A foundation of lies and deceit #nlpoli

You could feel the shock among the local media on Friday as Stan Marshall carefully dissected the insanity that is Muskrat Falls.

Didn't matter if you heard the voices on the radio,  watched them on television or read them online.   The reporters' emotional reaction transferred through whatever medium it was that conveyed their words.  Here it was laid out in stark detail:  billions over budget,  years behind schedule,  a financial burden for the province its people will be sorely pressed to bear and all of it built - in essence - on a series of false statements,  faulty assumptions, and anything but facts and reason.

Never mind that all of what Stan Marshall said was - in effect - already widely know and had been known for most of the preceding decade.  Here you had someone as rich or richer than Danny Williams telling them that Muskrat Falls was utter shite.  By the unspoken law of Newfoundland politics,  the poor benighted scribblers now had no choice but report it.

The Last Refuge #nlpoli

Call them the Dam One Percent.

Call them Dan-Dam Style.

Call them Millionaires for Muskrat.

Call them MFers, with tongue firmly in cheek.

The business people who back Muskrat Falls are now writing letters to the newspapers and forming political action groups to show their support of Muskrat Falls.

Like nobody knew that people like Nalcor directors Cathy Bennett and John Steele, former Nalcor chair Deanny MacDonald, and Labrador businessman Peter Woodward didn’t love the Muskrat Falls project already.

How to make bad decisions #nlpoli

Premier Kathy Dunderdale sounded genuinely exasperated last week when she chatted at length with Open Line show host Randy Simms about Muskrat Falls.

“Why,” she asked, “would a government want to develop a project that is not in the best interest of the province?”

No government would, of course.

No government ever has.

Not the current government, nor any in the past. Aside from a few naive people, the only ones who think otherwise are the nasty little partisan troll-shits who campaign with slogans like “no more give-aways” and actually believe their own propaganda.  

What goes around, comes around, as the saying goes. That seems to be why Kathy is so frustrated these days. having come to power on the basis of the “no more give-aways” propaganda, she is finding herself on the receiving end of the same sort of foolishness that she and her colleagues used to peddle about their predecessors in government.

Regular readers will recall the warning about this sort of idiocy in a post about the politics of history  in Newfoundland and Labrador:

In eight years time, they may find that many of the changes they hoped for, like massive new industries, will still be little more than the fodder for someone else's rhetoric.

Karma is a bitch, after all.

For all that, Kathy Dunderdale is convinced she is on the right track. As  she told NTV’s Issues and Answers in March, we “need to get to sanction.”

 Nothing will persuade her to change her mind.  And that, of course, is one of the surest ways there is to make a bad decision.

Go back to Kathy’s rhetorical question to Randy Simms.  It suggests that she has tied herself personally to the Muskrat Falls project. When you believe that fervently in your conclusion, you can do all sorts of things that can lead you astray

You can make a bad decision by only listening to people who agree with you.  Kathy Dunderdale has done this already:  she accepts as an expert conclusion the opinion of a lawyer with no experience other than what he’s gotten since taking up the appointment as “consumer advocate”  on the public utilities board.

And you can make a bad decision by dismissing people who don’t.  By contrast, Kathy Dunderdale suggested that former Premier Brian Peckford had very little involvement in energy policy during his 15 years in government serving both as energy minister and Premier.

You can make a bad decision by assuming you are smarter than everyone else.  Take a gander at unofficial Liberal party leader Dean MacDonald talking to CBC’s Debbie Cooper.  After slagging off the public utilities board as being nothing but disgruntled ex-Hydro employees, MacDonald notes that the people at Nalcor are among the smartest people in the world. They are the experts, according to MacDonald.  And by extension they’ve got to be right.

You can hear the same sort of thing in the way Kathy Dunderdale talks about the project:  all the experts and all the smart people back the project, according to Dunderdale.  How strange that Dean criticizes Kathy agree on everything, but yet they are perfect alignment when they talk about Muskrat Falls.  

You can make a bad decision by believing false information.  Kathy Dunderdale tied the two projects together in January in a speech to the St. John’s Board of Trade:

The gatekeepers of the natural transmission route through Quebec were denying us fair opportunity to get the power to market, and having been burnt once on the Upper Churchill, we were determined not to let that happen again.

Quebec does not have a stranglehold on Labrador development.  It’s that simple. 

You can make a bad decision by making a false connection between a current decision and the past one.  Muskrat Falls proponents love to talk about Muskrat falls in the context of the 1969 Churchill Falls contract. In that January speech, Kathy Dunderdale made the approval of the Muskrat Falls project proof that the people of the province have broken the Churchill Falls curse:

Failure to take the right course of action today would be no different than taking the wrong course of action a generation ago.

Rejecting Muskrat Falls – even if it made perfect sense for economic and rational reasons – would be an emotional failure according to Kathy Dunderdale’s construction. 

You can make a bad decision by jumping to a conclusion.  Kathy Dunderdale may like to say that Muskrat Falls is about meeting the island’s energy needs, but the truth is the project was a solution in search of a problem. The current provincial government committed to build something on the Lower Churchill in 2005.  Danny Williams tied his retirement to building the Lower Churchill.  After five years of trying, they couldn’t find any way to make it happen.

In 2010, they decided to build Muskrat Falls alone.  And everything since then has been a series of rationalisations to justify the conclusion they started with.  They did not examine alternatives before deciding to build Muskrat Falls.  They dismissed natural gas as being “purely hypothetical”.  They changed their story to claim they have looked at the alternatives and settled on Muskrat falls only after credible experts explained that natural gas from the local offshore is a viable, cheaper alternative to Muskrat Falls.

There are lots of ways to make a bad decision.

Your intention to do the right thing may not matter at all.

- srbp -

Gil Bennett: fact checker #nlpoli

Gil Bennett, Nalcor vice-president in charge of the Lower Churchill project, took some exceptions to comments in yesterdays posts on Muskrat Falls and electricity prices.

Rather than go back and deal with his comments in a re-write of the original post, let’s deal with Bennett’s comments here and link the two together so people can get the full effect.

For those of you who didn’t read the original post, go back and do so.  It will help.  In this post, Bennett’s tweets are in bold print.  Your humble e-scribbler’s reply is in regular type.

Muskrat Falls, the kamikaze venture #nlpoli

Not surprisingly Nalcor’s Ed Martin latched onto a pretty  superficial argument to dismiss economist Jim Feehan’s critique of Muskrat Falls.

"I go over to see my Dad, an 80-year-old gentleman living on his own, and I say to Dad, 'I have a solution for you — why don't we raise your electricity rates so high that you won't use electricity?' ... He's going to say to me, 'I think you're going to have to find another solution here.' "

Premier Kathy Dunderdale wasn’t far behind.  As VOCM put it:

Dunderdale says Feehan's argument that electricity rates are artificially low and that people will use less electricity if the prices were increased, is something government simply does not agree with. She says their primary focus is to keep electricity rates low. 

Dunderdale never explained why she thought prices weren’t artificially low.  Odds are she doesn’t know whether they are or they aren’t low or what impact changing the way energy is priced might have.

Like most politicians, she is probably contented with the rather simplistic view that created the current system.  Low prices are politically good.  “[T]ry selling that,” writes the Telegram editorialist on Friday, “to a pensioner on a fixed income.”

Such a discussion on the doorstep is a scary prospect, to be sure, even if you understand all the nuances of the issue.  In Dunderdale’s case, though, it isn’t a question of understanding anything except that this deal is done.

Period.

When Danny announced it, nothing could stop it.

There are no more decision gates.

There are no off-ramps and no climb down spots.

Once Danny announced this project and cabinet backed it in November 2010, they put us all on a non-stop march to debt.

The Tories are impervious to logic.

None can penetrate.

They cannot be dissuaded.

CBC cornered Danny Williams somewhere on Friday and asked him about the critics.  Williams said that when he put this deal together, Williams got the top minds to work it out.  This deal must be perfect one can take from that.  And since Williams had only the best, all others must be inferior creatures.  The decision is already perfect.

Such is the delusional world, the blind world, the supremely arrogant world in which he and his heirs live.

So far removed are Williams, Dunderdale, Jerome Kennedy, Shawn Skinner and the rest of the Muskrat mafia from reality that they cannot see the pure insanity of the claim that their primary focus, as Dunderdale put it, is keeping energy prices low.

Feehan’s paper, as the Telegram editorial quoted, uses figures that translate out to an increase in electricity prices from 10.5 cents per kilowatt hour to 13.5 cents per kwh, all without Muskrat. he was talking about the price consumers pay.

Even if we accept the wildly unrealistic assumptions Dunderdale and company are using for Muskrat Falls, their own numbers show that the cost of making electricity at Muskrat Falls will be at least 14.3 cents per kwh and as much as 16.5 cents. 

That isn’t the price consumers will pay.  They will have to pay for Muskrat Falls, plus all of Nalcor’s other operations, plus newfoundland Power’s costs of distribution and a healthy profit to both.

If those Nalcor assumptions about project costs – a mere 15% over-run, for example – turn out to be as ludicrous as experience suggests they are, then you can be damn certain that consumers will be paying way more than 16.5 cents per kwh just for Muskrat Falls.

If Ed Martin explained his Muskrat Falls plan to his father and then laid Jim Feehan’s idea in front of him, you can bet which one Martin Senior would jump at. 

The logic isn’t hard to follow. 

The math is actually pretty easy.

If Ed were to add that the Williams/Dunderdale/Martin idea was to trade away possible high electricity prices for guaranteed high ones, then Ed’s Dad would probably keel over.

Williams, Dunderdale and Company want to make sure that domestic electricity prices in Newfoundland and Labrador are the highest, not the lowest. That’s what their own information says.

It’s like Tom Marshall’s claim that he wants to fight the public debt. And his way of doing that is  - in effect – to double the debt by building Muskrat Falls.  That’s the only conclusion you can reach from their own information.

Its proponents would have you believe that Muskrat Falls is the divine wind that will save us all.  The reality is that the project looks like a kamikaze of a different sort altogether.

- srbp -

Related:

Hold off on the Lower Churchill, James Feehan, National Post, (January 2012):

“Apparently, the province is unconcerned that pushing ahead, as opposed to waiting for a more comprehensive report, might hurt the credibility of the PUB assessment itself. Now, doubts about the project have company: doubts about the process.

The way forward is clear: At the very least, Newfoundland and Labrador should hold off on the Lower Churchill until a better set of facts is in front of the public, and the legislature. And the province would do well to take the time to ponder a broader set of options, including setting better energy policy. Muskrat Falls will wait, and a wider set of long-run options, including a transmission corridor that better serves provincial and pan-Canadian needs, will present themselves in due course.”

Williams announces political exit plan  (October 2010):

“It gets better. Weak electricity prices coupled with the front-end loading of capital on Muskrat Falls would likely mean power sent to Nova Scotia, New Brunswick and the United States could only sell at heavily discounted prices. Even Muskrat Falls power at a break even price would likely be too expensive for the markets to bear.   That’s an old and fundamental problem with trying to sell Labrador power so far away from Labrador.

No problem for NALCOR, these days. Thanks to changes made to the Electrical Power Control Act in 2006, the Hydro Corporation Act, the Public Utilities Act,  and government policy, NALCOR wouldn’t suffer any losses. The company can export all the discounted power it wants  knowing that the people of Newfoundland and Labrador will wind up paying for it.”

Debt, electricity rates and Muskrat Falls  (August 2011)

Muskrat falls deal will succeed:  Nalcor boss (December 2011)

The New Hebron-Muskrat Falls Connection #nlpoli

Natural resources minister Jerome Kennedy is right:

“There's obviously an obligation…on any member in this house when presenting a petition to ensure that accuracy, to ensure that statements made to this house are ones that can be relied on ... This is a very serious matter."

The obligation for accuracy doesn’t just apply to petitions.  It applies to everything a member of the legislature says.

And if the member of the House is also a cabinet minister or the Premier, then the obligation for accuracy goes up another few notches.

Perspective #nlpoli

Premier Kathy Dunderdale likes to pretend that the critics haven’t been able to find a problem with Muskrat Falls.

Well, that’s simply not true. 

They’ve found tons of problems with the project that Kathy Dunderdale is finishing on behalf of Danny Williams.  Dunderdale either doesn’t understand the project at all on any level,  has deluded herself into believing what she says is true even when it obviously isn’t (the PUB loves Muskrat Falls!),  or she just doesn’t give a rat’s bollocks about anything. 

That’s pretty much what it comes down to.  Take your pick but that’s it:  one of those three

Regardless of any of that, though, you can be assured of one thing.  Muskrat Falls is not a very good idea.  It is not the lowest cost option for taxpayers. 

Absolutely. 

Without question. 

Not the lowest cost option.

Paying for Muskrat Falls #nlpoli

To understand precisely how insane an idea we have at Muskrat Falls, think of it this way.

In Quebec,  provincial government policy is to maintain a pool of electricity that is very cheap to produce.  This is for use inside Quebec so that the people of Quebec always have really cheap electricity.

In Newfoundland and Labrador,  provincial government policy is to force local consumers to pay double their current low rates in order to pay for Muskrat Falls.  Nova Scotians get a block of power for free and access to an additional quantity of power at Nova Scotia market rates, which are far less than Muskrat Falls will cost local consumers.  If they can sell any other electricity,  they will but again,  the cost will be subsidized by the people of Newfoundland and Labrador who are paying the whole cost plus profit.

This isn't new.  It has been the case since before Danny Williams announced his retirement scheme called Muskrat Falls.  Your humble e-scribbler pointed out the subsidy insanity before the announcement.  Williams and Nalcor boss Ed Martin confirmed it when they unveiled the Muskrat Falls project.

High Politics and Muskrat Falls #nlpoli

“[M]ega-projects”, writes political scientist Will Jennings,” exhibit a ‘performance paradox’ …being prevalent and popular among planners despite suffering from extremely poor track records in terms of completion times, cost escalations and shortfalls in projected revenues and economic benefits.”

Jennings looked at several projects to see why the projects tended to take a long time to finish or experienced huge cost over-runs or generally didn’t live up to expectations.

This week SRBP is looking at Muskrat Falls using Jennings’ four categories of factors that affect project performance.  The first of these is “high politics”.

Magical Thinking and the Muskrat Falls Tax #nlpoli

Muskrat Falls seems to be intimately connected to magic, at least in some people’s minds.

For a while there, the gang at Nalcor sounded like they had found a way to make electricity and then ship it back upstream to Churchill Falls where it would be converted back to water. Sort of a water to wine to water miracle.

Not surprisingly, it turned out to be crap.

The War of the Flea Circus #nlpoli

Muskrat Falls has become a three-ring flea circus.

In the first ring, we have the political ambulance chasers, a.k.a. Maudie Barlow and the Council of Xenophobes. The Safari Saviours rolled into town last week, issued a fill-in-the-blanks news release, and then frigged off having successfully tutted a few tuts and gained the media coverage they wanted,.

They, at least, want to end the project, which is more than you can say for the folks staging all sorts of protests here and there.  The folks in the third ring are likely the majority of folks in the province. They want Muskrat Falls finished,  no matter what the cost.  The only difference between Gil Bennett and Bill Gauthier is that Gil actually wants to spend less public money on a project that never made any sense at all.

In the centre ring of the circus we have the province's New Democrats and the self-described "progressive" white folks in the south.  The Dippers sent a letter to the Premier on Monday demanding that he open the House of Assembly "forthwith" in order to give the circus a bigger stage.  Make no mistake,  the Dippers don;t want to stop the project either.  They just want to slow things down a bit.  The NDP, like the Liberals and Conservatives and the overwhelming majority of people in the province want Muskrat Falls at any cost.

The Dippers, like some others, just want you to think they are against the project.  That is the flea in our flea circus.

And that, of course, is the flea in our circus.  It is the thing people insist is there  even when it obviously is not.

Debt, Demand, and Delusions #nlpoli

The Conservatives running the province got together with their staff and key supporters this weekend to reaffirm their conviction that they alone ought to be running the province.

Some people seem to think it’s remarkable that they stand together behind Kathy Dunderdale and her supposed wonderful charm, despite what the polls says.

There’s nothing remarkable in it at all.  People in power have a hard time understanding it when the voters turn on them. They carry on with their schemes, convinced in their own rightness.  It’s a form of self-delusion.  It’s what the mind does to help people cope when what they believe and what is true are two radically different things.

Not talking but talking about something #nlpoli

It took them a few days but the folks at Nalcor managed to put out a statement that addressed the possible talks with Hydro-Quebec about the Lower Churchill.

They didn't post it to the Nalcor website or anything but a few people were flicking it around on Tuesday.  They must have tweeted it out or something.*

Anyway, here is a picture of it.

Now we can see what it says, line by line.

The Language of Newfoundland Politics #nlpoli

Some of you may have noticed a couple of words turning up in any discussion of Muskrat Falls.

One is “confused”.

The other is “tired” as in tired of hearing about it.

These are very interesting code words, once you realise what they mean.

Putting the sunk in sunk cost #nlpoli #cdnpoli

Muskrat Falls is basically an $800 million tax on the people of Newfoundland and Labrador. That's roughly the amount you get using numbers Nalcor chief executive Stan Marshall made public last summer.

Muskrat Falls is a tax on the people of Newfoundland and Labrador.  Always was that.  Never was anything else.  The plan was to collect the tax by doubling electricity rates.  Regular readers have known this since *before* Danny Williams announced the scheme.

Take all that as the starting point when you hear Dwight Ball tell Anthony Germain on the CBC St. John's Morning Show that Ball is spending a lot of time trying to figure out how to keep our electricity prices from doubling.

The Secret of Their Distress #nlpoli

Not content with just one round of fascinating public opinion information, NTV decided to unleash a second evening of news about how the public feels about Muskrat Falls.

The responses are based on the same panel conducted for NTV by MQO and first reported on Tuesday.

Let’s take a look at the results, as reported, and then make some observations.

The PUB, Exemptions, and Muskrat Falls #nlpoli #cdnpoli

Here’s some background on the issue of Muskrat Falls and Public Utilities Board exemptions. 

At the end you should know what an exemption is all about, how the exemptions – there are more than one – came about – and what that means for now and in the future as far as electricity rates go.  We’ll deal with mitigation in another brief post next week.

The information here is based on material in the public record plus additional research and information accumulated over 30 years working on public policy issues in the province. That includes the 15 years of SRBP, much of which wound up being about the Lower Churchill project.

Let’s start with what an exemption is.

The Dangers of Being a Mythbuster – 50 is the new 70 #nlpoli

Look around and anyone can find a huge amount of information about Muskrat Falls and electricity in Newfoundland and Labrador.

For all that, though, there is a great deal of misinformation out there.  That only adds to confusion some people are experiencing.  As disappointing as it is, misinformation remains a fact of life in the Muskrat falls discussion.

As a couple of recent posts have shown, some of the misinformation turned up in a single online commentary recently posted. Something good can come out of everything, as it seems and so this third post corrects the misinformation and replaces it other issues and more substantive information.

20 Answers to the Telly’s 20 Questions (Part 1) #nlpoli

On October 19, Russell Wangersky wrote a column for The Telegram entitled "20 questions for the premier." Mr. Wangersky posed questions about the development of the Muskrat Falls project.

On November 9, Premier Kathy Dunderdale replied.

Unfortunately, the Premier did not provide much factual information. In the interest of informing Newfoundlanders and Labradorians on this important issue, here are 20 clear answers to 20 clear questions. The information presented here comes from the provincial government and Nalcor as well as publicly available information, such as  electricity markets across northeastern North America.  The post includes links to background information.

Terawatts for Terra Nova and other fun #nlpoli #cdnpoli

Energy analyst Tom Adams points to some problems with the Muskrat Falls project and, in the process,  turns out one of the biggest bits of critical commentary on Muskrat Falls in a while.

You know because the good folks at Nalcor took the time to write a post for their corporate blog that responded to the Adams piece.  Nalcor CEO Ed Martin wrote at the beginning:

I'm compelled to correct the statements made by you, and request the prompt apology you said you would make if your arguments were wrong.

“Correct the statements.”

Remember that phrase.

Ed Martin made the rounds of the local call-in shows, especially the unquestioningly government-friendly afternoon one. No accident that. The Telly ran a story on Tuesday. NTV ran it on Monday night as a blog fight. 

The funny thing is that Ed Martin didn’t actually correct anything.  Sure he claimed that Tom Adams didn’t get his facts straight.  Sure Martin claimed Adams didn’t cover all the information.  After all, there are hundreds of thousands of pages. 

Persuasion by the ton

You can tell this point, the amount of information Nalcor has pumped is so important – and convincing – because Martin and natural resources minister Jerome Kennedy and just about anyone else backing the project will point you to the boxes of documents like they are auditioning for a shot to replace Vanna on Wheel. 

There is all this information, they will say.

Surely we must be absolutely correct in all our claims because there is this pile of  paper.

Try and lift it.

We dare you.

Can’t? 

Then we must be right.

How much weight is it?

A shitload, for sure.  Some people don’t recognise that one shitload is  the average monthly output of “Minister paves road in district” or ”Premier hands out keys to new fire truck” new releases from a typical provincial government department.

One shitload. 

It’s the internal performance measurement for promotions and bonuses in the public service:  “Nelson produced 13 shitloads of happy-crappy releases this year instead of the quota of 12 usually produced by departments of this size.”

It could all be meaningless garbage that no one understands, but that isn’t important in government circles.

Government types measure persuasion, like work: by weight.

But all that is digression…

Your humble e-scribbler has already demolished Ed Martin’s suggestion that the Smallwood reservoir is really there to feed Muskrat Falls. The actual words on the water management agreement as well as 2007 amendments to the Electrical Power Control Act make that pretty clear.

So what about the other big issue, the question of energy from Muskrat Falls? 

How much will there be?

Terawatts for Terra Nova

According to Ed Martin:

Muskrat Falls will generate 4.9 terawatt hours of energy per year.

Adams comes at it another way in his first post.  He looks at a graph of water flows in Nalcor’s own environmental impact study and draws his conclusion:

My area under the curve estimate of the average production rate over the year is 577 MW (taking into account the nameplate capacity). Assuming a theoretically perfect 100% load factor, this corresponds to 5.05 TWh of production — i.e. pretty close to the project estimate of 4.9 TWh of production.

Adams actually gives Muskrat Falls with credit for slightly more energy (5.05 TWh) than Ed Martin does (4.9 TWh) if the water flows are right. No conflict or contradiction there. So let’s take that and work with it.

Terawatts and megawatts and martins:  oh my!

Some of you have no doubt noticed Tom Adams used a figure of 577 MW while the official rating for Muskrat Falls is 824 MW of installed generating capacity.  That comes from installing four generators each with a rated capacity of 206 MW.

Four times 206 is 824.

Simple math.

To figure out the terawatt hours per year involved, you need to multiply that 824 by the number of hours in a year (8760).  So theoretically, if you ran Muskrat Falls flat out all year, the plant should crank out 7.0 TWh.  That’s what you get when you multiple 8760 by 824.

But Muskrat Falls will produce 4.9 TWh according to Ed Martin.  We can also use another Nalcor figure of 4.5 TWh.  Divide that by 8760 and you get rough numbers to compare megawatts, in this case 570 or thereabouts

How does that compare to Holyrood?

According to Nalcor, Holyrood has generators that cumulatively produce 490 MW.  That gives us a theoretical maximum energy output of 4.3 TWh.  Nalcor’s numbers for Muskrat Falls - 4.5 and 4.9 TWh – are only  marginally above what Holyrood does.  To a layman, like your humble e-scribbler, that looks like Muskrat Falls doesn't push out much more than Holyrood, despite the difference in installed capacity.

Now check out the Nalcor’s own water flow chart.  It is based on average monthly flows. 

The period when Nalcor will need water the most to feed domestic demand and at the same time feed Nova Scotia just happens to be the same time when average monthly water flows on the river are lowest.

Now this is not a question of whether they need new water studies or not.  This is also not about the water management agreement. It’s about when the most water is available to make electricity compared to when Nalcor will need to make electricity the most.  They don’t match.

Could it be possible that Nalcor missed something that important?

- srbp -