NB grid booked up

The New Brunswick electricity is booked, with only 310 megawatts of capacity expected to come free in 2015, according to the Telegraph Journal.

Preliminary studies of the New Brunswick system commissioned by Newfoundland and Labrador Hydro  show that while the existing grid could handle power from the Lower Churchill, the booked capacity  - particularly across the New Brunswick to Maine intertie - is “the limiting factor.”

"When you reach an intertie and it is fully booked, fully reserved, you need to reach an agreement with one of the holders of the capacity," said Sylvain Gignac, the president of the NBSO [New Brunswick System Operator], which polices the province's transmission lines.

"It will be tough without building new transmission, except if they reach a deal with one of the biggest holders, which are Hydro-Québec Energy Marketing (HQ Energy Marketing Inc.) and New Brunswick Power (NB Power)."

In the current configuration, Newfoundland and Labrador Hydro would have to cut a deal with an existing user to ship what the Telegraph Journal says would be 740 megawatts through New Brunswick.

The alternative would be to build new capacity.  Nova Scotia-based Emera is reportedly looking at a new connection from Canada into the New England market.

In an interview with the Telegraph Journal, Hydro chief executive Ed Martin repeated the standard Hydro forecast: 

Commercial customers in Newfoundland and Labrador could take on some of Lower Churchill's power, Martin said, adding that the closure of a thermal generator could free up a greater need for the project's power there.

But New England remains the No. 1 market for the company.

"We would certainly target there but we're in business and anywhere we have a need that we can fulfill, we're going to consider that," Martin said.

Martin did not disclose what customers those might be.  Environmental impact documents for the Lower Churchill project do include a demand forecast that shows a domestic need for power from the Muskrat Falls and Gull Island sites.  As well, the thermal plant at Holyrood will be maintained in operation – not closed as suggested in Martin’s comment – to help manage the transmission of power from the Lower Churchill.

Hydro seems to be counting on Emera to add to the capacity across the international border.  The recent deal between Hydro and Emera that sees the latter buy power from Hydro could well be part of a much larger, developing relationship between the two companies.

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Meeker: on media

If you think Winston Smith is shy and retiring, try Geoff Meeker who in his most recent posting laces into the coverage of Eastern Health in comparison to other coverage.

However, reporters took the premier’s controversial comments and rushed them to air and print without question. Perhaps it’s easier to take a juicy quote like “they should be shot” and run with it, rather than challenge – and provoke – the premier.

If I had been a reporter at that scrum, I would have guffawed right in his face. I would have said, “But premier, your government also issues sensitive news releases late on a Friday afternoon. It seems to be a common tactic for certain issues.”

Of course, the premier would deny. And I would offer to come back with specific examples. But the deed would be done – the premier’s balloon would be deflated – with cameras rolling and microphones recording.*

Yes, this would piss the premier off. I would likely be placed on some kind of blacklist. But I would still be able to attend scrums, and that’s pretty much all you need these days – one-on-one access to the premier happens infrequently anyway.

DH h/t Update:  As one commenter noted, Friday news releases are featured in a West Wing episode called “Take out the trash day”.

As Josh explained it to Donna:

Donna: What's take out the trash day?
Josh: Friday.
Donna: I mean, what is it?
Josh: Any stories we have to give the press that we're not wild about, we give all in a lump on Friday.
Donna: Why do you do it in a lump?
Josh: Instead of one at a time?
Donna: I'd think you'd want to spread them out.
Josh: They've got X column inches to fill, right? They're going to fill them no matter what.
Donna: Yes.
Josh: So if we give them one story, that story's X column inches.
Donna: And if we give them five stories ...
Josh: They're a fifth the size.
Donna: Why do you do it on Friday?
Josh: Because no one reads the paper on Saturday.
Donna: You guys are real populists, aren't you?

 

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Winston Smith: on health care

Shame this guy – we all assume he’s a male writing under a pseudonym – feels so constrained in sharing his views.

But there is a Parkway-sized pothole on the road to separatist health policy: it's a provincial jurisdiction. The many failures of health care in NL cannot be pinned on Ottawa. If the separatists criticized the running of health care, they would have to criticize DW, whose government has been running it for six years.

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Offshore board announces inquiry into helicopter crash

A news release from the Canada-Newfoundland and Labrador Offshore Petroleum Board:

The C-NLOPB announced today that in accordance with the provisions of the Atlantic Accord Acts pertaining to ‘Mandatory Inquiries’, the Board shall establish an inquiry into worker safety associated with the recent helicopter incident in the Newfoundland and Labrador Offshore area.

The inquiry will not examine issues covered by the investigation of the Transportation Safety Board.

While we believe it is important to announce the inquiry at this time, we continue to work on a definition of the mandate, terms of reference, selection of a commissioner for the inquiry, and timeline for inquiry completion.

A further announcement will be made when these details are available.

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That’s great but…

There are plenty of pockets of oil offshore Newfoundland that have “significant discovery” status that aren’t commercially viable finds.

Expect StatoilHydro’s announcement that it has found hydrocarbons in a well on the Flemish Pass to be super hyped to all get out.  Some people will be over the moon just like they were hysterical in the early 1980s over Hibernia and Hebron.

This find is in at least 1100 metres of water.

Statoil Hydro will apparently apply to the offshore regulatory board to have this well declared a significant discovery. 

Before anyone gets excited, here’s the official definition of that term:

"a discovery indicated by the first well on a geological feature that demonstrates by flow testing the existence of hydrocarbons in that feature and, having regard to geological and engineering factors, suggests the existence of an accumulation of hydrocarbons that has potential for sustained production."

Look at that word “potential”.  Notice as well that nowhere in there does the word phrase “commercially viable” appear.

News of a find offshore is great but….

And it’s the stuff after the but we need to think about.  More information down the road and we can make a better judgment if this actually means anything more than the fact they’ve found oil.

Strong update: For those who missed it, local oil industry expert Rob Strong did a great interview on the StatoilHydro announcement with Radio Noon.  If they post an audio file, we'll link it.

Rob is well known in the local industry having been in it from the beginning. He did a great job of balancing the excitement that comes with a find of any type offshore with the wisdom borne from experience that there is still a long way to go before anywone starts uncorking the champagne.

Rob talked about the deep water and the challenges that come from drilling that far out in that much water.  Technology has come a long way but there are plenty of issues to be addressed in trying to bring oil into production that far out and down, even allowing for it to be large enough a find to be commercially viable.

Of course, too, we all have to recall that area is outside the current 200 mile exclusive economic zone.  No one has resolved yet what, if any, implications arise for anything that far out to sea from the provisions of the United Nations Convention on the Law of the Sea (UNCLOS).

That's the thing:  StatoilHydro's announcement is great.

But...

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How Irish aren’t we: budget deficit version

Here’s an idea for public finance we are not likely to see around these parts:

Irish politicians  - both in the Republic and in the North - are taking pay cuts to help deal with the country’s financial woes.  Cabinet in the Republic is slicing pay by 10%.  The opposition party leader is lopping off five percent of its pay and senior executives at the national broadcaster are taking a “significant reduction” in pay.

A tip of the derby to Guido Fawkes for that one.

Around these parts, government is facing a record forecast deficit.  We’ll have to wait until  next spring to see if it comes through as predicted in the budget.

In the meantime, cabinet is forecast to increase in size by one new portfolio plus all the attendant costs budget spending will likely stay at record heights for the next three years.

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Federal funding for universities

The Conservative government in Ottawa wants to funnel cash to the country’s universities but it wants to have a say in how the money is spent.

This is a curious change for a party elected not so very long ago with a supposed commitment to limiting federal spending in areas of provincial jurisdiction.

This is curious too since the provincial government objecting to the scheme is not the most chest-thumpingly independentist/sovereignist/autonomist one, but rather the supposedly demonic one in central Canada.

Ontario – of all provinces -  doesn’t like the strings attached to the Ottawa cash.

Education is an area of exclusive provincial jurisdiction under our constitution. Over the past 40 years that exclusivity has eroded in practice to varying degrees largely due to the federal decision to spend its cash in universities.  Many reasons are advanced for the spending and some of them are persuasive. 

For the most part, however, the federal government has not usually reserved for itself, as it wants to do in this case, the right to approve or disapprove of a project even though half the funding involved will come from either the provincial government or the university.

If the federal government wants to support research and development across Canada it may do so.  However, it should do so without restriction.  The money ought to be available to anyone – within or without a university – who can do the work.

On the other hand, if the federal government merely intends to funnel cash to a particular area of research, restricts the work to universities and then proposes to control the whole affair, it has crossed into an area where Canadians should not allow them.

How odd that no one seems to find this whole thing objectionable.

No one that is, except the Government of Ontario.

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Coincidence: Abitibi union version

Communications, Energy and Paperworkers union leaders met with Danny Williams in St. John’s in early April.

As a Canadian Press story put it on April 2, 2009:

"It really does create a lot of uncertainty ... and our members and retired members are uneasy about what's taking place," he [CEP president Dave Coles] said from Halifax, as he was returning from a meeting with Newfoundland and Labrador Premier Danny Williams.

A day after returning from the meeting, the union decided that the federal government needed to step in an bail out the company.  From cbc.ca on April 3, 2009:

Communications, Energy and Paperworkers union president Dave Coles says Stephen Harper must intervene.

"Our demand of the government is that it take care of the Canadian workers.… I want the prime minister to get off his duff and do something for Canadian workers," said Coles.

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Pentagon eyes VH-71 cancellation

As part of re-shaping defence spending, the Pentagon is proposing to scrap a purchase of an EH-101 variant, dubbed the VH-71, to replace the aging Sea Kings used by the Marine One presidential flight.

The 101 beat out Sikorsky’s S-92 in a competition that ended last year.

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Rio Tinto responds to aluminum downturn

Via company news release:

Rio Tinto Alcan today announced it will slow the construction of the Yarwun alumina refinery expansion in Gladstone and curtail annual bauxite production at its Weipa mine to 15 million tonnes (from 19.4 million tonnes in 2008) due to the sharp fall in alumina and aluminium demand and prices in recent months.

Announcing the decision, Rio Tinto Alcan Bauxite and Alumina president Steve Hodgson said the depressed state of the market and a sharp cutback in demand made further tough decisions necessary.

 

Someone needs to ask Wade Locke about that great big gi-enormous project that was supposedly coming any day now to Labrador.  Hint:  it was an aluminum plant.

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Continuing the Cougar S-92 SAR spin: CBC or Cougar?

CBC is running an exclusive interview with Cougar helicopters employees about the search and rescue mission its dedicated SAR helicopter flew the day one of its S-92s crashed.

There’s a paragraph in the middle of the CBC online story that leaps out for attention, given the focus in media coverage on the whole issue of 103 Squadron being on exercise at the time of the incident:

Cougar normally supplies backup to the Canadian Forces for search and rescue operations run out of its base in Gander, in central Newfoundland. But on March 12, the base's Cormorant helicopters were involved in a training exercise in Cape Breton, so Cougar's own rescue team was pressed into service.

“Pressed into service”.

That makes it sound like something was jury-rigged and unprepared, like Cougar didn’t normally do this sort of thing.

As the saying goes, nothing could be further from the truth. Cougar provides dedicated search and rescue service to the offshore oil industry.  It isn’t an accident.  They didn’t throw something together in haste that day.

Well, they shouldn’t have thrown it together because they apparently already knew where 103 Squadron was when CHI91 launched that Thursday morning and therefore knew the flying times involved.

Nothing in the CBC online story explains why it took the Cougar SAR flight so long to launch.

There is plenty of good stuff for Cougar and its people.   It’s a nice piece, the kind any public relations person would be happy to see in this sort of story given the inevitable questions that are already being asked about every aspect of this incident including Cougar’s own SAR response.

But given that the attack on 103 Squadron is largely a media-driven angle, one has to wonder:  is the spin in this piece coming from CBC or Cougar or both?

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Just shoot me

Gunplay  - or more accurately stating that people ought to be shot for certain things not normally associated with capital punishment offences  - is apparently quite the popular rhetorical device.

MP stirs up new fuss in apology to taxmen
The Gazette February 2, 1985

A Progressive Conservative member of Parliament who said last year that federal income tax officials should be shot has re-ignited the controversy with a grudging "apology."

Union officials who represent Revenue Canada's 14,000 taxation workers say the so-called apology from Cariboo-Chilcotin MP Lorne Greenaway amounts to a further "deliberate insult." They have now complained to
Prime Minister Brian Mulroney about the British Columbia back-bencher's behavior.

Greenaway set off the fuss last March when, as a member of a Tory caucus task force on Revenue Canada, he told a public meeting in Kamloops: "The only way we are going to straighten (tax department officials) out is to take them out and shoot them."

Said it before

Greenaway noted at the time that he had said the same thing on at least one other occasion.

But despite repeated demands by the Public Service Alliance of Canada for a retraction, and complaints to the prime minister and Revenue Minister Perrin Beatty, Greenaway did not respond for 10 months. Finally, on Jan. 25, he wrote the following letter to David Flinn, president of the union's taxation component:

"Dear Mr. Flinn:

"Perhaps if some of your people heard the witnesses that came before our Revenue Canada task force last March in Kamloops, B.C., heard of the abuses by Revenue Canada employees (against) taxpayers, saw the devastation caused, you might just begin to understand why one could be
driven to such an intemperate remark as I made at the time. I'm sorry we have a system that allows such horrors. I've been ordered to apologize and I do so."

That reply is "totally unacceptable," Flinn insisted. "This whole thing has been 10 months in the commode and still his attitude hasn't changed. In a brief telephone conversation Greenaway denied he had been
ordered to apologize by Mulroney and said his comments were "no big deal."

"I was told to apologize by my staff, so they wouldn't have so much work to do and so many phones to answer," he said.

Beatty characterized Greenaway's Kamloops remarks as regrettable but understandable.

"What he tried to do was set it in some context, which was that over the course of the time he spent as a very diligent member of the task force he'd heard a succession of stories where ordinary people had their rights affected, and he felt very strongly about it."

Beatty said nobody believes Greenaway's comment about shooting tax officials was meant to be taken literally.

 

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Rookie Liberal MP sorry for Lepine line

Times Colonist, January 25, 1994

 

Rookie Liberal MP Jag Bhaduria apologized and pleaded for forgiveness Monday for once telling Toronto school board supervisors they should be shot.

In a trembling voice, Bhaduria told the Commons he “deeply regrets” the comments in a 1989 letter to his former employers.

 

“The letter was written at a low point in my life, when I was under tremendous stress relating to my career and my family,” said the MP for Markham-Whitchurch-Stouffville.

The statement appeared to satisfy Prime Minister Chretien. “It's enough because it's an apology,” Chretien said as he hurried past outside the Commons.

Herb Gray, the government House leader, said Bhaduria had not offered to withdraw from the Liberal caucus and gave no indication the party was pressing him to do so.

In 1989, Bhaduria wrote to the Toronto board of education's director saying that Marc Lepine, who massacred 14 women at the University of Montreal, should have lined up certain school board supervisors “against the wall and shot all of you. That would have been the most satisfying day of my life.”

 

That statement was written just a few days after the rampage.

He was in a long-running battle with the board at the time. Bhaduria, a teacher who was born in India, argued he had been denied a promotion to vice-principal because of racial discrimination.

Liberal Party officials have said they learned of the letter after Bhaduria's name was already on the ballot for the Oct. 25 federal election.

Meanwhile, other controversies about Bhaduria's have surfaced.

In a 1977 interview in Maclean's magazine, Bhaduria said he had bought “quite a few” high-powered rifles after being racially attacked and threatened.

Shortly after his election last October, Bhaduria appeared in court as a character witness for Kuldip Singh Samra, who had already admitted to killing two men and wounding a third in a 1982 courtroom shooting.

Samra, who defended himself, argued he should be convicted of manslaughter. But he was found guilty of first-degree murder.

Bhaduria, 50, testified that “I found you [Samra] were a great humanist who believed in humanity and equality for all.”

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Cabinet ‘should be shot' over flights, Mohawk says

Ottawa Citizen, October 13, 1994

Mohawk leader Billy Two Rivers angrily suggested Wednesday that the federal cabinet should be executed for their support of low-level military flights over Labrador.

Calling them "pimps and "whoremasters”, Two Rivers said Prime Minister Jean Chretien and his ministers are making money from foreign countries for the flights even though it is causing Innu women to have miscarriages.

"Sometimes, I don't think they are human beings in the way that they think If they are robots and they are just machines serving the establishment, then maybe they should be put against the wall and shot,” said Two Rivers.

He also said the Pope is a "hypocrite” for not vocally supporting the Innu after they met him in Rome.

The former professional wrestler, who is known for being outspoken, made the comments to a meeting of Quebec and Labrador Indian chiefs.

Peter Penashue, president of the Innu Nation, immediately distanced himself from Two Rivers' comments. He said the Kahnawake leader's intentions were good but he should rephrase his harsh statements.

But while Two Rivers acknowledged that he made his speech in anger he refused to apologize. He said he was speaking on behalf of the Mohawk community of Quebec.

Quebec and Labrador chiefs approved a resolution demanding the government immediately stop the "murderous flights and begin environmental hearings.

The government is looking at increasing the number of annual flights by 5,000, bringing the number to 15,000 a year.

-----------------------

Elton John says he will apologise over Madonna tirade
Agence France Presse (English)
October 29, 2004

Elton John has said he will apologise to Madonna, after launching an expletive-laced attack on the Material Girl for lip-synching on stage.

"Would I apologize to her if I saw her? Yeah, because I don't want to hurt any artist's feelings," Sir Elton said in an interview in the latest edition of Entertainment Weekly magazine.

"It was my fault. I instigated the whole thing," he said. "But (lip-synching) applies to all those bloody teenage singers."

Attending an awards ceremony in London earlier this month, Sir Elton was incensed to find that Madonna had been nominated for best live act.

Taking to the stage, Sir Elton blasted: "Madonna - best f****** live act? F*** off. Anyone who lip-synchs in public on stage ... should be shot."

In the interview, the pop legend acknowledged that he had spoken out of turn.

"I don't want to escalate it because I like Madonna," he said. "She's been to my house for dinner. It was something that was said in the heat of the moment, and probably should not have been said."

At the time, Madonna's US spokeswoman Liz Rosenberg had flatly rejected Sir Elton's accusations, saying that Madonna neither lip-synched nor spent time "trashing" other artists.

Sir Elton argued that the media reaction to his comments had been out of proportion to their content.

"It was like I said I think all gays should be killed or I think Hitler was right," he said. "I just said someone was lip-synching."

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MLA demoted for saying Premier should be shot

The Globe And Mail March 10, 2005

 

A Saskatchewan opposition politician who suggested Premier Lorne Calvert should be shot has been taken off committees and stripped of his critic duties.

Saskatchewan Party Leader Brad Wall took action yesterday against MLA Jason Dearborn for his comments at a public meeting last month. Mr. Dearborn member of the legislature for Kindersley, was meeting municipal officials when a reeve suggested someone would be shot if school board amalgamation caused taxes to go up. Mr. Dearborn replied his candidate would be the Premier. He has since apologized.

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Emera's role in wheeling deal

A quick review of the raw video of the wheeling deal news conference [cbc.ca/nl link] led to something that means we have to change our view of this deal a bit.

Emera is not the broker of further deals, as we took it earlier. It is the customer, at least as far as Newfoundland and Labrador Hydro is concerned.

At about the 17:25 minute of the news conference, the Premier says quite plainly that the power is sold on the Canadian side of the border to Emera which then is free to sell the power to the market. There's also a reference by Ed Martin at 23:24 to Emera selling power in New England, New York or into Ontario having taken delivery on the Canadian side of the international border.

Since Emera doesn't actually operate as a power distributor in New York, apparently, it's take from sales in the Empire State will be affected by the wheeling and other costs associated with the sale.

The Premier refers at about 25:55 to an escalator clause being in the contract but there is no indication of how that works. It could be something as simple as an inflation adjustment. No matter what it is, the figures tossed out by Ed Martin - maximum $80 million - don't match up with the returns from selling power that takes maximum advantage in the summer month demand spikes in New York.

Taken altogether that reinforces the notion - at least as far as the revenue projections go - that this deal is somewhat better than the previous arrangements. Ed Martin refers to 40 to 45% better than deals over the "past five to 10 years."

However, we also have to consider that the current market prices for electricity may also be better than they were even six to seven years ago. Any suggestion that this deal and the concept of wheeling power is responsible for the increase in prices would be like the government trying to take resposibility for oil being $150 a barrel last summer.

As one last caveat, take note of the references to making more as prices go up, subject to Emera taking a profit. That's all true. However, the downside is equally true, namely that if prices drop, Hydro will make less money. Notice there was no talk of having a floor price.

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Spin doctor: heal thyself

Danny Williams is miffed that Eastern Health issued a news release Friday that included information that 38 more people had been identified who should have had their cancer screening tests redone.

Well, miffed is not the right word. He’s pissed off.

To quote the Premier:

"It's disgraceful. They should be shot over there."

Now that’s bad enough.

Just imagine just for a second if someone – in an authentic and understandable rage - had used those very words to described, for argument’s sake, the inactions of ministers or other officials a wee bit closer to the Premier’s heart than the bureaucrats at Eastern Health.

Okay, that’s a fairly obvious bit of Danny Williams’ favourite standard: the double one. He’s also practicing his other art: spin doctoring.

Then he added this bit:

"This is about people's lives … They have a right to be told," Williams said. "They have a right to be told in a proper manner. There has to be proper disclosure; there has to be someone there to answer questions. It's not something you do at the tail end of a Friday afternoon."

He’s right about that much.

And he’s right that the crucial bit of hard news ought not to have been buried in a news release that, as it would seem, was deliberate structured in all respects to obscure the kernel of news that directly affected people’s lives.

But to be perfectly frank, on a go backwards basis, it’s not like a whole raft of people much closer to the Premier’s political and administrative heart than the Eastern Health crew haven’t done exactly the same thing at least once before.

The culprits: Jerome Kennedy and the crew in government comms.

The incident: the risk of identity theft, not to forget potential disclosure of the details of medical records over the Internet.

The time: January 2008.

The news release: hard news buried at paragraph seven of an 11 paragraph news release.

Can we really fault people for following the examples offered by the tone at the top?

Say it ain't so update: The irrepressible fountain of uncomfortable truths, otherwise known as labradore, has compiled the Chronicles of Ridicule, that is, the litany of examples of the current administration releasing information late on a Friday or at other odd times when no one is available to comment.

He missed a couple on Equalization within the last six months, of course, but that's for another time.

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S-92 failed 30 minute run dry test

According to the Globe and Mail, the S-92 failed a test to confirm the aircraft can run for 30 minutes without oil in the main gearbox.

Documents obtained by The Globe and Mail show that the S-92 failed a critical test of whether the aircraft can keep flying if the oil in its main gearbox leaks out, a key safety feature found in other makes of helicopter – including a model that was beaten out by the Sikorsky for the Canadian military contract. The delivery of the helicopters to the Department of National Defence has already been beset by a series of delays.

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Wheeler deal numbers and stuff

1.  Five year sale of 130 megawatts (MW), 2004-2009:  $46 million annually. [See Note 1]

2.  Price (per kilowatt hour) for the five years:  4.0 cents per KWH.

3.  Two year deal to sell 130 MW of power to Emera:  Minimum $40 million annually.

4.  a.  Price for Emera deal (low;  $40 million for 130 MW):  3.5 cents per KWH

b.  Price for Emera deal (high;  $80 million for 250 MW): 3.6 cents per KWH [See Note 2]

5.  Cost of wheeling (paid to Hydro Quebec Transenergie):  $19 million.

6.  Cost of wheeling:  1.6 cents per KWH.

7.  Average consumer electricity price, New York, 2008:  16.9 cents per KWH. [21.125 Canadian cents per KWH at 25% exchange rate]

8.  Average consumer electricity price, New York, June to Sept 2008:  19.825 cents per KWH. [See Note 3]

9.   According to a cabinet minister familiar with the details of the 1998 Guaranteed Winter Availability Contract (GWAC), Newfoundland and Labrador Hydro considered wheeling the power in 1998 but decided against it since the price earned and the wheeling costs were considered too high. 

The figure at left shows pricing trends to 1999 for New York State. (Source: US EIA)

The information released thus far covers wheeling costs to the New York border. 

Additional wheeling costs would apply for each transmission system through which the power is wheeled before delivery to the final consumer. 

Emera is a broker, not a New York state energy retailer.

10.  The GWAC is apparently still in place.  This requires Newfoundland and Labrador Hydro to operate the plant at Churchill falls at peak efficiency to deliver at least 682 MW to Hydro Quebec during the winter months.  This amount may have been increased under this deal to 800 MW to replace the power that was sold to Quebec from 1998 to 2009 as part of the GWAC but which will now be wheeled to New York.

----------------------------

Note 1:  Values in Canadian dollars.  American prices in American dollars, except as noted.

Note 2:  130 megawatts is equivalent to 1.1388 billion KWH.  250 MW is equivalent to 2.19 billion KWH.  The figures at Line 4 are derived by simply dividing the revenue by the power output.  Since Newfoundland and Labrador Hydro did not release sufficient detail it is unclear if the revenue figures correspond to the power output or not. 130 megawatts at the higher price yields a price of 7.0 cents per KWH.

Note 3:  Source:  New York Energy Research and Development Authority

Wangersky on the Wheeler Deal

Simple.

Factual.

Right now, we’ll have Nova Scotian energy firm Emera handle the deals with customers.
But in fact, the big change involved is not as much the result of us meeting a giant challenge with some newfound strength and determination as it is that Hydro-Quebec changed its rules.

Not only for us, and not recently, either.

No, it’s not so much our strength and determination as the creation by Hydro-Quebec of a transmission unit called Hydro-Quebec Transenergie, and something called the Open Access Transmission Tariff.

In 1997. It hasn’t been a secret, either.

It’s amazing how newsrooms across the country were snookered in the first news cycle by the torque in the official news releases.

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Wheeling deal

Running a block of 130 megawatts of power through Quebec will cost Newfoundland and Labrador Hydro $19 million annually over the course of a five year deal with Hydro Quebec Transenergie.

The wheeling arrangement facilities the sale of the power to American markets.  The sale in the Untied States is brokered through Emera.  The Emera deal is for a duration of two years.  Newfoundland and Labrador Hydro is expected to net between $40 million and $80 million annually.

A previous deal to sell the same block of power directly to Hydro Quebec netted the Newfoundland and Labrador provincial energy company $46 million a year over a five year period. According to Le Devoir, Quebec sold the block on the American spot market.

In effect that would mean the deal announced Thursday merely replaces Hydro-Quebec with Emera as the broker. Hydro-Quebec still earns money on the project through its transmission arm and ultimately through its share of Churchill Falls Labrador Corporation, which generates the power.

Quebec energy minister Claude Bechard described the deal as win-win since it shows Newfoundland and Labrador had accepted the rules of the market instead of seeking special access to the Americans and a federal subsidy for a transmission line through Quebec.

«C'est aussi une bonne nouvelle pour le Québec en ce sens qu'on sait que Terre-Neuve voulait que le fédéral subventionne une ligne, voulait avoir des conditions spéciales pour exporter de l'énergie aux États-Unis. Donc, ils viennent d'accepter, si on veut, les règles du marché.»

Le Devoir said the deal includes a block of 800 megawatts of power for Quebec and 300 MW for Newfoundland and Labrador.  Out of the 300 MW, Newfoundland and Labrador will ship 130 MW to the United States after satisfying local demand with the other 170 MW.

However, under the 1969 Churchill falls deal, Hydro-Quebec purchases the lion’s share of Churchill Falls power – more than 5200 MW – at a fixed cost of fractions of a penny per kilowatt hour.

This arrangement of 800 MW for Hydro Quebec seems to be an increase in the amount guaranteed for winter availability (GWAC) in Quebec under a special 1998 agreement.   Under the original 1998 deal, Hydro Quebec received a guarantee on delivery of 682 megawatts during winter months and the Churchill Falls power plant would be operated at peak performance during the inter months to guarantee the additional power.

Winter is the peak demand time for Quebec.  American peak demand is in the summer.

A news release at the time suggested it was a long-term contract valued at $1.0 billion. [link corrected;  amount corrected]  The wheeling arrangement may have involved more complex negotiations than it first appeared.  The news release on Thursday about the Emera deal contained few facts.

Details of the GWAC deal have been removed from the provincial government website.  The Hydro website now archives news only as far back as 2002. A search of the site for guaranteed winter availability contract using the sites own search engine returned no results. A google search for the same term yielded several hits, all of which have been apparently removed from the Newfoundland and Labrador Hydro website.

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Informing or stifling?

For those who run any kind of online opinion space, the issue of reader comments gets to be an issue.

Over at the telegram, they get way more comments than any local blog and they have an ongoing issue with derogatory posts, spam and the use of sock puppet identities.  They’ve also got a set of terms and conditions people have to accept in order to make comments.

Fair enough.

Around these parts, it’s been a live and learn affair.  Initially, there were no comments.  Over time, we’ve relaxed the rules so now anything posted as a comment shows up on the blog immediately.  If you make a comment and post it, the thing should be there right away.  Just as a clue, hit refresh or reload in case your browser doesn’t refresh automatically.

One category that gets deleted – after the fact – are comments that are clearly nothing but spam.  That would be like the freighter one which just listed off a bunch of services.  These are usually posted by people who get paid to drop spam comments into blog spaces.

The other category is one that is clearly abusive and possible defamatory.  These are few and far between and there has only been one example of that within the past six months or so.

Other than that, just about anything goes.

This has been questioned a couple of times by people whose comments apparently didn’t appear.  if you’ve followed the threads of those discussions you’ll see the simple explanation.  And here’s the thing: you don’t have to take my word for it.  You can post a comment and it will appear right away.  Poof.

Other places do things differently.  Some have no comments and others practice censorship.  It’s called comment moderation, but in practice it’s a way of letting the blog author simply block any comments from appearing that don’t fit what  - as experience shows - are usually entirely arbitrary criteria.

Just as an experiment, your humble e-scribbler tested one of those censorship sites.  Two posts that were on topic to the the discussion were done using my own blogger ID.  They didn’t appear.

In another case and on a different post, two comments were made anonymously.

Interestingly enough, the first one – which queried the figure 35,000 megawatts in a discussion of Churchill Falls got through.  It also got a reply that the figure was what came from the original, i.e. the 1969, agreement.

The second comment pointed out very simply and succinctly that “Churchill Falls only produces a little under 6,000 MW”.

That one didn’t appear either, perhaps because the author suddenly clued in that he’d made a boo-boo.  He acknowledged the boo-boo in a comment of his own but never made any reference to the second anonymous comment at all.

Comments can wind up being a pain for anyone running an online opinion site.  Around these parts, the initial impulse to have no comments was wrong.  Even anonymous posts can bring a huge value to the discussion at hand.

if comments are moderated, then things depend very much on the blog author.  As experience shows, that’s often a case of saying one thing  - we don’t censor – but actually doing something radically different.

Inform the debate or stifle the discussion.

It really is an either/or proposition.

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Hydro inks electricity deal with Emera

State-owned energy company Newfoundland and Labrador Hydro has inked a two-year deal with Emera to for the latter to broker the sale of up to 250 megawatts of power from Churchill Falls into the north-eastern United States.

On the face of it, the deal looks like an arrangement to sell power on the spot market instead of the guaranteed purchase arrangement it replaces.

Premier Danny Williams said the agreements mean the province will get the “lion’s share” of the profits from the sale of the power. He said the $40 million to $80 million per year expected for the province comes after HQ and Emera Energy take their cuts.

Williams told members of the media today that, as the price of energy goes up, the revenue for the province will also increase.

By the same token, as prices go down so too would revenue, presumably.No details of the financing were released outside of estimates that Hydro would receive between $40 million and $80 million annually for the power, depending on electricity prices, the available power and the load capacity on the grid at the time of sale.

A separate five year agreement with Hydro Quebec Transenergie, owner of the Quebec energy transmission grid, facilitates the sale. News media reports have been erroneously playing up the Quebec angle on the story even though that aspect was pretty straightforward.  Since the American federal energy regulator established a free markets policy in 1992, Canadian electricity markets have had to adopt what is known as an open access transit tariff for electricity that allows power to be wheeled competitively across the province at rates set by the provincial electricity regulators.

Quebec Transenergie didn’t have much choice, provided the existing grid could handle the load. by the same token it’s unclear what New Brunswick premier Shawn Graham meant when he stated that he would not stand by and allow energy to be wheeled through his province at the expense of development in his province.  New Brunswick will have to abide by the same free market rules as other energy-producing provinces if it wants to sell power into the United States.

Interestingly, the sale is being handled by Newfoundland and Labrador Hydro, although the power is generated by Churchill Falls Labrador Company.  While Hydro used to be the CFLCo parent, the two are now sister companies within the provincial umbrella energy corporation.

The power deal appears to replace a similar arrangement with Hydro Quebec known as the guaranteed winter availability contract.  First signed in 1998, the GWAC saw Hydro recall 130 megawatts of power from Churchill Falls under the terms of the 1969 CFLCo development agreement and then re-sell the power to Hydro Quebec at a defined price far above the pernicious terms of the 1969 deal.

The original three-year GWAC contract was renewed for a further three years in 2001 and then for five years by the current provincial government. The five year deal expired on March 31, 2009. The five year deal generated $46 million revenues annually.

The GWAC was a way of forestalling a possible bankruptcy by CFLCo since the 1969 agreement returned insufficient revenue to keep the company solvent over time. The original news release, linked above contained a background presentation but this has disappeared from the provincial government website.

The original GWAC became the subject of some controversy with accusations arising from then opposition energy critic and current Hydro board chairman John Ottenheimer.

It is unclear from Thursday’s announcement if the GWAC and the related shareholder’s agreement within CFLCo have expired, been replaced or will be honoured in some other way. CFLCo is owned by Newfoundland and Labrador Hydro (65.8%) and Hydro Quebec (34.2%).

That information might change the claim today that Hydro captures the “lion’s share” of the revenues from the Emera deal.

Also unclear at this time is the status of the 225 megawatts of power from Churchill Falls that currently flows to western Labrador through Twin Falls Power Company.  Twin Falls was a joint venture of the two iron ore companies in western Labrador and BRINCO.  The power plant was shut down and TwinCo received a guaranteed price on a block of Churchill Falls power.  That agreement expires in 2014.

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