Muskrat is about just two questions: Dunderdale

James
James McLeod
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Muskrat Falls

When it comes to Muskrat Falls, Premier Kathy Dunderdale says people should only think about two simple questions.

"First of all, do we need the power?" she asked Friday.

"And the second question we've got to ask is: what's the cheapest way?"

Dunderdale was echoing Natural Resources Minister Jerome Kennedy, who said Thursday that the whole hydroelectric project boils down to the same two questions.

The government vehemently insists that yes, the province needs the power, and that independent assessments will prove that the Churchill River hydroelectric dam is the cheapest way to generate it.

"We can't buy it from Quebec any cheaper, we can't build it any cheaper, we can't bring it in from Nova Scotia any cheaper.

"That is the cheapest we can get it in Newfoundland and Labrador," she said.

Members of the Liberal Party - the project's loudest opponents - have disputed the answers to both of those questions. Critics have also raised any number of specific technical objections with the project and how the development deal is structured.

Most recently, project partner Emera said that energy prices in the 14-16 cent per kilowatt/hour range was too high, and they would never go forward with the project at those rates. The cost of power to Nova Scotia is expected to be much lower.

Dunderdale said the cost of Muskrat Falls power will mean that Newfoundlanders will be paying 14.3 cents for electricity when the project comes online.

"We're not going to get 10 cent power, but Nova Scotia may be able to get 20-cent power, or 11 cent power," she said. "They have transmission already in place. They have other things they can draw on that we don't have here in the province. So you're not comparing apples to apples."

Dunderdale also downplayed the significance of a delay on the project. A deal between Nalcor and Emera was supposed to be done by the end of November, but it has been pushed back until the end of January.

"It's more important to get the agreement right than to get them done on artificial timelines," Dunderdale said.

"That's our primary motivation, to get it right, every piece of this project."

jmcleod@thetelegram.com Twitter: TelegramJames

Organizations: Liberal Party

Geographic location: Nova Scotia, Churchill River, Quebec Newfoundland and Labrador

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Recent comments

  • Maurice E. Adams
    December 08, 2011 - 11:01

    FRED : you can't have it both ways. In Nalcor's July presentation, Nalcor's Historical Load and Demand Forecast was for the island's "total" load and demand. Again, Nalcor's Exhibit 16 (I think it is on the PUB website), Nalcor relies on the "total" load and forecast. And again, in Nalcor's Final Submission to the PUB, Table 20, page 51, Nalcor relies on "total" island load and forecast. And again, I think it is Exhibit 103 on the PUB website, Nalcor relies and the "total" load and forecast. Of course, now that there is no increase in the demand of industrial customers, you argue that it only residential customers that matter in the forecast (even that went down last year). If we only need to consider residential customers, then in that case why do Vale Long Harbour matter? If it doesn't, then we won't have a capacity deficit for about 200 years. The story keeps changing Fred.

    • Fred Penner
      December 10, 2011 - 06:25

      Think about the forest and not the trees. This developement is analogous to the province buying a house and it is going to take a few decades to pay for it. Unlike a house however, when it is paid for (in 30 years or so) it will be an extremely valuable asset for the province. There is another power plant on the south coast of the island called Bay d'espoir which also was amortized over 30 years (or so) but is now paid for.....you have to think long term....do you object to the deal to develope or the intention to develope?

  • Alan Hirtle
    December 07, 2011 - 19:31

    Interesting reading Newfoundlanders perspective on this important project. At least, Dunderdale will commit to 14.3 cents while Emera or Dexter won't dare tell us Nova Scotian's the true cost they intend to charge us. If this goes through, most of your power will be destined for the unregulated lucrative Maine market and is the ONLY reason Emera is trying to get their greedy fingers on it. Quebec has treated you very poorly with the Churchill Falls deal but Emera makes Quebec look good. Emera has repeatily lied, manipulated, and done whatever what was necessary to get their own way here to increase their profits and no doubt , are doing the same in your province. We hate Quebec Hydro almost as much as you do but most Nova Scotians would sooner buy their power from anybody ,even Quebec Hydro then from Emera. Nalcor has been convinced by Emera that there is money to be made with your surplus power in the States. Emera will undoubtfully cook the books like they have already done here and make sure that you will only get a pittance in return. That being said, Good Luck! We can't predict the future but after your Quebec experience, you should be more careful in picking your business partner. See http://www.cbc.ca/news/canada/nova-scotia/story/2011/10/31/nova-scotia-bahamas-emera.html

  • Maurice E. Adams
    December 06, 2011 - 14:35

    Fred, Perhaps Figure 5 (page 28 of Nalcor's submission) shows it better (but note that the Figure 5 graph do not show the 'actual' demand for year 2010. "Actual" demand numbers only go up to year 2009 and then what the graph shows for year 2010 is Nalcor's 'forecast' number which if I recall correctly is about 100 GWh too high (higher than actual).

  • Maurice E. Adams
    December 06, 2011 - 14:08

    Fred, Are you looking at the 'utility' part of the graph only? The total island demand shows virtually the SAME total demand in 1989 and in 2010 (about 7500 GWh). ++++++++ Year 2010 'may' be (and I am being generous here) a couple of GWh higher, so it is being generous to even say the demand is increasing at 0.1% per year (there is virtually no increase). Yet Nalcor is using a 0.8% average annual increase (8 times 0.1) going forward --- and up to year 2041, about a 1.2% increase.

    • fred penner
      December 06, 2011 - 15:56

      Yes, I am looking ONLY at the utility graph. As is explained in the forecasting methodology (p 26-27 or thereabouts), it is not appropriate to use the total island load in a forecasting capacity since there are only three industrial customers - the paper mills. Small changes in industrial load will have a disproportionate effect on total load as is obvious from the effects of mill closure on the total load. It is appropriate to use utility load as this is based largely on population growth and the penetration of electric heat. Utility load has increased by about 1.2% per year in the 20 years between 1990 and 2010.

  • Cyril Rogers
    December 05, 2011 - 13:05

    The Premier's logic on this project is totally bewildering. She states that we need the power from MF but how can that be when we are nowhere close to peak capacity, factoring in Holyrood as the major back-up source of power. Yes, I realize Holyrood is a "dirty" form of energy but it could be largely cleaned up for a tenth of the cost of Muskrat Falls. Alternatively, a brand new plant could be built to burn LNG, a product that is far cheaper than oil. The key point though is that we can develop other hydro power and wind power on the island of Newfoundland at a lower cost than Muskrat Falls, on a needs basis. We don't need extra power right now or for several more years, if ever. This gives us ample time to develop wind sources and put hydro conservation programs into place. If consumers had any incentive to help them, we could have net metering programs to go with conservation, and this would reduce our consumption levels even further. The biggest problem here is the lack of vision of the Premier and NALCOR, who seem to live and die by mega projects. This province will always be much more successful if we develop smaller sustainable resource projects rather than trying to hit a home run. This is not for our benefit: it is for Nova Scotia and the businesses who will make millions on the backs of the ratepayers of this province. One final thought: if MF is developed, we would use only 1 Terawatt per year to totally replace Holyrood and Nova Scotia gets 1 TW for free. That leaves about 6 or more TWs going unused but still having to be paid for. Guess who is going to pay? You and I! This is like turning up your heat in the dead of winter and leaving your doors and windows wide open. Even if Nova Scotia were to buy some of it, we would be selling at a tremendous loss for many years. In the end, it will cost us 35-40 billion dollars before it is ever paid for. Yes, we will own it but will bankrupt ourselves in the process. Does that make any sense?

  • Maurice E. Adams
    December 05, 2011 - 08:27

    Denise, if you go to the PUB website and review Nalcor's Final Submission, page 15, Figure 1, you will see that our average rate of growth from 1989 to 2010 is 0.1% per year (a little less than that actually). ---- you have to do the math, extracting the numbers from the graph. +++++++ That graph shows that our energy usage in 2010 is on par with what we used in 1989. _____Nalcor's go forward average growth rate up to year 2041 is actually about 1.2 % (12 times more than our 20 year historical growth rate which their own graph shows is near ZERO, less than 0.1%). They can only say that it is 0.8% by either taking Vale out of the equation altogether, or by going forward about 50 years (which helps them bring that average down to 0.8%). ++++++ Now, when our 20 year average has been less than 0.1%, how can they say 0.8% is using a 'conservative' go forward rate (they acknowledge that there is no forecast increase, other than Vale, for our industrial customers, and our population is decreasing, residential sales went down another 95 GWh in 2010, see their 2010 Annual Report, ------- so where then is the demand coming from ? Maurice

    • fred penner
      December 06, 2011 - 10:56

      0.1% of what? I looked at the graph and I estimate that the annual growth rate is approximately 57 Gwhr/year over the period 1989 to 2010 (6000 - 4800)/21 = 57. Further, 57 Gwhr/year is approx 1.2% per year when 1989 is used as a base figure (~4800Gwhr/year) (4800+57/4800 ~ 1.18% per year. The figures look right to me.

  • Harvey
    December 04, 2011 - 10:17

    Ms. Dunderdale could help save her political skin over Muskrat if she simply had the intestinal fortitude to open the House of Assembly so that everyone could hear all sides of the story. By not opening the House, will simply result in more wondering over what it's all about...beginning to smell like a rat somewhere!!! Oh yes...why Cathy, did you not tell us during the election campaign that you did not intend to open the House until six months later? Forgot????

  • brett
    December 04, 2011 - 09:18

    A question that should be asked is what is the current rate of subsidization that we have and that other provinces have for electricity. Answering that one would be a big step towards letting people compare apples to apples.

  • John Smith
    December 04, 2011 - 08:13

    Maurice, don't you know that by using fictitious numbers, that you make up from thin air only serves to undermine your already weak arguments? Those consumption figures are totally incorrect. The other thing you are forgetting is that even if Emera was getting the power for that price, it doesn't mean the NS consumer will get it for that. You have to remember this project is only about one thing, and one thing only, supplying power to NL...that's it. When they saw that there would be excess power for a number of years someone said let's sell it rather than let it flow to the sea.20% to NS for a cable that let's us use the cable for free for 35 years, then reverts back to us sounds very good. It allows us to sell on the market that extra 40%. Then when we need it we can recall it for use here.Maurice our needs are increasing here, believe it, and our bills have gone up by 50-60 % since 1998. The government and NALCOR are mandated to make sure the power is there. Our bills are going up, either to pay for holyrood, or Muskrat...I'll take the latter.

    • Not so sure
      December 05, 2011 - 08:18

      I wonder did the province take into account the closure of two major fish plants and more to come? Saddling the province with inflated electrical costs will stifle any economic growth. The only industries that are growing around here are natural resources, primarily oil, and government services, funded by tax dollars. Oil production will taper off in the next decade, and when those revenues go, so will the government jobs that the revenue from oil is funding. Unless there are jobs to replace those lost, there will be another mass exodus of our population. Government has their heads buried in the sand on that reality though. I'd guess that NALCOR does as well. Do we really need to build a $6 billion generation facility, or can we meet the future demand with a cheaper alternative or conservation and efficiency? Why do I feel like we're about to make a mistake that's going to cost us a wad of money that we don't need to spend?

  • Paul
    December 03, 2011 - 23:25

    I do not want to pay 14.3 cents per kilowatt!!! That rate would be my electric bill at over 6000 per year. Why are we developing cheap power for Nova Scotia!!! This comes out be worse than Churchill Falls!!! When are we going to learn!!!

  • Paul
    December 03, 2011 - 16:51

    I do not want to pay 14.3 cents per kilowatt!!! That rate would be my electric bill at over 6000 per year. Why are we developing cheap power for Nova Scotia!!! This comes out be worse than Churchill Falls!!! When are we going to learn!!!

  • Maurice E. Adams
    December 03, 2011 - 11:49

    Nalcor's forecast demand (even excluding Vale's Long Harbour plant) is that demand will increase over the next 50 years at an average of 0.8% per year. They say that this is 'conservative', but in fact it is 8 times our average increase in demand over the last 20 years --- and demand for 2010 again showed no growth and was on par with what we used in 1989.++++++ As for Nova Scotia, 1 terawatt of power for 35 years for $1.2 billion, works out to 3.4 cents / KWh. And with no escalator clause, their real costs will decrease while NL ratepayers will initially pay more than 4 times more (14.3 cents/KWh) --- escalating so that by the end of the 35 years, NL ratepayers will be paying about 6 times more. +++++ Nova Scotia rates go down, while NL's rates go UP.

    • Brett
      December 04, 2011 - 08:46

      Maurice, Let us hope that NL's economy + electricity usage does not grow for the next 20 years at the same rate that it has grown in the past 20 years. Through 20% sales tax rates, massive unemployment. You are a die hard negativist for change. You have to stop living in the past, and look at bringing NL on par with the rest of the country and the civilized world.

    • Denise Hennebury
      December 05, 2011 - 00:25

      This is not the first time I have heard numbers such as those that Maurice is quoting. Would love to get some references on that. Clearly these numbers are coming from somewhere. I am particularly interested in the idea that our energy consumption is NOT increasing ... so why would be need a new power source. Why not just clean up what we have and take this opportunity to explore new and REAL green energies? In a world where everyone (excpt for the Canadian govermnet, but I won't go there today) is recognising the need to reduce our footprint - use less water, less energy, less waste ... how is it that we cannot manage to see that bigger in really not better?

  • Mark
    December 03, 2011 - 11:32

    If one of the overarching policy goals is to deliver power to Newfoundlanders at the cheapest rate possible, why not break up NL Power's monopoly and let local providers sell electricity in a competitive market place