Nalcor Energy takes on Muskrat Falls questions in front of PUB

Ashley
Ashley Fitzpatrick
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Commissioner Andy Wells, head of the Board of Commissioners of Public Utilities (PUB), begins opening remarks at the first public session for its review of the Muskrat Falls hydro project as vice-chairwoman Darlene Whalen listens. The sessions are being held at the PUB hearing room at the Prince Charles Building at 120 Torbay Rd. in St. John’s. — Photo by Ashley Fitzpatrick/The Telegram

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

Organizations: PUB, Board of Commissioners of Public Utilities, Manitoba Hydro International

Geographic location: Muskrat Falls, Torbay Road, Nova Scotia

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  • Squirrel's in MuskRAT Clothing
    February 15, 2012 - 09:00

    Old habits are hard to break, I guess. Danny says jump, and gov still say's how high? Look, Dabby williams and Jkennedy can come out and say that all the critic's and their dogs numbers are wrong and try and disscredit people. But the number's are from gov and nalcor, the average taxpayers aren't out paying out of pocket for these studies, which has of yesterday we seen haven't been done, priced or exist.. We want to do a project where the out come on prices aren't known? All of a sudden out of left field we need all this power. The first farce GATE. Oh, then the stars are starting to align alright. Just because there are good interest rates today doesn't mean we have to risk the interest of the taxpayer and go out and bulid a 8- billion dollar hydro dam. Makes no sense!. The real deal in this project, which is enabling these planets to attract each other like fly's on caplin has nothing to do with power getting to the Island. The real GRAVY is who has the most to gain. Cause lets face it, They have NL in a real tight spot now, and WE nEED THIS ENERGY, from OUR warehouse. But when we look at this, there really is NO deal. NL is merely buying a HydroDam, and going to pay for it too. The province only needs have of the power that it say's it will produce, highlighting the need once again. But we will be avoiding Quebec at all COSTS. And by the way, if anyone wants to put their own money into nalcor's project, they can. They can even take their money out of emera and put it into nalcor they. Cause Nalcor will eventually get the money anyway, weather we use the power or not! I can take tell you though, that there is risk involved, alot of it...and it don't look!

  • Roger Grimes please come back
    February 14, 2012 - 16:44

    Seem's dunderdale and kennedy have the same head strong attitude on this MRF debacle as they had on the AirAmbulance on the Northern Penninusla.A we all saw what a good choice that was. Im sure they'll have no problem convinicing the rest of the 1% that its a good deal for them at all the ro-tory meetings. And danny williams still playing both sides. lol Give AWAY GATE #3 A few old million is only a drop in the bucket as compared to 6.2- 10 billion dollars. How much are bonuseson a our GREEN project of this size anyway?

  • MBC
    February 14, 2012 - 08:48

    These Hearing should be shown live on TV. Rogers and NTV showed Wade Locke's presentation over and over for weeks. In my view, these Hearing are just as or more important as his presentation. Consumers would be very interested in hearing question asked by our Consumer Advocate.