Wheeling and Dealing

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More questions than answers about power deal

Tonight, CBC Here Now let me down.

There was incredibly effusive coverage of a major story, with no balance.

The program was quick to gush, and gush some more, about the premiers historic breakthrough, to wheel hydroelectric power through Quebec for sale in the New York markets.

The show opened with the exuberant, excited voice of Jonathan Crowe, saying:

Tonight powering up New York! Reaping the benefits of our hydro resources.

Cut to Premier Williams: Newfoundland and Labrador is now taking a bite out of the big apple.

Moments later, Crowe opens the item:

Theres a huge development in the provinces energy plans tonight. The Newfoundland and Labrador government has struck an agreement to sell electricity directly through Quebec and into the North American power grid.

Then he hands off to reporter Rod Etheridge:

Well, Danny Williams calls it historic. Never before has this province sold power from the Upper Churchill River directly to anyone other than Hydro Quebec. Its not about the power not about the money. This is a big deal because, for the first time since the switch was thrown on the Upper Churchill, power owned by this province will move through Quebec and into another market.

Then, another bombastic, overblown quote from the premier:

What we are talking about today is our future, and the future of generations who will follow us. Todays announcement gives one more step down that road.

Why they cut to such empty propaganda, when what we need is information, is beyond me. Then Etheridge offers more information:

Heres how it works. For 11 years the province has a had side deal with Hydro Quebec, to hold back some of the power from the Upper Churchill to use here at home, with any surplus amount sold back to Hydro Quebec. But the province asked Quebecs energy regulator for permission to sell the unneeded power to other markets. It agreed. So the province started shopping around, and struck a deal to sell it to a Nova Scotia power corporation.

Then, the premier again:

We understand power from Labrador today is being sold directly into the United States. Destination: New York. Newfoundland and Labrador is now taking a bite out of the big apple.

More fluff about how this is strategic, and part of the long-term plan, then back to Etheridge:

So tonight, as we speak, profits from the power used to light up a quarter of a million homes in New York are coming directly to this province. But as you can imagine, any deal this province strikes involving the Upper Churchill River and Quebec is bound to open old raw wounds. Some still see it as the ultimate giveaway. Well, Danny Williams is saying tonight that hes bound and determined not to repeat what he calls that mistake.

And that was it. Just when the item should have gotten down to business, it ended. What we have is a PR piece that couldnt have been better scripted by the premier himself.

Because, despite claims to the contrary, this is all about money. And there are some obvious questions that should have been asked, such as:

How much is Emera taking from this deal, as the broker?

And how much is Hydro Quebec being paid for the use of their lines?

Are we really any better off?

Why didnt the premier bring this information to the meeting? If its good financial news, why isnt he backing it up?

Later in the show, Glenn Deir presented another piece, but this was just as bad. In a nutshell, it said that previous premiers had failed, but Danny got it right.

In other coverage:

NTV did a decent job on the story. Off the top, they said:

Tonight on the NTV Evening Newshour Powerful deal. A first for the province. Were now selling electricity to the U.S., and reaping the benefits.

The story was set up by Lynn Burry:

The government says its making history. For the first time, a small amount of power from Churchill Falls is being wheeled across Quebec, with most of the revenue coming back to Newfoundland and Labrador. But already the announcement is causing an uproar from the Opposition, over whether it is really as significant as the government says it is

Then Michael Connors examined what the announcement really means, quoting the premier on statements of substance (rather than hyperbole), bringing in the Oppositions point of view, and examining the financial question.

It was a step in the right direction, and what I needed to hear. I did not need editorializing from the reporter, that this is not about the money.

It is always about the money.

Last night, on VOCM Nightline, Ryan Cleary got it right. In his opening monologue, he said, in effect, that the deal sounded fine but the big question is: are we any better off, financially? He asked many of the questions raised above. Ive criticized Cleary in the past, but on this point, he was right on.

During Nightline, Minister Dunderdale called, claiming that Newfoundland stood to make 40 per cent more money through this deal, rather than selling to Quebec. She sounded a little wobbly with this information, but hey, its something. The page one story in The Telegram is also fairly balanced. The opening line says, Premier Danny Williams called it historic, but both the leader of the Opposition and the president of the Newfoundland and Labrador Liberal Party aren't so sure. I hope they probe these questions more deeply in the days ahead.

This morning on the CBC Radio Morning Show, Jeff Gilhooly had a decent interview with Ed Power of NALCOR, with some new information. To summarize, because it sells power into the U.S., Quebec is bound by American laws that require open wheeling of power at all its borders, including its border with Labrador. Which raises another good question: how long has this regulation been in place? Should we have exercised this legal right back in 2004, when the last power sale to Quebec was negotiated? Were previous Liberal governments asleep at the switch, and didnt take advantage of this regulation?

Then, this morning, Roger Grimes comes on Open Line and says, because Emera is reselling the power at a profit, and Quebec is also taking its share, we are making less than we would through a direct sale to Quebec.

An intriguing claim, and it could be pure politics. But pure politics is not beyond Premier Williams either. Which is why these questions are so important.

One final note: Rod Etheridge is a very good reporter. I have written about him in the past, and he has just been short-listed for an Atlantic Journalism Award for his coverage of the Bell Island fire. He is sensitive, insightful and usually obsessive about detail. If asked if he was a friend of mine, I would say yes, though just casually. I hope this entry doesnt change that.

Postscript: Theres yet another interesting spin on this story over at the Globe and Mail, which I happened upon last night through Winstons Smiths excellent blog. Yesterday evening, the Globes headline was Quebec signs historic power deal. Interestingly, the headline was changed at 11:30 pm EST to: Newfoundland touts historic power deal with Quebec.

I expect the fact checkers at the Globe figured out, on reflection, that the deal was signed between this province and Emera, with a supporting role for Quebec. Anyway, the story offers yet another spin, courtesy of Claude Bchard, Quebec's Minister of Natural Resources:

Newfoundland and Labrador have finally come to the realization that it cannot seek federal funding to build a costly transmission line to bypass Quebec.

Quebec argued that if Newfoundland and Labrador wants to develop the Lower Churchill project they will need to play by the rules and use Quebec's transmission lines. But he said that once Quebec's 1,550-megawatt La Romaine project to be built at a cost of $6-billion is completed, there may not be room for Newfoundland and Labrador to export power on Hydro-Quebec's transmission lines.

Building another transmission line would be necessary and also very costly, ranging in the billions of dollars. But Mr. Bchard said nothing was excluded.

Everything is possible as long as everyone plays by the rules of the game. Quebec is well positioned to become the next Alberta and respond to U.S. President Barack Obama's call for greener energy from the North. We don't want to stop others to get into the market. As for other projects, our door is always open, Mr. Bchard said.

The Quebec government denied that in exchange for access to its transmission lines, the Newfoundland and Labrador government dropped its threat of legal action over a border dispute that could have delayed the La Romaine project. Mr. Williams said in February that there was no border dispute. For me it's a dead issue, he told CBC news in February.

So much intrigue and bafflegab. But in the midst of it all, some very important questions.

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Recent comments

  • W
    July 27, 2010 - 14:53

    Which raises another good question: how long has this regulation been in place?

    = = =

    Since the 1990s. That's on top of amendments to the National Energy Act in 1981 or 1982, either of which completely negates the myth that it's impossible to transmit power across another province.

    But who needs facts or analysis or other garbage like that, when there are myths, beautiful, fluffy, myths.