A closed market #nlpoli

The provincial Conservatives will guarantee that taxpayers in Newfoundland and Labrador will be forced to pay for Muskrat Falls no matter what happens to oil prices or with new technology.  They are closing the electrical markets on the island portion of the province so that consumers and businesses in Newfoundland can only buy electricity from Nalcor.

Under  changes to the Electrical Power Control Act, 1994 currently being debated in the House of Assembly, the same provincial Conservatives who fought for years for open access to markets outside the province will close the electricity markets on the island portion of the province to competition.

Section 14.1 (1) of the new bill allows that Newfoundland and Labrador Hydro – a Nalcor subsidiary – will have the exclusive right to “supply, distribute and sell electrical power or energy to a retailer or industrial customer in the province.”

Retailers or industrial customers will only be allowed to purchase electrical power or energy from NL Hydro.  Another clause of the bill prohibits companies from developing electrical power on their own land for their own use.

Anticlimax #nlpoli

So it turns out the provincial government is going to build the Muskrat Falls project.

There’s a total shock.

The one thing that came screaming out of Monday night’s extravaganza was the desperate intensity of it all.  The longer the thing has dragged on the more extreme the rhetoric has become, the grander the claim of spectacle, and the shorter the relevance of the language to what is going on in the province.

If they say it often enough, the government and its backers might just believe half of it.

-srbp- 

Dundercast tonight #nlpoli

The Premier will announce something this evening at 6 PM.

If she announces that cabinet has already sanctioned the project, no one will be surprised.

If she announces that the project is already sanctioned, then the odds rocket up that this post from a couple of weeks ago will become the big story of the coming weeks and months. 

Think of the post as a bit premature, that’s all.

Tom Marshall already confirmed he’s leaving.

And they are talking cuts and layoffs again.

When will she go?

-srbp-

Where the Money Comes From #nlpoli

Just to put the provincial government budget in perspective, here are the top five sources of cash that come into the treasury from what are considered the province’s own sources.

This table is based on the Estimates for Budget 2012.  Oil royalties are the major source of revenue by quite a margin.  They make up 40% of the province;’s own revenues.

All federal revenues added up to about $600 million in the 2012 Estimates.  If you listed the revenue sources by dollar amount, federal revenues would go into the list below right after corporate income tax.

The last column in the table indicates whether the revenue is up or down in the latest forecast compared to the original budget.

Provincial Sources

Source	Share of Provincial	Up or Down
Oil Royalties	40	D
Personal Income Tax	17	U
Retail Sales Tax	16	U
Corporate Income Tax	13	D
Mining Royalties	9	D

-srbp-

$#*! Jerome says, in living colour version #nlpoli

With a hat tip to IP Freely.

-srbp-

A Crisis. Or Not. #nlpoli

“Muskrat Falls is a project that will not impact net debt by a single dollar,” finance minister Tom Marshall said in a provincial government news release.

Unfortunately for taxpayers, they won’t pay the net debt.  That’s an accountant’s calculation of what the provincial government owes less any assets they could theoretically sell off if they had to clew up business in a hurry. 

What taxpayers will have to contend with is the total liabilities and Tom plans to make those liabilities get a whole lot bigger than they are today.  On the day that Tom Marshall predicted that his current budget will have a deficit three times what he forecast in the spring, Marshall also forecast billions more in borrowing to pay for Muskrat Falls and to pay for the government’s day-to-day expenses.

You’d think that a finance minister would understand that. 

Evidently, Tom Marshall doesn’t.

Either that or he thinks the rest of us are so stupid that they would accept his ridiculous comments as if they were true.

Revenue Streams and Not-so-Captive Markets #nlpoli

Natural resources minister Jerome Kennedy was in an exceptionally candid mood in the House of Assembly on Tuesday.

He explained that under legislation that will pass before Christmas,  Nalcor would be setting electricity rates for industrial users in Labrador.

Mr. Speaker, we need a guaranteed revenue stream in order to assure the bond rating agencies and the federal government that there is going to be monies to satisfy the requirements of paying the project. It is as simple as that. So, therefore, there has to be a restricted role of the PUB.

The interesting thing, though, is that Jerome couldn’t explain later on during debate in the House how the policy for Labrador would guarantee a revenue stream when the whole idea was to compete to Quebec so they couldn’t undercut Nalcor on price.

Combine the two of them, [generation, set by Nalcor,  and transmission, set by the PUB] …, and that is where we will come up then with the approximately $56 or $57 [per megawatt hour]  rate that will be charged. Again, it is very competitive and comparative to Quebec. However, if there is a process where Quebec either drops their rate to try to get business or increases their rate, Mr. Speaker, there will be a review mechanism in place whereby that can also be done by the minister.

The guaranteed revenue stream is actually somewhere other than in the industrial rates.  The guaranteed revenue stream is coming from the consumers on the island. 

Some people might be getting confused on how all the prices compare, what with the talk of megawatt hours and kilowatt hours.  Well,  industrial users in Labrador will be paying 5.6 or 5.7 cents per kilowatt hour for electricity that will come from Churchill Falls and from Muskrat Falls.  Consumers on the island will pay a blended price for electricity that includes Muskrat Falls electricity at 20 cents per kilowatt hour according to the most recent estimate Kennedy gave the House.

To switch to megawatt hours, for a second, that would be $56 per megawatt hour for industrial consumers.  Muskrat Falls delivered at Soldier’s Pond would be $200 per megawatt hour.

 

-srbp-

Revenue Streams: Sure Thing edition #nlpoli

Premier Kathy Dunderdale on where the money will come from to pay for Muskrat Falls, from the House Assembly on Monday:

So, unless there is some catastrophe in Newfoundland and Labrador and everybody decides not to pay their light bills, Mr. Speaker, in that circumstance we might lose the generation facility. I cannot imagine who will buy it with nobody paying their light bills, Mr. Speaker.

-srbp-

$#*! the Premier says: PUB review edition #nlpoli

Premier Kathy Dunderdale on the PUB and its review of Muskrat Falls (November 21, 2012):

Mr. Speaker, when the PUB produced its report it concurred with Nalcor – and it is in the executive summary right in the front so you might want to read it. It concurred with Nalcor and MHI that based on Decision Gate 2 numbers that we did need the power and indeed it was the least-cost alternative. [Muskrat Falls]

Premier Kathy Dunderdale on the PUB and its review of Muskrat Falls [December 11, 2012]

We did try to bring this project under the scrutiny of the PUB. Over nine months and over $2 million later, they would not give us a recommendation.

Incidentally, what the Premier said on December 11 is correct.

What she said on November 21 is just dead wrong.

-srbp-

$#*! Jerome Says: federal loan guarantee not firmly in place yet #nlpoli

In the House of Assembly on Tuesday, natural resources minister Jerome Kennedy was pretty clear about the sanction process:

“What we have done … [is ] we have slowed down the process in terms of the sanction.”

Asked about slowing down the sanction process on Wednesday, natural resources minister Jerome Kennedy told the House of Assembly:

“I could be wrong; I do not remember saying anything about slowing down the process.”

Interesting.  And an Interesting choice of words.

Still Ready for a Better Tomorrow #nlpoli

Natural resources minister Jerome Kennedy on the financial typhoon of glorious benefits he and his colleagues are about to unleash via called Muskrat Falls:

The Province will make a lot of money off this project at some future point in order to not only to pay for the project but to pay for social programs and to allow us to transition from a non-renewable resource economy to a renewable resource economy. [Emphasis added]

We are always ready for a better tomorrow, Jerome.  Too bad no one can tell us when that day will come.

-srbp-

Government Delaying Muskrat Falls Sanction: Kennedy #nlpoli

“What we have done,” natural resources minister Jerome Kennedy told the House of Assembly on Tuesday, “[is] we have slowed down the process in terms of the sanction.”

Kennedy offered no explanation why.

Times are tough all over

But apparently they are so tough in the United Kingdom that the Prime Minister has resorted to a version of the Nigerian scam.
From the SRBP e-mail inbox:

Our ref: ATM/13470/IDR

Your ref:...Date: 29/11/2012
IMMEDIATE PAYMENT NOTIFICATION
I am The Rt Hon David Cameron MP,Prime Minister, First Lord of the Treasury and Minister for the Civil Service British Government.
This letter is to officially inform you that (ATM Card Number 5454 7168XXX1 0640) has been accredited with your favor.[<---bit of a grammatical give-away] Your Personal Identification Number is 1090.The VISA Card Value is 2,000,000.00(Two Million, Great British Pounds Sterling).
This office will send to you an Visa Card/ATM CARD that you will use to
withdraw your funds in any ATM MACHINE CENTER or Visa card outlet in the world with a maximum of ?5000 GBP daily. Further more,You will be required tore-confirm the following information to enable; The Rt Hon William Hague MP First Secretary of State for British Foreign & Commonwealth Affairs. begin in processing of your ATM Card.
(1)Full names: (2)Address: (3)Country: (4)Nationality: (5)Phone #: (6)Age: (7)Occupation: (8) Post Codes
Rt Hon .William Hague MP
First Secretary of State for Foreign and Commonwealth Affairs
Email;minister.affairs@XXXXXXXXXXXXXX.com
other person(s) or office(s) different from the staff of the State for Foreign and Commonwealth Affairs to avoid hitches in receiving your payment.

TAKE NOTICE: That you are warned to stop further communications with any

Regards,

Rt Hon David Cameron MP
Prime Minister

Take notice indeed. Count the spelling mistakes and assorted other grammatical errors in this little piece of Nigerian shite.

-srbp-

Dunderdale adds more churn #nlpoli

Not content to rest on her laurels for changes in senior public sector management, Premier Kathy Dunderdale announced two more changes on Monday.

That brings the total for 2012 to 47, not including the two other changes implicit in the November 01 announcement.

Based on previous announcements, there would typically be at least one more announcement of senior management changes before the end of the year.

Dunderdale is on track to make 49 changes to the senior management in 2012.

-srbp-

Corporate Welfare Bum-wipe #nlpoli

People who supported the December 2008 expropriation bill had a very hard time on Monday justifying the mess they created in which taxpayers of the province are now responsible for hundreds of millions in environmental clean-up.

One of the more common explanations is that the people of the province would have wound up in the same spot anyway since Abitibi was on the verge of bankruptcy anyway.

Finance minister Tom Marshall tried it on Friday [via the Telegram]:

“If we hadn’t expropriated, the company still would have gone into double-C double-A protection or into bankruptcy protection, and we would have been left with nothing but the contaminated assets,” Marshall said.

And federation of labour boss Lana Payne [@Lanampayne] tried the same thing via Twitter:

[In my opinion] expropriation was right decision. Otherwise we'd be left with clean-up and no assets.
…
As the saying goes, can't get blood from a turnip. AB was restructured under bankruptcy law. Because of restructuring, NL would be where it is today: one of many parties in a long line.

The only problem with this argument is that is it more supposition and rationalization than fact.

Dunderdale admits to hasty asset grab #nlpoli

In the House of Assembly on Monday, Premier Kathy Dunderdale said that the provincial government decided to seize assets of three companies in Newfoundland and Labrador in 2008 because it knew that one of the companies – AbitibiBowater  - was working on a sale of some assets to other parties.

When we took a decision to expropriate Abitibi, it was something we had to do quickly, Mr. Speaker, because we knew the intention of the company was to sell the assets.

…

we decided that we would move quickly. We only had the weekend to prepare, but we all agreed that whatever risks were ensued…that it was the right thing to do and that our legislation should protect us

Toward a fair and just society #nlpoli

The December 2008 expropriation bill was not the right thing for the provincial government and the House of Assembly to do.

The expropriation was wrong.

It was wrong, but not because it didn’t work.

It was wrong, but not because the provincial government accidentally expropriated a contaminated mill site.

The December 2008 expropriation was wrong because it was a violation of the fundamental principles on which our society is supposed to operate.

Nottawa Repost: Legislative oversight in an era of "patriotic correctness" #nlpoli

The following originally appeared at nottawa on September 2, 2009 as a comment on the emergency session of the legislature to deal with changes to legislation about the Churchill River.

It includes a mention of an earlier political controversy, the December 2008 expropriation bill.  The two are linked and in light of Friday’s ruling by the Supreme Court of Canada in case related to the expropriation,  Mark Watton’s observations at the time are worth reading again.

Danny Williams, thee Premier at the time of both these incidents, may be gone from the political scene but the ministers who were integral parts of the policies remain in positions of power.  One of them - Kathy Dunderdale – is William’s hand-picked successor. 

The policies and the attitudes that bred them remain in place, as finance minister Tom Marshall  made plain on Friday.

Nothing has changed in Newfoundland and Labrador. And that is why these comments from three years ago still resonate:

The Pattern Proved #nlpoli

Consider the latest failure of a lawsuit launched by the Greatest Legal Mind and Premier Ever in light of another case, Henley v. Cable Atlantic, a post that originally appeared in August 2006.

“Forgive us for believing NalCor, Premier,” about the Abitibi expropriation former Liberal leader Yvonne Jones pleads on Twitter, in the wake of the latest court decision against a Williams scheme.

“No!” comes the reply shouted from every rooftop in the province.

It’s not like the good reasons to doubt Williams and Nalcor weren’t right in front of our faces in December 2008.

-srbp-

Selling Nalcor #nlpoli

New Democratic party leader Lorraine Michael raised a touchy question in the House of Assembly on Thursday.

It was about selling Nalcor.

Only problem for Lorraine was that she got it buggered up.