Nalcor, Emera say agreement coming despite passage of deadline

Ashley
Ashley Fitzpatrick
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Ed Martin (left), CEO of Nalcor Energy, and Chris Huskilson, CEO of Emera Energy , talk to reporters in the lobby of Nalcor's head office on Hydro Place in St. John's Friday morning. - Photo by Joe Gibbons/The Telegram

Nalcor and Emera have yet to come to final terms on the Lower Churchill development.

Friday morning, Nalcor CEO Ed Martin and Emera CEO Chris Huskilson provided an update on the work towards finalizing an agreement on the project including details of the island links.

In the lobby of the Nalcor building in St. John's, they told reporters the latest deadline they had set for themselves would not be met.

A preliminary agreement, an initial term sheet, was announced by the provincial government on Nov. 18, 2010.

"Since that time, both companies have been progressing with work to convert the initial term sheet into formal legal and commercial arrangements," Martin said. "Significant progress" has been made and final contracts are nearing completion. "However we will not have all the work completed by Jan. 31 (2012) as previously stated," he said.

Both Martin and Huskilson refused to offer up a new timeline for the contract work to be finished. "The project is continuing and the work to move the project along on schedule is continuing as well. So it's not holding anything up," said the Emera CEO.

Response to the update was swiftly offered by all provincial political parties, yet the St. John's Board of Trade was first out of the gate in addressing the update.

As with the politicians who spoke later in the day, the board fully supported Nalcor and Emera in not rushing through the contracts for the $6.2-billion deal.

"We welcome the additional information on Nalcor and Emera negotiations, and support the approach of taking some extra time to make sure negotiations are completed properly," said board CEO Nancy Healey.

She encouraged the creation of contracts that provide "clarity and consistency" for the business community. "This is a major undertaking and the process should be given the proper time for completion in the best interests of everyone involved, including residential and business rate payers in this province," she stated in a news release.

At the House of Assembly, there was no issue taken with the fact Nalcor and Emera would not have a set of finalized contracts by month's end.

"My first thought was that it's probably the wisest decision they've made to date, not to set any more deadlines," said NDP leader Lorraine Michael.

"I think it's in all of our best interests, all of us in the province, to take the time that is necessary to do any deal," Liberal energy critic Yvonne Jones said.

However, while not criticizing the latest update, both opposition parties did call for an extension for the work of the Board of Commissioners of Public Utilities (PUB). The PUB is scheduled to file a report on the project by March 31.

The extension for Nalcor and Emera was equated to the PUB's situation. According to Michaels, "what's good for the goose should be good for the gander," and the PUB should have more time, just as Nalcor and Emera have more time for their contract work.

Premier Kathy Dunderdale objected to the comparison, saying the work of the PUB in providing response on several basic questions on the project differs from the development of detailed contracts based on a term sheet. They are simply "two different processes," she said.

The premier noted a report from Manitoba Hydro - providing its assessment of the project and answers to key questions put to the PUB - is expected in early February. Manitoba Hydro was tapped by the PUB for the work.

Also, Dunderdale said, work on the details of a federal loan guarantee is progressing.

"There's no need for the loan guarantee to be done for the House of Assembly. The loan guarantee needs to get done, it needs to get done in a timely manner... but work is progressing very well. There's no bumps in the road," she said.

One final, key, report is in the works - the result of an environmental assessment by the federal government. There is no date set for that report to be filed.

The premier has said she generally anticipates more of this documentation to be in the hands of MHAs and available for discussion in the spring session of the House of Assembly.

"We'll wait and see what they come forward with, but I firmly believe that the government owe it to the people of this province to have a full debate around this project before sanctioning," Jones said.

afitzpatrick@thetelegram.com

 

Organizations: PUB, St. John's Board of Trade, Manitoba Hydro Board of Commissioners of Public Utilities

Geographic location: St. John's

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Recent comments

  • Maurice E. Adams
    January 28, 2012 - 16:27

    This is a "buy now, pay later" project. +++++ Nalcor finally released the cost for Muskrat Falls energy generation.+++++ Not the 7.6 cents as Nalcor and Dr. Locke has previously reported, but according to Nalcor's latest information on the PUB website ---- 21.4 cents/KWh and that does not seem to include transmission, NL Power add-ons, etc., etc. +++++ Furthermore, it seems that the 'firm' capacity of Muskrat Falls may be only about 1/2 the 4.5 terawatts that Nalcor reports (as water inflows in the winter may not even be enough to replace Holyrood. ++++++ What happens then if we have already signed a 35 plus year contract with Emera but won't have the energy to meet the requirements of the contract. ++++ NL ratepayers and taxpayers will be on the hook to meet their contractural obligations.

    • brett
      January 28, 2012 - 22:19

      oh maurice. All your statements include so much regurgitation it really makes me want to beg the telegram for an ignore button for you. Every muskrat falls article same old verbal diarrhea.

  • What's the rush
    January 28, 2012 - 14:25

    Sure despite the mass of evidence to the contrary, certain proponents refuse to acknowledge the massive risks and total lack of details on what truly is the lowest cost option! This is massive decision and investment, it would behoove us all to take the appropriate time and get it right!

  • Charles
    January 28, 2012 - 13:42

    Will Mr John Smith if your so sure about this,ANSWER THIS QUESTION FOR ME. You are putting up a building of 21000 square feet. I'm put up a home of 3500 square feet. which of the two, will use less power to heat. SEE IF YOU CAN THIS.

  • John Smith
    January 28, 2012 - 09:12

    Ol' Yvonne b'y...she's going to milk this one for all it's worth. Even without Emera this is still the best way for the province to proceed. We will be at an energy deficit by 2020 at the latest, our rates have risen by nearly 60% since 1998, and will rise this coming august by 7.8 % alone. The experts say the price of oil will never go much under 100 dollars a barrel for the foreseeable future. All we would do by sticking up ugly wind farms, and damming the last few small rivers on the island would be dealying the inevitable, and wasting hundreds of millions of dollars to boot. If you think long term this development will provide us with the most stable rates in North America. Instead of rising by 60% every 15 or 20 years, like they do right now, we will have constant, reliable power. The price of oil can go to 200 a barrel and it will not be shown on our light bills...as it does today. This is a good project, good for us now and for the future. Let's get it done.

    • Robert
      January 28, 2012 - 17:03

      John Smith....... I agree with you! The notion of cheap energy rates is a dream that will turn into a nightmare without Muskrat Falls being developed. With RELIABLE energy we will be the envy of the eastern seaboard and can fully expect an industrial boom like nowhere on the planet.