When it comes to the proposed $6.2-billion Muskrat Falls hydroelectric development nothing is certain just yet.
However, there has been a great deal of work put into determining where the province is headed.
That was the bottom line for the first public session on the project, hosted by the provincial Board of Commissioners of Public Utilities (PUB) Monday as part of its project review.
The session, as with the others to come over the next two weeks, was held at the PUB’s hearing room, inside the Prince Charles Building on Torbay Road in St. John’s.
The first day was focused on project proponent Nalcor Energy, providing the Crown corporation an opportunity to state its case for development, before an afternoon featuring an intensive question and answer period on various details with Consumer Advocate Thomas Johnson.
It was all taken in by the PUB, along with about 20 people in the hearing room and those watching on a live webcast.
Through it all, Nalcor staff continually stated their confidence in the project and the plan for moving forward.
“There’s risk associated with this. There are risks associated with all the alternatives,” Nalcor CEO Ed Martin told the board.
He highlighted the volatility of the price of oil as a risk — oil that would have to be purchased for the generator at Holyrood should Muskrat Falls development not go ahead.
Martin said the time is right to develop Muskrat Falls for many reasons — current revenue from offshore oil, the availability of low interest rates, having a water management agreement in place, an agreement with the Innu Nation in place and a federal loan guarantee in the works, to name a few.
“That federal loan guarantee is tied to a Muskrat Falls green option. It’s not tied to any other option,” he noted.
He also underlined the overall value of the proposed transmission system.
“This is really an inter-generational asset,” he said. “We’re building something for the future.”
On alternatives, Nalcor vice-president Gilbert Bennett said there was consideration of a “broad portfolio of supply options” to meet future energy needs before the options were narrowed down.
He walked the board through how that was done, using five key criteria — security of supply and reliability, cost to ratepayers, environmental impact, risk and financial viability of non-regulated elements.
During the session, Johnson challenged Bennett and a collection of project leaders on the accuracy of risk estimates to date, the potential costs and risks associated with integrating the island’s energy system with the mainland, and the reliability of the system as it has been proposed.
Throughout the day, the “probabilistic assessment” of Nalcor reigned supreme. Step by step, it was outlined how consultation, detailed design and engineering work — front-end expenditures — has led to the numbers now in front of the PUB.
Final costs remain uncertain and fresh cost estimates for the project are being developed.
Lower Churchill project director Paul Harrington said Nalcor has looked at what went wrong in projects that have experienced large overruns in order to avoid the same issues. “We are not complacent with regards to other projects, other megaprojects, that have gone off the rails,” he said.
He said problem projects have faced the need for additional dikes and dams in order to form a proper reservoir, have had to deal with as much as 1.5 kilometres of water diversion tunnels or have faced a challenge with access to the main dam site. These will not be issues when it comes to Muskrat Falls, he said.
As for system reliability — something raised in the review of the proposed project by Manitoba Hydro International (MHI) — Martin said there is strength in the system.
Generators will be made available to assure reliability for island power customers and, in addition, there will be the Maritime link (with Nova Scotia), something not included in the review of either MHI or the PUB.
Nalcor staff gave assurances both high and low-probability events — from ice storms to problems with circuit breakers — are being considered.
At 4:45 p.m., the first of the PUB’s public meetings was ongoing.
A complete transcript is expected to be made available today on the PUB website (www.pub.nl.ca).
afitzpatrick@thetelegram.com
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