Hydro assets should benefit region, ex-Abitibi executive says

Terry Roberts
Send to a friend

Send this article to a friend.

A former executive with the paper mill in Grand Falls-Windsor says the hydro power that once energized the facility should be used to help central Newfoundland recover from the loss of a century-old industry.

In a column published Thursday in The Advertiser, and reprinted in today's edition of The Telegram (see page A6), Roger Pike said profits from AbitibiBowater's power assets should be placed in an economic development fund and managed by a board of trustees controlled at the local level.

Former AbitibiBowater executive Roger Pike walks past the newsprint mill in Grand Falls-Windsor in this file photo. Photo by Sue Hickey/Transcontinental Media

A former executive with the paper mill in Grand Falls-Windsor says the hydro power that once energized the facility should be used to help central Newfoundland recover from the loss of a century-old industry.

In a column published Thursday in The Advertiser, and reprinted in today's edition of The Telegram (see page A6), Roger Pike said profits from AbitibiBowater's power assets should be placed in an economic development fund and managed by a board of trustees controlled at the local level.

"The goal of this board of trustees would be a simple one. They would provide incentive to attract new business to the entire region," Pike wrote.

The company's hydro assets were expropriated by the provincial government in December following the company's decision to close the mill, resulting in the loss of some 750 direct jobs.

Pike estimates profits from the sale of this electricity to the provincial power grid at $15 million annually.

"This is a solution which returns the benefit of the power once used to make paper ... to the residents of central Newfoundland," said Pike, who worked at the mill for 26 years as head of government and community relations.

He said such a fund could be an "economic development engine for our region."

There has been mounting frustration in the central region about how the power will be used. Premier Danny Williams and other government officials refused comment Thursday.

"Until discussions between government and Abitibi come to a conclusion, we will not be commenting on related issues," a spokeswoman for the premier stated in an e-mail.

Grand Falls-Windsor Mayor Rex Barnes said town officials have been quietly lobbying the provincial government for an arrangement similar to that proposed by Pike.

"We believe that's the way to go," Barnes said, adding that the area adjacent to the hydro resource should be the primary beneficiary, similar to principles that have been touted in the fishery for many years.

With his inside knowledge of the operation, Pike offered a detailed breakdown of how such a scenario could unfold.

He said the company used 54 megawatts from its hydro stations on the Exploits River to power the mill. He estimates the power could fetch at least 7.5 cents per kilowatt hour, resulting in annual revenues of $35 million.

The province's energy corporation, Nalcor, will officially take ownership of these assets at the end of March, and Pike estimates the province will eventually pay AbitibiBowater upwards of $200 million in compensation for the expropriation.

After borrowing, operational and investment costs are deducted, Pike estimates the yearly profit from this power at $15 million.

These profits could soar once the borrowing costs are repaid, Pike explained.

He referred to this as a "major prize" at the end of a painful chapter in the region's history - the loss of the paper mill.

"There is now an opportunity for an outcome that positions this region for a solid future without AbitibiBowater as the cornerstone," he wrote.

He said such a scenario could work with the right direction from the provincial and municipal governments.

"Now is not the time for counterfeit leadership," he said.

troberts@thetelegram.com

Organizations: The Telegram

Geographic location: Abitibi, Newfoundland, Grand Falls Exploits River

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments

Recent comments

  • Lloyd
    July 02, 2010 - 13:32

    In a column published Thursday in The Advertiser, and reprinted in today's edition of The Telegram (see page A6), Roger Pike said profits from AbitibiBowater's power assets should be placed in an economic development fund and managed by a board of trustees controlled at the local level.

    Amazing, amazing.
    As odd as this might sound to those who happen to agree and have made positive comments on this article, so far:
    This idea, expressed here is pretty much exactly one of the ideas in a nutshell of the position of the Combined Councils of Labrador in their position paper developed for the provincial government several years ago.
    The Labrador Party proposed a similar idea (among other ideas) regarding Hydro, and other developments and resource extraction in Labrador.
    Other development groups have expressed very very similar ideas over the past many years.
    How could I not support such an idea? Anything other than local resources benefiting local people first and foremost smacks of the dirty old word colonialism.
    Before anyone gets excited none of the above does not mean not sharing after local needs/requirements are met.

  • Akbar
    July 02, 2010 - 13:26

    I'm a NASA scientist living in the woods in a log cabin with ZERO overhead, living on the cheap. I'm waiting for government to create some employment for me because I'm not moving to find a job in my field just because there's none here for me right now. I'm putting the onus on government to solve my income problems so I can continue to live where expenses are extremely low.

  • Guy
    July 02, 2010 - 13:26

    This sounds like an idea worthy of public debate, especially residents of the area. The debate should expand to include community development of potential hydro development sites adjacent to many communities in our province. It is all about sustainability.
    Let's revisit the energy plan.....is it Nalcor's plan, or the goverments, or the residents?

  • Tim
    July 02, 2010 - 13:26

    This is the first positive presented by anyone. Maybe it is time that the people effected had a say for a change. They seem to have everyones best interest in mind with this plan.

    For once someone did a little thinking of others rather then themselves. Maybe this way of thought should trickle down to government as well.

    Thank you Roger, it shows that the people really are the answer to the future and not government.

  • DB
    July 02, 2010 - 13:16

    I would assume that the 'profits' would be first used to pay for the expropriation.

  • Richard
    July 02, 2010 - 13:15

    Ironic that someone from big, bad AbitbiBowater would be the guy standing up for the people. Won't be long before someone at Confederation Building tells us he's a 'traitor' or some such foolishness.

  • Eugene
    July 02, 2010 - 13:14

    I agree that profits should first pay for the expropriation.

    Are the local communities willing to purchase the assets which would then give them rights to the profits?

    If not, there are precedence issues here. Does every region of the province then expect government to cover investment costs so they can claim the profits? If they want to own the profits maybe they should put up the money to buy the assets. Otherwise it should rightfully go to the investors (the province), as is done with resources in other regions.

  • Melvin
    July 02, 2010 - 13:12

    I'm in total agreement, that the Hydro resource should benefit the region; OR do what is proposed with ours.. Build a dam, and put it on the Grand River Grid that leaves Labrador and send it back to enable infrastructure in Labrador. Sounds ludicrous?? I agree.

  • Lloyd
    July 01, 2010 - 20:21

    In a column published Thursday in The Advertiser, and reprinted in today's edition of The Telegram (see page A6), Roger Pike said profits from AbitibiBowater's power assets should be placed in an economic development fund and managed by a board of trustees controlled at the local level.

    Amazing, amazing.
    As odd as this might sound to those who happen to agree and have made positive comments on this article, so far:
    This idea, expressed here is pretty much exactly one of the ideas in a nutshell of the position of the Combined Councils of Labrador in their position paper developed for the provincial government several years ago.
    The Labrador Party proposed a similar idea (among other ideas) regarding Hydro, and other developments and resource extraction in Labrador.
    Other development groups have expressed very very similar ideas over the past many years.
    How could I not support such an idea? Anything other than local resources benefiting local people first and foremost smacks of the dirty old word colonialism.
    Before anyone gets excited none of the above does not mean not sharing after local needs/requirements are met.

  • Akbar
    July 01, 2010 - 20:14

    I'm a NASA scientist living in the woods in a log cabin with ZERO overhead, living on the cheap. I'm waiting for government to create some employment for me because I'm not moving to find a job in my field just because there's none here for me right now. I'm putting the onus on government to solve my income problems so I can continue to live where expenses are extremely low.

  • Guy
    July 01, 2010 - 20:13

    This sounds like an idea worthy of public debate, especially residents of the area. The debate should expand to include community development of potential hydro development sites adjacent to many communities in our province. It is all about sustainability.
    Let's revisit the energy plan.....is it Nalcor's plan, or the goverments, or the residents?

  • Tim
    July 01, 2010 - 20:12

    This is the first positive presented by anyone. Maybe it is time that the people effected had a say for a change. They seem to have everyones best interest in mind with this plan.

    For once someone did a little thinking of others rather then themselves. Maybe this way of thought should trickle down to government as well.

    Thank you Roger, it shows that the people really are the answer to the future and not government.

  • DB
    July 01, 2010 - 19:56

    I would assume that the 'profits' would be first used to pay for the expropriation.

  • Richard
    July 01, 2010 - 19:55

    Ironic that someone from big, bad AbitbiBowater would be the guy standing up for the people. Won't be long before someone at Confederation Building tells us he's a 'traitor' or some such foolishness.

  • Eugene
    July 01, 2010 - 19:53

    I agree that profits should first pay for the expropriation.

    Are the local communities willing to purchase the assets which would then give them rights to the profits?

    If not, there are precedence issues here. Does every region of the province then expect government to cover investment costs so they can claim the profits? If they want to own the profits maybe they should put up the money to buy the assets. Otherwise it should rightfully go to the investors (the province), as is done with resources in other regions.

  • Melvin
    July 01, 2010 - 19:49

    I'm in total agreement, that the Hydro resource should benefit the region; OR do what is proposed with ours.. Build a dam, and put it on the Grand River Grid that leaves Labrador and send it back to enable infrastructure in Labrador. Sounds ludicrous?? I agree.