporation as proposed in 1994. The provincial government should move quickly to repeal legislation that supports the Lower Churchill Corporation, including the 1978 development corporation act.

In the future any Lower Churchill development should be undertaken by the private sector, based on sound financial plans.

For TransCo, the provincial government will also have to set an open access transmission tariff or give the public utilities direction to do so. OATT allows open access to transmission facilities. It is part of the competitive system fostered by American regulatory changes in the early 1990s. This is an important part of connecting the province into the North American electricity market system fairly and equitably.

Protect the Public


The 1994 version of the Electrical Power Control Act created a role for the public utilities board in managing the electricity industry in the province.  The provincial government should repeal a series of exemptions granted in late 2000 that effectively stripped the PUB of its power to ensure that the people of the province benefit from the electricity they need at the lowest possible cost, as mandated by the EPCA, 1994.

As part of the reform, the PUB leadership must be removed from the realm of political pork and patronage.  New commissioners should be appointed from the winners of an international competition.  Funding for an expanded commission that we will need to carry out the PUB’s new role should come from a combination of public funds and levies on the regulated industries.

The PUB’s first task will be assessing the province’s energy needs for the future.  This will determine what, if any new power sources might be needed.  The PUB can then re-allocate existing generation to meet the forecast need or call for new projects.

Set the Taxes and the Policies


In the new world, the provincial government will have a new role.  At first, politicians and bureaucrats will have to get used to a new role instead of involved in all sorts of high-powered negotiations for which they have usually turned out to be uncomfortably unsuited.

The provincial government will have to set broad electricity policy to deal with environmental issues:  how much of the province’s domestic supply should be from renewable sources?  Should the province allow natural gas generation?  What about nuclear power?

The provincial government will also have to set taxes and other charges that generators, transmitters and domestic retailers will have to pay to the people of the province in exchange for developing electricity resources. This could turn out to be an interesting new source of provincial government cash. There’s another post coming on that aspect.

The government would also have to set the broad rules that the public utilities board would follow when setting retail prices within the province.

Taken altogether, these reforms to the provincial electricity industry would:

• Reduce the public debt load.
• Produce an initial pot of cash for the provincial government from sales.  This would be followed by new annual revenue from taxes and other charges that the provincial government currently doesn’t collect.
• Promote sustainable development of new energy sources at the lowest cost for domestic consumers.
• Create a stable environment in which entrepreneurs can attract investment in order to develop the province’s full energy potential.

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* Corrected from Companies Act

The Weekly Traffic Report, June 13 to 17, 2011

1. Nalcor negotiating Muskrat transmission with Hydro-Quebec
2. Cross Sheila off your list
3. Titanic records available from UK National Archives
4. 24 French
5. Belize wants to buy out Fortis interest in Belize power company
6. 15 ideas (and more) for a stronger Newfoundland and Labrador – Introduction
7. Spend ‘em if ya got ‘em:  the Alberta version
8. 15 ideas (and more)  - Setting the Table
9. Building the fishery of the future (15 ideas series)
10. The looming debt problem:  update and Politics and Disasters

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Local pols to s**t bricks

Tom Hedderson, Fairity O’Brien and other lame local politicians will likely be re-thinking their political futures soon.

CBC announced Friday that Anthony Germain will be hosting the CBC’s flagship morning show in Newfoundland and Labrador later this summer.  He will replace Jeff Gilhooley, who is retiring in July.

His reporting career spans two decades from local radio in New Brunswick to CBC Radio's parliamentary bureau in Ottawa. In the nation's capital, Germain won investigative awards from the Canadian Association of Journalists for investigative reporting on both radio and television.

Germain has hosted CBC Radio's flagship political show The House as well as the local Ottawa morning show. He has been a guest host on The Current, As It Happens, and The Sunday Edition.

Germain is currently the CBC’s China correspondent.

Germain will be the latest in a series of heavy-hitter hosts on the corporation’s major morning broadcast in the province.  The CBC has three other morning shows serving regions of the province but the St. John’s show has the largest audience and has been growing in popularity with the local audience.

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“Letter perfect”? Guess again.

Municipal affairs minister Kevin “Fairity” O’Brien thinks that his government’s response to last year’s Hurricane Igor disaster was absolutely correct in every respect.

In fact, he is so convinced of the rightness of what he and his colleagues did that 

“I would not change a thing and it's fine for you to say, like looking at an email — a paper trail — and say that somebody up in Ottawa or someone somewhere else was scratching their head," said an emotional O'Brien [in a CBC interview].

You can hear the full O’Brien interview here:  CBC Radio St. John’s Morning Show.

CBC left the final word of their piece with someone who was coping with the disaster while cabinet ministers flitted around on helicopters “assessing” things and talking to reporters:

Eric Squires, the Anglican minister in Catalina and the organizer of relief efforts when people were left without necessities, said the provincial government failed residents.

"[I'm] really disgusted because we were desperate out here for water and bread," said Rev. Squires.

"I called [provincial] fire and emergency services to ask if we could get a boat to go across the bay to get some bread and water and they said 'No, buy what you want and send us the bill.' And during the same time they turned down [federal] help for us."

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Politics and Disasters

Even to people not desperately in need of help in the wake of last year’s Hurricane Igor, it was pretty obvious  - at the time - the provincial government was more geared to stoking and stroking political egos than anything else.

By the second or third day, media reports made it obvious that people desperately needed help, the provincial government couldn’t deliver help and that assistance from the federal government was a mere telephone call away.

Only a blind partisan or cockeyed optimist thought otherwise and  - given the most recent developments - only a complete fool would claim otherwise today.

Information released to the Clarenville Packet under federal access to information laws documents the extent of the bungling inside the highest levels of the provincial government.  we aren’t talking about the front line workers or contractors.  We are talking senior bureaucrats,  their political masters and their political masters’ legion of fart catchers.

An intra-agency meeting of the Regional Emergency Management Coordinating Committee (REMCC) was held the afternoon of Sept. 21. Representatives of Public Safety Canada, Environment and National Defense departments, and the provincial government noted resources were on standby.

Captain Michael Pretty of the Canadian Forces offered to have 180 staff deployed in six to 10 hours and the HMSC St. John’s and two helicopters mobilized.

The Canadian Coast Guard had 36 generators (125-700 watt) and 45 water removal pumps, with operators, available.

The province also had access to the national emergency stockpile of food.

The province declined all these offers.

And so it went day after day.

Evidence mounted that the provincial government simply was completely incapable of responding and at still the politicians refused to make a simple request for aid.

While the federal agencies standing by to assist initially thought the provincial government had a grip on things, by mid morning on September 23 they had changed their minds.  The Packet quotes a federal situation report that power was out in wide areas, food supplies were running short and citizens were having to take matters into their own hands to deal with shortages of everything including medical supplies.

By the time provincial officials realised they were in the middle of a mess, they could not even draft a simple letter to request aid.  The Canadian Forces liaison officer had to include a letter in an e-mail, asking the officials to print it off, sign it and send it back.

It still took the provincial government 24 hours more to respond and even then it very consciously and deliberately restricted the aid to the barest minimum.  As the Packet reports:

The official RFA [request for assistance] was sent by the province to the federal Department of Public Safety at 2:07 p.m. on Friday, Sept. 24.

It asked, specifically, for “Sea King helicopters and the ship-based naval support necessary to maintain operation of said helicopters.

“For greater certainty, the province of Newfoundland and Labrador is requesting no other assistance from the DND at this time," the province stated in its request.

Thankfully, the federal officials ignored that last direction.

As Canadian Forces ships aircraft and personnel streamed into the province, the Prime Minister and Premier took a helicopter tour of a part of the region.

Danny Williams’ staff, meanwhile, had been co-ordinating a television appearance for the Premier all through the hurricane aftermath. 

Williams left the Prime Minister later in the afternoon of Friday, September 24 and drove to a downtown St. John’s school where a crew from “This hour has 22 minutes” and a classroom full of elementary school students waited to record a sketch due to air the following week.  The sketch featured Williams spewing some characteristic invective.

Just to illustrate the extent to which the provincial government’s bungling and miss-placed priorities were apparent at the time, take a look at posts your humble e-scribbler made last September.  The first came on September 23. There’s another on September 24.

The second, a week later, highlighted the way in which the government’s public statements seemed designed to stroke political egos rather than provide concrete information to people affected by the disaster.  It turned out to be an apt metaphor for what was going on inside the disaster response headquarters.

As the Packet notes, the first provincial assistance request to the federal government focused entirely on cash to pay compensation for victims.  At a time when thousands were still stranded, lacking power and with dwindling food supplies, the provincial authorities were busily handing out claims packets and looking to Uncle Ottawa for cash.  Meanwhile, the politicians were flying around staging photo ops for the evening news programs.

Danny Williams’ successor had a chance on Thursday to address the rather blindingly obvious shortcomings of the provincial government’s response.  Kathy Dunderdale said everything had been handled very well.  Not satisfied with the completely foolish response alone, Dunderdale went farther.  The delay in asking for federal help was merely to ensure the provincial officials had proper plans.  After all, said Dunderdale, all those soldiers, sailors and air crew would merely be an added burden on local communities already reeling from the disaster.

Yes, friends,  in Kathy’s world, help is actually a hindrance. In the face of such comments, it doesn’t matter if Dunderdale is genuinely so stupid that she spouts such nonsense or merely thinks the rest of us are even more stupid such that we’d believe such a thing.

What matters is that her remarks are  - without doubt or debate – utterly wrong.

They are stupid in a way that gives the word a new meaning.

The Canadian Forces came to Newfoundland last September with clothing, food, and shelter not only for themselves but for others as well. That is precisely why they came in the first place.  They stood ready from the beginning to come from the moment the storm hit.

Had Danny Williams and his officials asked for them on the first day only to send them home shortly after, the whole affair would have cost them nothing.  Under federal law, a provincial request for aid means that the federal government picks up the whole tab. 

In other words, there was no legitimate reason for any delay in asking for help. 

Yvonne Jones is right:  Kathy Dunderdale owes the people of the Bonavista and Burin peninsulas an apology for the mess regardless of whether it was caused by political egos or old-fashioned incompetence.  If Dunderdale had half a wit about her, she’d have acknowledged the problems and as the new Premier committed to right the wrongs.

Instead she told a monstrous whopper of a tale.  You could call it a lie, but frankly, you cannot be sure that Dunderdale actually knows that what she said is drivel.  Dunderdale might just be so inept that she must rely on briefing notes written by another incompetent.

And that is makes Dunderdale’s response all the worse.  The public can loathe the showboat and all his puffing last September.  He’s gone and no longer matters. She could have distanced herself from him safely and cleanly with no cost.

But Dunderdale didn’t. 

She turnered up, yet again.

Last fall, your humble e-scribbler noted that natural catastrophes sometimes turn out to foreshadow political disasters.  Well, no one could have foreseen the political disaster that is Premier Kathy Dunderdale.

Put Kathy Dunderdale’s demonstrated incompetence on Thursday over Hurricane Igor together with a series of events during her leadership (including her disastrous poll results in May) and you can bet she is going to get quite a surprise come the fall.

That is, Dunderdale will get a surprise in the fall unless a few of her more capable caucus mates decide to get rid of her before then for the good of the party and the province.

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PEI to study electricity supply

The Government of Prince Edward Island has appointed a five member commission to examine the province’s energy supply and pricing.

The commission — which includes Mike O'Brien, David Arsenault, Roger King, Gerald Morneau and Richard Hassard — will spend the next year looking at the future of P.E.I.'s electricity costs.

The province has some of the highest electricity rates in the country. Most of the power is purchased from outside resources — largely New Brunswick.

One potential source for the island is electricity from Muskrat Falls.

Speaking at a conference in Halifax on Tuesday, Bill Marshall, New Brunswick’s former electricity grid regulator said that Muskrat Falls could provide the Maritimes with a source of power cheaper than imports from New England.  It could also allow the region to shut down environmentally dirty thermal plants.

What Marshall didn’t say is that this is only possible because Nalcor and the provincial government plan to sell Muskrat Falls power to consumers outside Newfoundland and Labrador below the cost of producing electricity at Muskrat Falls. Consumers inside the province will pay the full cost of production plus guaranteed profits to Nalcor, Emera and Newfoundland Power.

According to Premier Kathy Dunderdale, Muskrat Falls power will cost 14.3 cents per kilowatt hour to produce, assuming the project meets all current cost projections.  That’s about four times the current wholesale cost of electricity in Ontario.

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