Nalcor, Emera agree on plan to sell surplus Muskrat Falls power

James McLeod
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Two companies make submission to N.S. regulator

Nalcor and Emera think they have a deal to satisfy the Nova Scotia regulator and get a firm green-light to develop Muskrat Falls.

Ed Martin

The deal, filed with the Nova Scotia Utilities and Rates Board (UARB) Monday, involves Nalcor selling surplus power to Nova Scotia until 2041 at Massachusetts market rates.

But Nalcor CEO Ed Martin told The Telegram Monday that the deal is structured in a way that won’t undermine industrial development in the province.

“We have surplus energy; we’re selling it into a market to make sure that we’re getting cash flow for it,” Martin said. “The type of power that we have to have for mines is the power that is available to us whenever they need it. And that’s the piece that’s not being committed here.”

Essentially, the amount of power that a dam like Muskrat Falls can generate will fluctuate from one year to the next, depending on how much rainfall and snowfall there is. The more water flows into the river, the more power Nalcor can generate.

Averaged out over a couple decades, Nalcor feels confident it can provide an average of 1.2 terawatt-hours of power per year to Nova Scotia.

On a dry year, Nalcor may only provide 0.5 terawatt-hours of power, but two years later, when there’s a lot of rain, it will be able to provide 1.7 terawatt-hours.

“We know from our historical hydrology records what’s happened on the rivers in this province for the last 50 years, and we can tell you, on average, how much surplus power we’re going to have available over time,” Martin said. “The energy we’re talking about having available under this arrangement is pure surplus energy.”

But the thing about that surplus energy is that since it fluctuates, you can’t rely on it all the time. Because of that, it can’t be used to power a mine or a subdivision in St. John’s. Martin said the plan was always to sell that on the spot market on the mainland.

But if Nalcor can sell it to Nova Scotia at spot market prices, that’s just as good.

“Newfoundland needs are paramount,” Martin said. “All we are offering up is surplus energy.”

When Emera made its initial application to the UARB to build the Maritime Link, the regulator said that the proposal wasn’t the cheapest source of power unless Emera could guarantee a block of power at market prices.

Market prices in the U.S. are substantially below what Newfoundland and Labrador consumers will pay for the electricity, and lower than what Emera will pay to build the Maritime Link.

With the current submission, Martin said that Emera and Nalcor hope to satisfy the UARB that they’re guaranteeing the surplus power block at market rates, thereby providing the cheapest source of power for Nova Scotia ratepayers.

Nalcor says Muskrat Falls is also the cheapest source of power for Newfoundland and Labrador ratepayers.



Organizations: UARB, Nova Scotia Utilities and Rates Board

Geographic location: Nova Scotia, Massachusetts, Newfoundland and Labrador U.S.

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Recent comments

  • david
    November 04, 2013 - 09:36

    When completely clueless rubes win the lottery, far more often than not they quickly squander their good fortune. And they they end up much more angry and unhappy than when they were poor, precisely because they temporarily experienced the trappings of wealth. If you don't understand the pount of this story, you are this government's perfect citizen.

  • Give away
    October 24, 2013 - 13:01

    How did Newfoundland & Labrador let the likes of this happen?

  • Corporate Psycho
    October 22, 2013 - 20:49

    Nl is paramount because we are paying 20 cents and NS will be paying 4 cents.

  • holyrood
    October 22, 2013 - 10:54

    I guess we won't see holyrood close now. Ed Martin as just admitted that Muskrat falls will depend rainfall and snowfall for it output instead of a water management agreement with Hydro Quebec. Which goes to show that he believes Hydro Quebec will win there case on water rights on the Churchill river.

  • Foghorn Leghorn
    October 22, 2013 - 09:01

    I love this plan, we will supply power to Nova Scotia and local mining interests for below cost. While local residential customers pay through the nose twice, once to finance the project and the other to buy electricity, I think I must have missed my daily dose of Nalcor kool-aid?

  • JM
    October 22, 2013 - 07:37

    From my initial review of the filing Nalcor have been able to negotiate a deal which may just meet the UARB requirements, but have not given away the farm. I expect they have given away the 1.4 TWhr of RECALL that presently remains from the Upper Churchill contract. There remains 2 questions. The first is will this increase our rates from what was provided, and voted in the house of assembly, for the DG3. Secondly, there is now now limited power remaining for mining in Labrador. Has Nalcor now conceded that the mining in Labrador can be fed by Hydro Quebec. Lastly when will they release the terms of the PPA between NL hydro and Nalcor? Nova Scotia are getting a great deal, brought to them by the largesse of the Government of Newfoundland and Labrador. I guess this link was always about the loan garuntee.

  • Jon Smith
    October 22, 2013 - 06:44

    There's lies, lies and there's damned lies. It is high time that somebody in government stands up and admits to the humungus blunders taking place with this project.