Minister tackles Muskrat Falls critics

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Gary Kean
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Jerome Kennedy - File photo

"I don't want to spend my nights wondering if I'm going to be the new Joey Smallwood."

That was how Natural Resources Minister Jerome Kennedy summed up his approach to developing the Muskrat Falls hydroelectricity project when he made an address to the Greater Corner Brook Board of Trade Friday.

Kennedy used the speaking engagement as another opportunity to discredit the project's critics, who disagree that the Muskrat Falls project is the lowest-cost option to generate the power the province will need in the future.

The minister said neither he, Premier Kathy Dunderdale, nor anyone in government wants to proceed with a project that will prove detrimental to the province's future, like the now-infamous Upper Churchill deal former premier Smallwood signed with Quebec.

He took aim at critics who have said the province's population decline and the closure of newsprint mills in Stephenville and Grand Falls-Windsor have contributed to a reduced need for energy.

He said the most recent census by Statistics Canada indicated the province has experienced its first population growth in decades and people are building larger homes that favour electricity as their main source of heat.

He took a shot at David Vardy, a former deputy minister and former chairman of the province's Public Utilities Board, for raising the spectre of the possible closure of Corner Brook Pulp and Paper as another reason why Muskrat Falls should not go ahead as the government hopes it will.

Kennedy, who met with paper mill union leaders earlier in the day and said he has also conversed with mill owner Joseph Kruger about the operation's future, said there is no evidence the Corner Brook mill is going to close any time soon.

In fact, Kennedy said he felt reassured after his conversations with Kruger and the unions that there will be a long-term sustainability plan put in place for the mill.

"It's almost as if some of these critics want Corner Brook Pulp and Paper to close down so they can say, 'I told you Muskrat Falls is not needed,'" Kennedy told the roughly 60 people at the board of trade luncheon. "Is that cynical on my part? Where else is this coming from?"

If the mill did close, the 124 megawatts of power generated by Kruger-owned Deer Lake Power could possibly revert to the provincial power grid.

"Our goal, as a government, is not to use the 124 megawatts of power that comes from Deer Lake for any other purpose than to run the mill in Corner Brook and anyone who suggests otherwise, I think, should look at their own motivations," Kennedy said to a round of applause.

The minister said Muskrat Falls may cost a lot of money up front and there will likely be cost overruns, but the naysayers have to keep in mind what a long-term benefit the asset will be for future generations.

"It's a revenue-generating project that will produce revenue for many years and eventually pay for itself," said Kennedy. "We are taking on a debt to build an asset that will produce revenue. It will pay for itself while stabilizing and then reducing rates."

 

Organizations: Greater Corner Brook Board of Trade, Statistics Canada, Public Utilities Board

Geographic location: Muskrat Falls, Corner Brook, Quebec Stephenville Deer Lake

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  • Sheldon
    February 13, 2012 - 17:56

    Ahem. Name-calling John Smith? You're innocent are you? Why don't you go back and read your own post. "poor unfortunate, misguided, dim witted people" and "whackos" come to mind. A few days ago you were referring to the naysayers as "the lunatic fringe". You're the one who resorts to name-calling. If you just stuck to the facts maybe people would take you more seriously. Look in the mirror hypocrite.

  • Scott
    February 13, 2012 - 17:22

    Mr John Smith...You sound like a man of many talent...If your so sure of this project...Would be kind enough to answer one question for me. Here the question. If 7 sheep went up a gap....7 more follow that...twice 11...2 and 3 how many is that.

  • John Smith
    February 13, 2012 - 08:55

    Well, you can see that the naysayers have, as usual devolved into the grade nine name calling and BS. They have nothing else. They cannot debate the issue. They try to talk about conspiracies, and rates that will triple, and cost overuns and lies. Yet they will not debate, because the cannot debate. The majority quickly see through this type of spin con job. Come on naysayers. Let's debate the issues, not call each other names.

  • marie
    February 12, 2012 - 19:54

    What is the maximum they're allowed to charge for power here?

  • dogy do
    February 12, 2012 - 14:24

    I must agree with Charles and MJ. What absloute arrogance from this big headed guy. Remember what the madical profession had to put up with when he was MOH, and now he has some say in the Muskrat Falls idea. God forbid.

  • Average concerned retiree
    February 12, 2012 - 12:14

    The pop growth is only roughly 1.5% for the prov. That is nothing. One or seniors die off and the baby boomers by 1950's, there will be no one left here except Danny owning the Island and his rich folks - worse than the Asians in Vcr. How stund do the think NL'ers are?? Furthermore, the income gap is widening in Canada between 20-40% roughly. NL being #7 on the list (stats can). I know as a retire I won't be staying if utility bills double for this and I know the young one's "I've spoken with say the same I'm outta here"!! So much for pop growth when retirees and the y The young ones leave. Also wish to say that Danny and his buddies need this power in Labrador - 4 minrs he and Dunderale approved in 1997 when she was minister of Nat Resources. They also went to China to look for investments. Danny resigned quickly to be special advisor to these mines and they are all invested $$$$ to make money but not to pay for it. Not to mention his 5B project in Salmonier he will need power for. Don't be fools Nl'ers. Greed has no boundaries with the rich!!! Amen. Some good points here. Gov needs to do more about the widening income gap. This really is a Buddy boom, that's all sadly. The rich get richer and the poor poorer.

  • mj
    February 12, 2012 - 08:51

    Jerome Kennedy isn't fit to touch the hem of Joeys' trowsers. Talk about swelled heads!

  • Cyril Rogers
    February 11, 2012 - 18:59

    As a former defence lawyer, Mr. Kennedym you should know that the odds are all stacked in favour of the prosecution(the government and NALCOR). I am quite certain you would have screamed bloody murder if you had had to defend a client with the prosecution withholding crucial information. No defence lawyer would stand for that yet you refuse to supply, or make access to such information available, by your government's insistence on limiting the choice to one of two bad options. To choose the lessor of two bad options is the issue being put before us while there are other alternatives that would trump both. Come on, Mr. Kennedy, you are being totally political and we cannot afford to have this decision to become a political one. The polulation growth on the Avalon is largely being offset by poluation declines in the rest of the province. Somehow, I doubt that, so where is the power demand going to come from. We have one of the oldest popluations in Canada, so our death rate will be much more likely to higher than our birth rate. We will see the loss of close to 100000 people in the next 20 years, unless there are major industrial developments. Your optimistic power assumptions and projections are ignoring the clear indicators of decline and you cherry pick to bolster your argument. If I am wrong, the economic benefits of this project will be marginal at best. If you are wrong...... the consequences are going to be financially catastrophic!

  • lonenewfwolf
    February 11, 2012 - 18:52

    We need to step back and take a look at ALL that this deal entails. Its not just about Muskrat Falls. Its also about a line to the mainland from our isolated Island grid. The Labrador Hydro issue seems separate to me. Why would we bring Churchill Falls power to the Island? Doesn't make sense. For one thing the MHI report states there is only 80MW of wind potential / planned on the Island. That statement alone make the rest of their analysis very suspect. There are many other false/suspect assumptions in the various reports NALCOR has commissioned, and wind is one of the big missing links. EMERA have an interest in Alogonquin, a utility company who own Rattle Brook which falls under the same legislation as Star Lake. Star Lake was essentially given private water rights via Harper & Co.'s $130,000,000 payout under NAFTA. The whole story of the Abitbi expropriation is needing a fresh look seems to me. With EMERA buying further into Algonqiun in early Dec. 2010 and then soon after there were 7.5 million shares purchased in EMERA at ~$30/share (and yes that's about 1/4 billion added to their bank account). Gywnn Morgan is the head of SNC-Lavalin who have what appears to be for all intents and purposes an untendered contract on the building and maintenance for the current project ongoing in Labrador. Lavalin also wrote the scoping study for EMERA on the transmission link into the States. Morgan is advising the Clarke gov't in BC on their dealings with the water/energy deals going on out there. He is not in the news here yet, and that seems a bit strange to me. He is a major factor in what is going on with all this, and may even be the architect for the whole thing. What this all means is that there is much more going on behind the scenes with these companies, our resources and the potential privatization schemes cooked up in the boardrooms of these corporations than anyone in the media or government is willing to discuss. The background information NOT being provided by those claiming to represent the best interests of the people needs to be further questioned and revealed. When politicians start pushing fear on the people by using statements like 'we'll all be bringing warm bricks to bed and wrapping up in blankets' and refusing to discuss the plans by companies such as kruger for wind farms on the island we need to bring the conversation to a higher level. Our children deserve a better world, one not controlled by the few with little to no concern for the earth, its various inhabitants or society as a whole.

  • John Smith
    February 11, 2012 - 15:36

    I would like to retract my last comment, LOL. The Liberals got a loan from the credit union down in noggin cove and they now are able to pay me more then the PC's. I'm awaiting an email from Dwight Ball with my new talking points. Until then I think the solar panels on the moon is the best idea. Dimwits, idiots, stupid, Liberals, oops, sorry force of habit, PC's. LOL LOL. Give ME a break. What a load of B.S.

  • Maggy Carter
    February 11, 2012 - 12:26

    If you don't want to spend your nights worrying that, like Smallwood, you'll be remembered for a great boondoggle that burdened taxpayers in this province for generations to come, then DON'T make the same mistake as Smallwood. DON'T assume that NALCOR has come clean with you any more than it has with the PUB and the public. DON'T assume that anyone who questions the merits of this project is out to get you and therefore deserves to be ridiculed publicly by you and your JohnSmiths. DON'T assume that public sentiment, the PUB, and the environmental review process are just obstacles that you and NALCOR can circumvent because you control the process. If you and Dunderdale want to be regarded as like honourable, competent, visionary leaders, then embrace the review process. Drop the court-room adversarial approach and take the view that the review process is there for a reason, that it needs to be given a chance to do its job, that public doubts and criticisms are healthy, and that, like the public, you are genuinely interested in learning everything possible about the implications of, and alternatives to, this project before making up your mind. When Martin pressures you into short-circuiting the process, remind him that it won't be his name that could appear in the history books alongside Smallwood in an unflattering way. The front-end investment to date, the need to nail down the loan-guarantee, the worry that Emera could walk, and all the other reasons being given you for acting quickly are all artificial. Consider the risks to the provincial treasury. Oil price and electrical demand forecasts are being made in an extremely unstable and uncertain economic environment globally. Project costs will prove to have been grossly underestimated. The added debt will put a strain on the province's credit rating and its cost of borrowing. Alternatives, including gas at Holyrood, have not been properly examined. Above all, bear in mind that the Upper Churchill became a millstone around our necks principally because Smallwood failed to consider the possibility of a game changer. That game changer was inflation. We don't know what that game changer might be for Muskrat. As Yogi Berra said it's difficult to make predictions, especially about the future. The other thing to remember is that, for all its flaws, Churchill wasn't being carried on our books the way that Muskrat will be. More than just losing the huge earnings that were expected from Churchill, Muskrat could create a fiscal nightmare and place an enormous burden on ratepayers and taxpayers if even one of the assumptions being made by NALCOR goes awry. Like many others, I am only too happy to see this project proceed if all these questions can be answered satisfactorily. Unfortunately, that can't happen given that the PUB review has been given an unrealistic deadline and its terms of reference made far too restrictive.

  • Concerned
    February 11, 2012 - 11:59

    Mr Kernnedy states that "Muskrat Falls project is the lowest-cost option to generate the power the province will need in the future." My concren is that an option not being considered is what we(electricity consumers) would potentially have to pay if Nalcor built a transmission line to the to the mainland and purchased power form Quebec Hydro. I do not think we need to generate power if we can buy it cheaper.. ..

  • Brad Cabana
    February 11, 2012 - 11:51

    Kennedy ignores the fact that between 1985-1995 over 150,000 people under the age of 24 left Newfoundland. That leaves a big hole in the demographic map, which could only be filled by a new "Irish-tpye" wave of immigration to the province.With the current birthrate of 1.3, Newfoundland and Labrador's population WILL be 25% less than what it is today. Given that Nalcor reports residential consumption of power accounts for 50% of its business, that is a significant factor. The fact Mr Kennedy chooses to stand in the corner, holding his breath, eyes closed to the obvious, does nothing to change reality.

  • John Smith
    February 11, 2012 - 11:16

    The bottom line comes down to two points. 1) Do we need the power? Not one study shows that we will not need the power. The MHI report, independant, commisioned by the PUB, says Nalcor actually UNDERESTIMATED our future needs. We have the Vale plant coming onstream which will require a 100 megawatts alone, Marystown shipyard, Bull arm, future mining developments in Labrador all point to a need to enhance our energy supply. So, you can dispute the fact, or if you agree that we will need power, you move to...2) What is the lowest cost option? Now, there are those out there that still think wind is a viable option, without a link to the mainland...they are wrong. There are those that have some sort of dream about a huge gas infrstructure, which will supply the aging plant in Holyrood....for a few years...then run out. Or we could connect to the mainland, have access to as much non-polutting...yes non-polutting energy as we will need for a long time. We even have a way to use the excess untill we need it...brilliant. All I say to the poor unfortuate, misguided, dim witted people...who can't seem to intellectually get their heades around this proposal is to read the available information. Read up on why wind will not work on an isolated island system, read up on why now that gas is so abundant and cheap the the oil companies will never use it for anything other then injecting into wells. There is a lot of information out there. I would love to be convinced by someone that this is not the right way...and the right time. All I hear from the natsayers are whacko pipe dreams and partisan rhetoric. If the naysayers would care to debate an alternative I would love to hear it. How about we put mirrors on the moon and beam down sunlight onto everyones house here in NL, or construct large tanks full of hydrogen to store power from windmills...LOL Give me a break...

    • Marie
      February 12, 2012 - 18:17

      Nalcor are the only people who say we need Muskrat. We don't know how much power we might need for the next 25 years until Joey's contract is up. We don't know the real "lowest cost option" of course, because Nalcor only wants one of the two highest cost options and if they do have any information on the lower cost options, they won't share it with us. The PUB is only allowed to review the two highest cost options and can't get the information from Nalcor they need plus they have even been refused the time they need to do that. There were two studies commissioned to review Nalcor's proposal. They only reviewed information given to them by Nalcor. Everything I've read about wind power has been quite positive. Would you mind telling us where the reading material is on "why wind will not work in NfLd" to which you refer in your post? If it's from the Nalcor website, don't bother because all their information is biased promotional material for Muskrat - but thanks anyway.

  • Dianne
    February 11, 2012 - 10:32

    Mr Kennedy...your trying to sell us a red herring...you think if you sing the song long enough...everyone will believe it...On feb 9/2012 i was listening to the debate concerning Muskrat falls...The only one seem to know whats they were talking about was MS Michael,For you and Mr Ball...forget it

  • Charles
    February 11, 2012 - 10:18

    Sorry...Mr Kennedy...You will never fill Joey Boot...Joey made a mistake...Why don't and other talk about some of the good thing Joey done for our province...compare them to the PASS AND PRESENT PC PARTY.

  • Scott
    February 11, 2012 - 10:12

    Mr Kennedy...The reason for the province growth is because...The people who lift years ago...Now they are at a retirement age...so they are coming back to here to retire...Sense the PC was passing $1000.00 to any family who may have a child...Now the pass few years...we had a baby boom...As for Muskrat Falls...The figure everyone was studying...was furnish by Nalcor...This would be in their favour...As for having a larger home to be build. That don't mean they are useing more energy....Because a building of 21000 square feet...is only useing the same amount of power...as a 3500 square home.

  • David McManus
    February 11, 2012 - 09:32

    Whether you like or despise Smallwood, there is no denying was a historic figure. Mr. Kennedy will never be thought of in that context. Mr. Kennedy is only a helper, not a leader. The names Williams and Dunderdale will be attached to the Muskrat project whether it succeeds or fails. Not Jerome Kennedy.

  • Ken Collis
    February 11, 2012 - 09:15

    If it will pay for itself then why do my power rates need to double, and yes, they will double!!! Will the money Government gets from the sale of the excess go towards paying the cost of building it? I bet not!!!

  • John Smith
    February 11, 2012 - 09:10

    The man is right. Blah gargle woh woh zing. This is a great project blah blah. Lol blah. Nalcor blah Provincial government blah blah Federal government blah lol Navigant MHI blah woh woh Dr. Locke blah lol Danny Williams Emera blah blah. Don't forget blah wind power? blah lol blah stupid blah lol Get on with it blah blah liberals blah blah gravy lol blah blah purple monkey dishwasher.