Talking about Muskrat

Adam Randell
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Kennedy tells opposition to bring it on'

Natural Resources Minister Jerome Kennedy was a keynote speaker at the Clarenville and Area Chamber of Commerce luncheon Wednesday afternoon. Kennedy, speaking on the proposed Lower Churchill project, called it the lowest-cost option to meet growing electricity demands.Photo by Adam Randell/The Packet

There's a fight coming and Natural Resources Minister Jerome Kennedy was pretty clear in stating so at a meeting in Clarenville We d n e sd ay. Kennedy was the guest speaker at the Clarenville and Area Chamber of Commerce luncheon, and spoke on the $6.2 billion Muskrat Falls project. He said a lot of valid concerns have been raised regarding the project, but there were two main questions which had to be answered is the power needed, and is it the lowest cost option?


Kennedy said the Manitoba Hydro International independent review suggests the answer is yes for both. He said given the current rate of residential and commercial growth, the province could be experiencing blackouts by 2015. By 2020, Kennedy said, We will simply not have enough power. In reality, Kennedy said, there were two options for power development Muskrat Falls or refurbishing the Holyrood Thermal Electric station.

He said the independent review has suggested the Muskrat Falls project Holyrood option.

When it comes to electricity rates, he said, the average islander paid $179 a month for electricity last year. Estimates, because of increases in the price of oil, put the monthly bill at $217 per month by 2016. Muskrat Falls is scheduled to come online in 2017, and Kennedy said it will increase rates by $15 per increase by $14 over the next 13 years. He said the rates will be stable and eventually see a reduction, leaving the province with an asset. In exploring the Holyrood option, the facility can run at 18,000 barrels of oil a day.

Burning oil at $40 a barrel, he said, would triple the electricity rates compared to Muskrat Falls. government has taken flak over the House of Assembly not being open to discuss the issue, but that's about to change.

I can assure you that next week (when the house opens) we are ready, and anyone who has any questions on Muskrat Falls, bring it on, Kennedy said.

The Packet


Organizations: Area Chamber of Commerce, Manitoba Hydro International

Geographic location: Muskrat, Clarenville, Holyrood

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Recent comments

  • Rediculous Bizarre Project
    March 03, 2012 - 09:56

    John Smith has no credibility under alias. He's on here everyday, very rude. Does he work for Nalcor or government. Does he stand to make a lot of money like others? Fact is, gov should be ashamed of themselves for expecting the public to pay for this in the form of a huge tax we can't afford, regardless of the spin or sell. It's too expensive and we can't afford. It will hurt the people and the poorest including seniors who can't afford utility bills now. Obviously, there's another underlying motivation at work here they are not telling the public about. Just look at their disingenuine behaviour and Nalcor's. I mean honestly. Nice gov we have.

  • lonenewfwolf
    March 03, 2012 - 06:26

    EMERA is being given a shot at private water here on the Island inside this boondoggle of a deal. Rattle Brook is owned in part by EMERA via Algonquin, and Rattle Brook falls under the same legislation as Star Lake. When Williams illegally took the Star Lake facility from all those investors and Harper payed out the $130 million to ABH via the NAFTA challenge the Council of Canadians has suggested that Harper may have quietly handed over private water rights. Imagine that if you can, and then consider that that it is merely one aspect of this deal. What if...everything is a complicated set-up to privatize our resources, give EMERA access to our grid, and allow private companies such as Algonquin, Liberty Utilities, Kruger Energy and ENEL to establish co-generation biomass facilities & wind farms etc and ship everything out via EMERA's private line to the US?? All the while we end up subsidizing the infrastructure to provide the mines in Labrador with unregulated energy supplies from the dams. This is nothing more than an intricate plan to bankrupt our energy company, divest the most profitable assets and provide an opportunity to privatize water (among other schemes). Who was the last greedy sociopath to try something similar to this? I'll give you a hint, he was a lawyer for Fortis and the head of the Supreme Court while the last guy was setting all this up. Just look at the hot water SNC-Lavalin is currently in. Investigated by the RCMP for corruption on World Bank charges, Libya debacle and more to follow to be sure. Is the deal signed by the last administration in question under the investigation currently being carried out? Can the current government answer that question? Will they ask for us? Or must we take matters into our own hands? This whole thing is a scam. Nothing more. Who is gonna pay us to ship that power anywhere when Quebec is selling power for 1/4 the price? Who is going to pay for the Gull Island dam? Are we subsidizing private power development with that transmission system? Its not really that complicated if you break all the pieces down and follow the money trail, it all leads to those locked security doors behind which the NALCOR Board of Directors meet and discuss all this, and perhaps its only a couple of them that can see all the side deals. Who knows? Someone does, and we need the answers starting tomorrow. The people of Iceland stood up and took back their democracy, so should we.

    • lonenewfwolf
      March 03, 2012 - 07:04

      Just because the current crowd is the greediest we've seen in a while, does not make them the smartest. Not by a long shot. Go ahead John Smith, take your best shot. Or are you just going to claim CONSPIRACY THEORY!! CONSPIRACY THEORY!! Really, that is getting a little tired. World Bank corruption probes tend to lend a little more credence to all this. What was once considered a theory is how the world really works, and we need to wake up to this reality. This is the apex of the last fifty years of this type of activity taking place around the world. These corporations have been been doing this very same thing in many places for the very same greedy purpose they are doing it here now, and they have developed the arts of deception, corruption and collusion to perfection. John Perkins lays out the scenario in his book Confessions of an Economic Hitman (2005) perfectly, and some of the same companies he names in his story operate on our resources currently.

  • Muskratt falls...who'd a tunk it?
    March 02, 2012 - 08:49

    Ahhh the refreshing attitude of the minister.. You're either with us on MUSKrat falls or you support clubing baby seals. He's great at representing his clients. But why are we paying it for them. I figure its hard to prove the obivious when the other party holds all the truths. In sixty years we'll know and its not enough water in them falls to wash away this giveaway.

  • John Smith
    March 01, 2012 - 15:08

    You're laughing? That makes two of us. I love listening to this science fiction, it's fun. You know you are at the bottom of the barrel when you start to hear crap like this. Keep it up naysayers, you are showing us all how it's done. LOL

    • Yes b'y
      March 01, 2012 - 20:17

      That's priceless. The joke was on you. You're the one who lists off all these people and reports saying they prove it's the lowest cost option. But all those reports and people all say they only looked at two options not 3 or more. In fact, the Manitoba report stresses that it was permitted to only look at two options. Therefore, two options can only give you the LOWER cost option not the lowest. Muskrat may be the LOWER cost but nobody knows if it's the lowest cost. If they do, they're not releasing the analysis of any other options.

  • Too Funny
    March 01, 2012 - 14:21

    Johnny likes a good laugh, so do I. He also likes to throw out challenges so here's one that should be a good laugh. Can anyone show us the proof that MF is the "Lowest" cost alternative? Now remember, the word lowest means a comparison of three of more alternatives. Show us the analysis - a report that contains a financial analysis of three or more alternatives. I'm laughing already.

  • Will
    March 01, 2012 - 12:33

    The more the minister of a party that holds an overwhelming majority fights to explain how good a deal Muskrat Falls is the more I uncomfortable I get.

  • Louie
    March 01, 2012 - 12:28

    George S, you are suggesting that an island link can be put off by replacing Holyrood with a cleaner emmissions facility and that would be a cheaper way than the transmission line from Labrador. The island link can then be delayed to meet the 2041 delivery of Upper Churchill power.The government certainly should consider that before persuing the big project just to get into a connected mainland grid and subsdize export energy with domestic rates.Depending on whether the government follows the blue book and puts the oil revenues in, the impact on domestic rates could be crippling for consumers.

  • John Smith
    March 01, 2012 - 11:51

    LOL George...that's a good one. One of the funniest comments yet...keep em comin. Oh...heres one...I am going to put mirrors on the moon, and I am going to reflect sunlight down to NL, and it will be picked up by rooftop solar panels and converted to electricity...000.00.1 cents a KWH...I guarantee it. If only we had the House open we could get this passed...I just know it Grrr. Hilarious.

  • George S.
    March 01, 2012 - 10:42

    Dear John Smith (or Dawn Dalley): There are many, many things I am ignorant about, but energy is not one of them. The lowest cost alternative is conservation. Of viable, reliable, traditional energy sources the lowest cost alternative is a greenfield congeneration facility on the Holyrood plot, fueled by natural gas transhipped from the underutilized Canaport LNG terminal and regassified in Conception Bay on board the vessel (e.g. Excellerate Energy). Natural gas will eventually be developed offshore NL, so arranging a ten or fifteen year fixed price contract would be simple. Cost per kWh is $0.090. I guarantee it. I also guarentee Nalcor's models are in the same range. Of course there are several complex economic models supporting this decision. Had we not allowed NL to deviate from democracy, this would have been a submission to the PUB.

  • Randy
    March 01, 2012 - 10:26

    This project will come close to bankrupting the province of nl.. CASE CLOSED mr.Kennedy

  • Louie
    March 01, 2012 - 10:12

    The government agenda is to build Muskrat Falls and compete in the mainland markets. People need to know that the oil revenues (as the blue book says) will be used to minimize the impact on domestic rates while susidizing the export rates. Oil is not a demon. We do quite well with income from oil royalties. We have had oil prices figure into our domestic rates since Holyrood generating station was built around 1969. If we want to look at other options we can build the transmission line from Labrador and transmit present recall power if Holyrood can be taken out of the electrical system and still have it function satisfactorily. If we want to pick the most ecomomical way to satisfy our domestic demand, the most likely solution is to go isolated island until the repatriated power form Upper Churchill is repatriated and delivered into the domestic grid in 2041.

  • John Smith
    March 01, 2012 - 09:38

    Robert, our electricity rates are directly tied to oil. Go to the PUB website, and look up the Rate Stabalization Formula. That is the mathmatical equation that the PUB uses to calculate how much extra they will add to our bills in July to make up for the cost of oil.

  • John Smith
    March 01, 2012 - 08:59

    Just read the two comments by Louie and George. They are two perfect examples of ignorance. @ Louie...we will need the power, what do you propose we do? We have to spend huge money no matter which option we choose. With Muskrat we have the loan guarantee, and the three to four hundred million in sales a year to further offset any interest on the loan. At the end of the day we will own an asset worth billions of dollars, and will include a cable to the you have an alternative to suggest? If you do not belive, in your learned opinion, that a hydro development is the lowest cost option, then what? Gas? Wind? Both have been discussed again and again...what is it that you don't understand? This is a good project, not perfect by any means, but it is the best option for us, and our future.

  • Robert
    March 01, 2012 - 08:17

    Who in their right mind would want electric rates tied directly to the price of oil? The question is as simple as that. This morning the price of oil went up again at the pumps; how would you feel if it did the same thing to your heat bill. It is essential that people grasp that Muskrat Falls will STABILIZE rates. This means that businesses (old and prospective) can put forward budgets with confidence that at least their heat and lights will be a fixed rate. What would happen to people on fixed incomes if their heat bill was subject to the world price of oil? Does the ever constant turmoil in the Middle East give you any confidence that there will always be oil to buy?

  • Louie
    March 01, 2012 - 07:19

    The fighting Newfoundlander posture looks good. Bullying a few opposition members should not be difficult. Questions the people need transparent answers to are: How will the debt and borrowing rates be affected by the project? How will the children and grandchildren pay for it? Will oil revenues be used to pay for it as the blue book says or will it be taken onto the backs of ratepayers/taxpayers as present documents before the PUB indicate? How will having to sell power into mainland at subsidized rates impact consumers/taxpayers?

  • George S.
    March 01, 2012 - 07:13

    The scope of the Manitoba Hydro Study was to evaluate TWO options presented by Nalcor. Therefore, Muskrat Falls is the LOWER cost option of the two assessed exclusively based on data provided by Nalcor. It is not the LOWEST cost option available. The public need to be very careful of Nalcor/Ministers' incorrect use of LOWEST when describing the cost of this mega-project. It is interesting how even the savvy, well educated regional journalists have adopted the grammatically incorrect nomenclature. Kudos to the communications folks with Nalcor and the government. You have achieved the goal of every media campaign.