Lower Churchill deal a giveaway: Liberals

Dave Bartlett
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Premier has trouble with leader’s math

The province’s Liberals want more information about the Lower Churchill deal to develop Muskrat Falls.

In the House of Assembly Monday, interim leader Kelvin Parsons asked Premier Kathy Dunderdale what the $143 per megawatt hour cost of Muskrat power includes.

“Will the premier provide us today with a breakdown of that cost? Does it include, for example, transmission cost and financing cost, or any other associated cost?” he asked. “Is that $143 just the charge for generation of the electricity at Muskrat Falls, or is that the end cost to the consumers in their homes?”

Complex proposal

Dunderdale said when she talks about costs, she talks about the total costs of the project and she acknowledged the details of the deal are complex.

“If it would help the members opposite understand what we have agreed to with Emera (Energy) better, then I am prepared, Mr. Speaker, to talk to Nalcor and to the Department of Natural Resources to prepare further briefings for the members of the Opposition,” she said.

But Parsons suggested the Liberals couldn’t trust the governments briefings.

“The premier is reluctant to tell us exactly how it is broken out. Do you notice that? Pretty cagey. She does not say exactly how it is broken out here, and what it is going to cost the rate payers,” he said.

The Liberals suggest the deal could end up costing the people of the province higher electricity bills for years to come.

Dunderdale then tried to break down the numbers.

She said $143 per megawatt hour includes construction of the dam at Muskrat Falls, and the transmission costs to, and throughout, the island.

“That is what’s included to bring power from Muskrat Falls to offset Holyrood, and once we take all of those costs into account, Mr. Speaker, we arrive at the sum of $143 per megawatt hour,” she said.

Brings up past deal

Parsons then brought up the deal to develop the Upper Churchill, calling it one of the worst in the province’s history.

“In light of our history with the Upper Churchill, why is government agreeing to give Emera Energy of Nova Scotia free power for 35 years?” he asked.

“Not only are (the taxpayers) going to be put on the hook for the $4.5 billion (to develop the Lower Churchill), which gets added to our public debt, but we are also financing it through higher electricity rates in their homes. Why the sweet deal for Emera, I say to the premier?” said Parsons.

Dunderdale fired back.

“How $1.2 billion translates into zero dollars for electricity is something that I am unable to wrap my mind around. Mr. Speaker, we have costed the power we are selling to Emera at $95 per megawatt hour, escalating to $125 over the 35 years. Mr. Speaker, that works out to be $1.2 billion,” she said.

“What we have said to them is, instead of giving us the $1.2 billion over 35 years, give it to us all now, we will build the Maritime link with it now, and we will save the people of Newfoundland and Labrador hundreds of millions of dollars in financing costs by doing it that way.”

Parsons called that spin.

Outside the House, he used one of the government’s mantras against it.

“This is a government that always talks about no more give aways,” he said. “I think this is a perfect example of another give away.”


Organizations: Department of Natural Resources

Geographic location: Muskrat Falls, Nova Scotia, Newfoundland and Labrador

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Recent comments

  • John Smith
    December 13, 2010 - 08:12

    Well, la la LLoyd, I should have said grid, not national grid sorry. The problem with Labrador is a few tiny communities spread out with a few thousand people, and little infrastructure. Right now Labrador is experiencing unprecedented levels of spending, much more than a group of 25,000 shoud get. New schools roads and hospitals, all due to offshore oil. We as a province get very, very little from labrador, most of the wealth goes to multinational giants like rio tinto, and vale etc. The gov is spending close to 3 million on finding small hydro projects for coastal lab. and has a recall provision for lower churchill power. So if you can come up with a business idea la la lloyd, i'm sure you'll get all the power you need.

  • Lloyd
    December 09, 2010 - 15:25

    John Smith: "All the while electricity prices here on the island will go up, and up, and up and up. For some reason the masterminds of the Liberal party, the danny Dumberesques, and the Roger Grimes don't seem to get this fact. ....... our electricity prices are going to go through the roof. With this project we will finally be connected to the national grid, ....." ==== Your concern regarding electricity prices is quite understandable. How do you square those concerns with the fact that there is NO plan, No intention to share some of this electricity with the very people who live on the land where this power originates? High prices, low prices.... doesn't matter, if this plan goes through, Coastal Labradorians will never be able to heat homes, build business, attract industry with this power - while those hundreds, thousands, of kilometres away will be able to do just that. We should all find that incredible. Oh, and there is no 'National' grid.

  • John Smith
    December 08, 2010 - 14:37

    You see, if the Liberals were in command they would simply sell the power to Quebec for whatever Quebec wanted to pay, and that would be it. All the while electricity prices here on the island will go up, and up, and up and up. For some reason the masterminds of the Liberal party, the danny Dumberesques, and the Roger Grimes don't seem to get this fact. Whether or not we go ahead with this project our electricity prices are going to go through the roof. With this project we will finally be connected to the national grid, and because it is hydro prices will stabalize in the long term. This project is our only hope of getting connected to the grid, it is a great project.

  • Randy
    December 08, 2010 - 10:40

    Almost 5billion added to the debt.,,our light bills about to double,a transmission line smack dab in gross morne..This place may not be my place of retirement as i was hopeing and it's all because of this arrogant dictator Danny..I bet you all he'll be on the board of emera soon collecting his million,that he will have ripped off from the nl tax-payer

  • J.T.
    December 08, 2010 - 06:50

    I fully expect the government to promote the proposal and the opposition to give the proposal a thumbs down. I will reserve judgement on this proposal for an analysis from an IMPARTIAL soursce.

  • George Burden
    December 07, 2010 - 15:50

    Without seeing a cost proposal and revenue sharing how can anyone give a business decision. This is after all a business proposal between two provinces (so far) and I fail to see where or if the Feds are considered in this GREAT development. Maybe somebody in control should go through their BUSINESS 101 again. Please lets not get involved in another Quebec shafting us without being kissed. Forget the kissing part and lets get down to some straightforward business negotiating.

  • Scott Free
    December 07, 2010 - 14:30

    There is no deal; good or bad. Danny didn't negotiate a lands claim settelment with the Innu; there was no environment assessment done; the Feds did not commit any money to the project; and, there are no major clients under contract. At best, there's a written handshake by way of an MOU just to let Danny ride off into the sunset and been seen as a hero by his blind faithful. Don't you see, its all smoke and mirrors by King Danny; and the Tory Koolaid crowd gulped it all down again. Good riddance to bad rubbish.

  • Roxanne
    December 07, 2010 - 13:27

    Yep, the Liberals would know all about giveaways!!

  • Dave
    December 07, 2010 - 11:01

    I would still like a detailed comparison between this deal and the one Roger Grimes had proposed. I still don't know how our province can sell hydro cheaper than Quebec and it was already stated by Blunderdale that Emera was paying more for our hydro from us than what Quebec was selling theirs for. I think we're in for a bumpy ride with this government and the poor people will suffer for it.

    • penney
      December 07, 2010 - 18:57

      Why does the power produced have to the cheapest on the market in order for it to be economical? This project is still economical even if it is more expensive per kilowatt. The Liberals also forget that Muskrat Falls will put in place infrastructure that will be used by Gull Island and make that project more economical. This is a long-term investment for the future. BTW, who's complaining if Emera is willing to pay a premium compared to prices that HQ is getting for long-term contracts?

  • Cyril
    December 07, 2010 - 09:57

    Parsons has reached conclusions even though his questions to government have yet to be answered. So Parsons has already made up his mind in the absence of any answers or facts. If this is what we can expect from the westcott Liberals, then it is game over.

  • Graham
    December 07, 2010 - 09:43

    It's too soon Kelvin, you're shouting into a storm, just wasting your breath. You have to let this sit for awhile, let the media pick at it and then, months down the road, scream 'give away'.

  • McLovin
    December 07, 2010 - 09:13

    Folks Folks, relax, this "deal: isnt going to happen anyway. First of all we don't have the money to do it on our own. Second of all, if any of you think that the Federal Government is going to agree to lend us the money, you are living in a dream world. There's a federal election looming and if you think Quebec and all the political parties aren't going to make this a major election issue, you need to wake up! Quebec will get their way because at the end of the day, they grossly out-match us and the rest of Atlantic Canada when it comes to seats in power/political clout.

  • Penney
    December 07, 2010 - 08:25

    The Maritime Link will enable over 300MWs beyond what Nova Scotia gets to be exported from the province. There's a big advantage to having that link and Emera's infrastructure made available all the way through to Maine.

  • Colin P.
    December 07, 2010 - 08:11

    In actual fact, Emera is contributing almost $2 billion toward construction costs plus 20% of operating costs each and every year. How someone could say Emera is getting something for “free” is simply mind-boggling. Only a Liberal would say something silly and foolish like that. No wonder NL almost went bankrupt under the previous Liberal government, in which Mr. Parsons was a cabinet minister.

  • badameli
    December 07, 2010 - 08:10

    Actually the present value of 1.2billion dollars over 35 years is much higher, when you estimate inflation. This just reeks of politicizing a provincial business opportunity and the opposition party trying to jam something in the wheels of the engine so they can make sure they get some credit too. @ 2% inflation 1.2bn*1.02^35 = 2.399bn (of course that's assuming all the money were to be spent in the 35th year), but it should illustrate the point that by getting your payment up front the value of what you are getting is actually greater. Also - we should have a working hyrdo electric dam in 35 years, wholly owned by NL & Lab. It might be too long a time for those in their 60's, but that doesn't mean that as a society we shouldn't be planning for future generations.

  • james
    December 07, 2010 - 08:03

    williams wanted to put it to quebec i could use another term but it would not get printed

  • George M
    December 07, 2010 - 07:56

    Obviously, an analysis by Craig Westcott, who no longer has a reason to hate Danny Williams because Williams is not there.

  • Calvin
    December 07, 2010 - 07:53

    Again people, short term loss for long term gain. Do you think the fuel used to power the Holyrood station is free? No, it comes out of provincial coffers. So if we can nullify that cost by bringing on another one, how are we putting the province in debt? If it takes 30 or 40 years to pay for this deal, and then Newfoundland & Labrador reaps the benefits once the initial cost of setup for the dam and transmission lines have been payed, isnt that a step forward? Not to mention the cleaner form of energy we will have by stopping use of the Holyrood station. It is going to cost the province over 4 billion to bring this project into affect, of which Emera is contributing 1.2 billion. So the province is down to around 3 billion already, but yeah, we are giving the power away. The Upper Churchill is giving Quebec massive income for what, 80-90 years? So yeah, I can see how the 35 years of clean power that Nova Scotia is getting is such an outrage. I imagine you people run your lives the same way you figure the government should run, get us what we can right now and the generations to come be damned. Get your heads out of the sand people, this is nowhere near the terrible deal signed by Joey and his gang, and comparing it to that deal shows how ignorant you actually are.

  • Shannon Reardon
    December 07, 2010 - 07:35

    I love how Danny packed it in so as not to take the heat!

  • Willi Makit
    December 07, 2010 - 07:19

    So let's get this straight: Muskrat Falls power will cost at least 14.5 cents per kilowatt hour and we're selling it to N.S. for 9.5 cents ''escalating to' 12.5 cents per kwh. Government wants to sell the power for less than the cost to produce it. It's a good thing this government wasn't around when the original Churchill falls deal was signed, it would have been worse than it is. I didn't think that was possible. Can someone explain why are we going into debt over this dam?