Alderon to put $65M down for power line

Ashley Fitzpatrick
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PUB still to decide how construction cost will be covered

Labrador West’s great rust-coloured hope took another step forward Tuesday, with the signing of a power purchase agreement (PPA) for the project — the proposed Kami iron ore mine.

The news comes on the heels of a decision by the provincial government, to order Newfoundland and Labrador Hydro to move ahead with construction of a power line from Churchill Falls to Labrador West, to feed the proposed mining operation.

The PPA firms up a company commitment to buying Hydro power off the new line.

“The power purchase agreement was a key infrastructure requirement and is critical in securing the previously announced debt financing and we are very pleased to have finalized it,” said Tayfun Eldem, Alderon’s president and CEO, in a statement.

To assure its commitment to the Hydro power if the line is built, Alderon began in 2011 by providing $4.4 million to advance Hydro’s engineering work.

The company has now agreed to put forward $65 million — to be returned by Hydro once power is flowing to the mine, or forfeit to the utility if the mine is not established as planned.

Liberty Metals and Mining Holdings has provided $22 million of the company’s $65-million security to start. “As Hydro makes commitments on the line (construction) it will ensure that Alderon posts additional security up to the $65 million,” noted a spokeswoman for Hydro in swift response to questions.

Alderon is not expected to be the only user of power from the new line, though other potential industrial customers have yet to be identified.

The overall cost of the power line’s construction is estimated at $300 million, excluding any interest and cost escalation.

And Alderon’s payment as security will not chip away at that total cost to Hydro.

How the utility pays for the line will be determined by the public utilities board. Some of the cost will be covered by the rates charged to Alderon for the Kami mine’s power, but those rates are limited to within the province’s new Labrador industrial power rate policy, introduced in December 2012 through a collection of legislative amendments.

It is unclear exactly how the PUB may ultimately deal with recovery of the line’s total construction cost.

The regulator does not, at this point, have any details before it on the line.

Construction of the new power line is expected to start this spring.

 

afitzpatrick@thetelegram.com

Organizations: Newfoundland and Labrador Hydro, Liberty Metals and Mining Holdings

Geographic location: Labrador West

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  • Just Sayin
    March 03, 2014 - 07:18

    Item 9 in previous posting should read "would NOT realize" instead of "would realize"

  • Maurice E. Adams
    March 01, 2014 - 16:30

    Also Peter, to be precise, the portion of the story you quote ----"The overall cost of the power line’s construction is estimated at $300 million, excluding any interest and cost escalation. And Alderon’s payment as security will not chip away at that total cost to Hydro."........Where it says "And Alderon's payment..." etc., ---- you will note that that statement is connected to the previous sentence by the word "And", which suggests A CONNECTION (in terms of flow, at the very least) to the previous sentence and that therefore, for the average reader, the ..."payment" could easily refer to or at least somehow be connected to "The overall cost of the power line’s construction ...". ........... While the headline itself is sufficiently misleading, --- I rest my case.

  • Just Sayin
    March 01, 2014 - 10:32

    Lets review this argument: 1. Ashley uses the headline "Alderon to put down $65 M for power line" 2. Maurice, a critic of Nalcor and the Muskrat Falls project, says the headline is misleading. 3. Ashley, not liking this, suggests Maurice is a troll. And suggests he try trolling somewhere else. 4. Maurice takes offence. A troll is a very ugly word, as explained elsewhere in comments posted here. But was it fair comment by Ashley? Ashley said the heading was accurate. 5. At issue : was the heading accurate or misleading? 6. On Peter Jackson's Naked Lunch, a caller asks Jackson to verify with Ashley if what was put down by Alderon was cash or a bond. A bond is security, as used by contractors, when bidding jobs. It costs little, but is binding. A million dollar bond costs say one thousand dollars. The article itself says "the company has now agreed to put forward $65 million" and further along it uses the word 'security' when referring to the $65 million. 7. But the heading says nothing about security, and uses the $ sign to imply 65 million dollars is to be put down. 8 A reasonable person might take this to mean a cash contribution to the cost of the transmission line. Or, if one reads the entire article, and is steeped in business matters, especially construction, such a reader might determine this is merely a security bond, and only a partial bond for 22 million with another portion of the bond to follow as the construction progresses. 9. The majority with business experience, unless in construction, would realize the thing put down is merely a bond. Those without business experience would assume it was a cash deposit. And many likely to think it was a contribution to the cost. Even Maurice, seemed to miss this was merely a bond. 10. It was exposed as a bond by Ashley to Peter on Naked Lunch 11. Peter tries to back up his friend Ashley by posting that the article uses the word "security" 12. The question is still "was the heading misleading". 13. The heading says nothing about this being a bond or a security instrument. 14 A reasonable person, and many and perhaps most business people, would think from the heading that cash was put down, and put down as a contribution to cost. Only on carefully reading the full article, might some conclude that there was no cash, and no contribution to the transmission line cost. 14 To the majority of readers the headline is therefore misleading, is it not? And the article is misleading, except to the few who would understand this is a bond. 15. This article is under the Business section. Ashley might argue that the business community would clearly see this is only a bond instrument, and would know this even from the headline. But this holds water, only if she had said in the headline the word 'bond' or 'security" . But this was not in the headline. 16. The logical conclusion is THE HEADLINE IS MISLEADING 17. Shouldn't Ashley admit it and withdraw the Troll comment?

  • Peter Jackson
    February 28, 2014 - 14:25

    This is directly from the story: The overall cost of the power line’s construction is estimated at $300 million, excluding any interest and cost escalation. And Alderon’s payment as security will not chip away at that total cost to Hydro.

    • Truth in Media: Thanks, Peter!
      February 28, 2014 - 15:08

      Oops, I should have used "Non-Ambiguous Headline", not "Factually Correct Headline." Maurice's commentary below was still rolling around in my mind, I guess, and a wrong phrase came out. :) What about Alderon "going elsewhere?" (We love The Telegram!)

    • Maurice E. Adams
      February 28, 2014 - 15:11

      This is directly from the story: Alderon to put $65M down for power line. ....... However, there is nothing put down "for" the power "line". The security payment will be for the purchase of power/energy OVER the line --- not for the "line" --- as the headline states. The line will be paid for by Nalcor (which in turn means paid for by the 'ratepayers")--- PERIOD. Is that not correct? Also, Truth in Media raises and interesting question? Where else can they go? And why?

  • Truth in Media: Thanks Maurice!
    February 28, 2014 - 14:01

    Factually Correct Headline: "Newfoundland rate payers to put $300M down to build power line to Alderon mine." Subline: "Cost to build power line: $300M." Maurice, Peter Jackson stated the following in his chat: "It is not a contribution to the capital cost of the line, just a guarantee on power purchases. If they decide to go elsewhere, they default." What does he mean "if they decide to go elsewhere?" Bill 61 gives Nalcor a monopoly on power sales in the province, doesn't it? I read recently of a dairy farmer on the west coast who is using methane to generate power and who is legally forbidden to even give power to his neighbours? (He can't sell excess power to Nalcor either.) Can industrial customers like Alderon, as Peter seems to suggest, actually "go elsewhere" - meaning buy from power suppliers outside the province - when domestic customers cannot???

  • Maurice E. Adams
    February 28, 2014 - 12:13

    JUDGE FOR YOURSELF ---- These are quotes from The Telegram's Peter Jackson (from his Naked Lunch discussion today) -------"1:26 Peter Jackson: OK, Graham. Ashley is trying to explain the Alderon assurance. That is all it is. It is not a contribution to the capital cost of the line, just a guarantee on power purchases. If they decide to go elsewhere, they default. So in that sense, no, it is not cash down. It is essentially a bond.................. 1:28 Peter Jackson: Yes, but again, it is not money down on the cost of the line. They are assuring their commitment to purchase power." ........................... SO, judge for yourself if that is what Ashley's article essentially conveys.

  • Cashin Delaney
    February 28, 2014 - 03:05

    I am a Super-troll, King Troll himself, if Maurice is a troll. By my definition, and the Cold Water Cowboys would back me up: Troll: to draw (a baited line, etc) through the water, often from a boat – trolling. I will express my opinion to the editorial staff via these comments (which I believe should be eliminated, as most serious online journalism sites are doing) so long as comments are received and posted in good faith. When comments are removed, as I predict, due to the scapegoa...I mean, trolls, the letters to the editors will surely get better. Many of my comments are not posted, that doesn’t bother me, as I am merely hoping to affect the attitude of journalists, not the masses. Some are a test, to see what passes censorship. Many comments of mine have been suppressed, but none more vile than this rhetorical response to Bill Westcott’s ‘dry-drunk’ attack on Jerome Kennedy's exodus: “Is he a Canadian Lawyer, or a Newfie Alcoholic? Who cares.” This made the cut! (to my shame, and embarrassment, as it was meant as a test, SORRY JEROME!) The Telegram staff disparages ‘internet trolls’, which is a conflation of the original definition with Norse mythology and modern projected psychological traits. Ashley merely tells Maurice, amicably, to “try trolling somewhere else”, which is acceptable to me (if a bit foolish maybe, its not as if he was plain wrong, or off-topic, or had “his gear snarled up in hers”) and does not place Maurice under a bridge, reading “The Prince” (which is satire by the way, yet, Machiavellian is a psychological trait now…)by a skull-contained candle , eating raw smelt that he took great pleasure in torturing to death, in my estimate, nor in Ashely’s, I am sure. A person who sows discord on the Internet by starting arguments or upsetting people by posting inflammatory, extraneous, or off-topic messages in an online community (such as a forum, chat room, or blog), either accidentally or with the deliberate intent of provoking readers into an emotional response or of otherwise disrupting normal on-topic discussion. This is exactly what I do. It is not what Maurice does. This use of the word trolling (as opposed to just stating, “I think you are reaching/offbase/etc, Maurice. Love your pal, Ashley) is either a reflection on Ms. Fitzpatrick’s ignorance of Mr. Adams courteous commenting history, which is forgivable, or, more unforgiving, the attempt to project her own guilt of self-censorship unto Mr. Adams. Now, in text, my words are Trollism for sure, but in person, over a cocktail, I could help Maurice and Ashley integrate their knowledge of Nalcor to a useful end. If comments were eliminated, then Maurice and Ashley could combine their new free time & knowledge for a few very interesting op-ed pieces. This line of reasoning has motivated me to abandon many comments for a more calculated, and less reactionary tact - save it for an essay. Many comments I write now just get filed away for future writing project ideas. This is not an issue of hidden identity or making people feel bad. I'm fake. Maurice is real, I think. It is The Telegram hiding behind a lazy adoption of pop culture as a means to discredit dissention. It is lame. Ashley, they are hiring in Caracas and Cairo?

  • Trolling
    February 27, 2014 - 17:09

    Definition: Trolling is an Internet slang term used to describe any Internet user behavior that is meant to intentionally anger or frustrate someone else, though not to be confused with cyberbullying a form of online harassment targeting a specific individual or group in a deliberate and hostile manner. - - - Seems to me folks are getting all hot and bothered about nothing!

  • Maurice E. Adams
    February 27, 2014 - 13:16

    CORRECTED COPY:---- Perhaps when Ashley used the word "trolling", she did not mean to be abusive............ Perhaps she was only driven by the need to put me in my place because I dared poke fun (http://www.thetelegram.com/Opinion/Letter-to-the-editor/2014-02-07/article-3606059/So-happy-to-share-our-wealth-with-the-world/1) at her Feb.1 Weekend Telegram article "Muskrat Falls goes global". ............Maybe she was upset because I had the bare-faced, unmitigated gall to poke fun at her double-page advertisement explaining how Nalcor was going global (with billions of our money no less)..... Perhaps I was supposed to feel overwhelmingly proud (as she seems to be) of how well and efficiently Nalcor was able to distribute our billions worldwide. .... I don't know why it is that I did not feel so enamoured by such an accomplishment. ........... In any event, if in any way Ashley, my poor attempt at humour was upsetting, let me say that I feel your pain, and that in future I will make every attempt to avoid from using any words that might bring into question your motives and integrity (at least equal to the effort that you have made to encourage me to exercise my democratic right to express my opinion).

  • Maurice E. Adams
    February 27, 2014 - 13:10

    Perhaps when Ashley used the word "trolling", she did mean to be abusive............ Perhaps she was only driven by the need to put me in my place because I dared poke fun (http://www.thetelegram.com/Opinion/Letter-to-the-editor/2014-02-07/article-3606059/So-happy-to-share-our-wealth-with-the-world/1) at her Feb.1 Weekend Telegram article "Muskrat Falls goes global". ............Maybe she was upset because I had the bare-faced, unmitigated gall to poke fun at her double-page advertisement explaining how Nalcor was going global (with billions of our money no less)..... Perhaps I was supposed to feel overwhelmingly proud (as she seems to be) of how well and efficiently Nalcor was able to distribute our billions worldwide. .... I don't know why it is that I did not feel so enamoured by such an accomplishment. ........... In any event, if in any way Ashley, my poor attempt at humour was upsetting, let me say that I feel your pain, and that in future I will make every attempt to avoid from using any words that might bring into question your motives and integrity (at least equal to the effort that you have made to encourage me to exercise my democratic right to express my opinion).

    • By the numbers
      February 27, 2014 - 13:19

      Adams is now up to 762 words of complaint over an eight-word headline. Imagine if he really had something to be upset about.

    • Wondering
      February 27, 2014 - 15:10

      That's about one word for each $85,000 "put down", that will be reimbursed to Alderon, from regular ratepayers. Keeping you honest, as Anderson Cooper would say. "Put down"doesn't mean "stays down". And while the headline says 65 million, the story says only 22 million in "security" is put down, with more to follow. And is the 22 million in cash, or a bond, more or less a guarantee to pay cash at some future date? Certainly they never put down the 65 million Which not only makes the headline misleading, but inaccurate. If you go "by the numbers", do just that. By the millions, not just the words.

  • Wondering
    February 27, 2014 - 13:08

    In school, in the 50s, one of our books had a picture of a troll, a ugly creature that lived under a bridge. Ashley suggested Maurice is a troll. I looked it up in Widapedika, just google "troll". It's a terrible thing to be called, in terms of internet comments. And it besmirches one's character. Was it fair? Was Ashley being a bully? Or the response by Maurice is indicative of a bully.... that is a troll has bully characteristics, and worse. Easy to see why the alledged Troll took offence. Now back to basics... Maurice said the heading was misleading, and Ashley said it was accurate and therefore Maurice a troll. Read the meaning of "troll" and judge who is right. Maurice cites Socrates and other moral persons in his arguments at times, but he is not often prone to personal attacks, although.... let him who have not sinned........I personally think "troll" is not applicable in this case, and perhaps Ashley should say sorry, and Maurice should say "Thank you Ashley"

  • saelcove
    February 27, 2014 - 11:43

    The head line should be in the entertainment section

  • Mirror Mirror
    February 27, 2014 - 10:09

    Six comments ever-more strident comments from Mr. Adams, more from his shadow-backers and one from Ms. Fitzpatrick. So, who's the bully here?

    • By the numbers
      February 27, 2014 - 11:03

      Good point. By my count, eight words in the headline, 38 from Fitzpatrick, and so far, 520 and counting from Adams. Umbrage overdrive or what?

    • Maurice E. Adams
      February 27, 2014 - 11:09

      So now I'm a bully for expressing my opinions, for explaining what and why I consider a comment to be abusive --- in short for having to defend myself for providing credible, rational, evidence-based comments ? Pile it on Mirror Mirror. ........That in itself, as I understand it, is an attribute of the bullying phenomenon.

    • By the numbers
      February 27, 2014 - 11:37

      Sorry, that's 574 for Adams. My bad.

    • david
      February 27, 2014 - 12:17

      Wow. This place never ceases to amaze.

  • Maurice E. Adams
    February 27, 2014 - 09:04

    I understand that yesterday was Anti-Bullying Day....... So Ashley, I thought it timely and appropriate to provide the following ---- specifically for your edification:----- "Name calling is abusive or insulting language referring to a person or group, a verbal abuse. This phenomenon is studied by a variety of academic disciplines from anthropology, to child psychology, to politics. It is also studied by rhetoricians, and a variety of other disciplines that study propaganda techniques and their causes and effects. The technique is most frequently employed within political discourse and school systems, in an attempt to negatively impact their opponent............ Name calling is a cognitive bias and a technique to promote propaganda. Propagandists use the name-calling technique to incite fears or arouse positive prejudices with the intent that invoked fear (based on fearmongering tactics) or trust will encourage those that read, see or hear propaganda to construct a negative opinion, in respect to the former, or a positive opinion, with respect to the latter, about a person, group, or set of beliefs or ideas that the propagandist would wish the recipients to believe. The method is intended to provoke conclusions and actions about a matter apart from an impartial examinations of the facts of the matter. When this tactic is used instead of an argument, name-calling is thus a substitute for rational, fact-based arguments against an idea or belief, based upon its own merits...."

  • Nothing Better to Complain About?
    February 27, 2014 - 07:27

    Oh, come on people! Griping that an 8 word headline does not capture the full essence of a 400 word article!?!!? Ashley reported the facts - and those of us with enough interest to read the article can clearly understand what the $65 M is for.

  • Gary from Ontario
    February 26, 2014 - 20:35

    Ashley, Is it normal practise for customers (residential/commercial/industrial) in NL to pay for transmission lines on public lands? If Maurice E. Adams lived on a dead end road that was 2km long, would he have to pay $1+M for the transmission line infrastructure? Let's say Maurice did pay for that line and then someone built a place next door to Maurice...would Maurice's neighbour just tap into that line for almost nothing or could Maurice charge his neighbour a significant fee because Maurice paid for the transmission line originally? I assume that Alderon did not get some sort of 'special' deal and that normal business practises were followed. Correct?

    • Joe
      February 27, 2014 - 07:41

      I would expect that the owner would have to pay for the transmission line and would not get anything back if others later used the line.

  • Show Me the Money
    February 26, 2014 - 19:00

    Since Premier Tommy has taken over he's handed out over $400 MILLION to private business. $400,000,000. 00!!! Why don't he just give every NLer's a cool million each if he wants to stimulate the economy. We can invest it just as well as any private business. Instead of putting 500 people to work, we will put everyone to work! But I think we all know why!

  • Gerald Ryan
    February 26, 2014 - 15:47

    Ashley, The headline is indeed misleading. Please remember that Alderon exists only on paper at this point in time. To Mr. Adams point, the impression given is completely at odds as to what's in the article.

  • Just sayin
    February 26, 2014 - 14:41

    I thought Alderon was paying 20 percent of the 300 million cost, but this seems just a deposit that they later claw back, and so leave the public to pay even that 20 percent. Seem Ashley is just a mouthpiece for Nalcor and Alderon. Why can't we get a 300 million line to the Avalon to reduce oil cost at Holyrood and reduce rolling blackouts? Can Ashley ask that?

  • Maurice E. Adams
    February 26, 2014 - 13:17

    I will not be bullied away Ashley from expressing my opinion on what I see as a misleading headline or statement that may very well leave readers with the wrong impression.......... The bottom line, as read this article, is that the transmission line will be paid for wholly by ratepayers ---- PERIOD (Alderon just happens to be one of those ratepayers). I don't think your article conveys that impression.

  • Maurice E. Adams
    February 26, 2014 - 13:00

    For the benefit of readers...... I did not say or suggest that your article was not accurate (i.e. not factually correct). I said that the headline and some statements were "misleading"........... DEFINITION:---- mis·lead·ing misˈlēdiNG/ adjective adjective: misleading 1. giving the wrong idea or impression. "your article contains a number of misleading statements" synonyms: deceptive, confusing, deceiving, equivocal, ambiguous, fallacious, specious, spurious, false .............. There is a significant difference therefore between being accurate and at the same time not being misleading.

  • Maurice E. Adams
    February 26, 2014 - 12:04

    Also, it is misleading to say that some of the costs will be covered by rates charged to Alderon, when the rates charged to Alderon will (I expect) be no greater than what will be charged to other industrial users in the region, and BY FAR, the $300+ million will come from rates charged to residential users.

    • Ashley Fitzpatrick
      February 26, 2014 - 12:14

      Not misleading- even by your own reasoning. If, as you say, costs will "by far" come from rates to residential users, stands to reason "some" will still come from company. So-accurate. Why not try trolling somewhere else Maurice.

    • Maurice E. Adams
      February 26, 2014 - 12:35

      There is a difference between "accurate" and "misleading". Many things can be accurate and still be misleading and politicians often use the term "inaccurate" to deflect attention away the fundamental truth of a critic's comment. Don't understand what you mean and what you are suggesting by "trolling". Please explain.

    • Corporate Psycho
      February 26, 2014 - 19:05

      Struck a nerve Ashley? Truth hurt?

    • phil earle
      February 27, 2014 - 05:30

      I agree Maurice, sometimes it is difficult to understand clearly statements released or made to the public by the government. And the difficulty rises the more hidden the real truth the government wants to keep from the public. ah la bill 29. In my experience it is in general not easy to understand the governments actions and dealings when large sums of our money are involved, they talk in a way that negates or contradicts what they just say and many times in the same sentence. In the Ceta deal of 2 months ago the premier said, finely, lastly, MPRs were given away but that it would be a great day for the future of our fishery and it would not harm our shore plants and their workers! Two weeks later some experts of the deal in the EU stated it was know by all during ceta meetings that it would destroy the inshore plant jobs and our small plants... and they were so happy about the future of getting all our fish raw to ship to EU for processing and new jobs. I still cant believe our own government people who are NLers let this happen...gave away our future to the endless value of our fishery. The point is all there statements on the ceta deal was mumbo jumbo ... false, double speak and spin. I have to admit I got the wrong impression from this article and thought the 65 million was a final payment by the mining company to help part of the cost of building the new line. But because of your astuteness and sharing it with the public I for one am thankful and the wiser. I didn't understand the point of the ladies comment on your remark until the word trolling was used, then it was clear. When someone cant have a dialogue on the points and principals of a topic without restoring to attacking the other speaker, it means they are short on substance, and have a lack of knowledge on the issue and sense they are losing from their point of view. But more important when that person resorts to attacking the character and integrity, without cause of proof, of the other speaker it has been my experience they lack the same in themselves. I would like to thank you Maurice Adams for the numerous comments and articles you have given to the public on MRFs, your list of accurate information has allowed thousands of people like me to see what our government has been doing in its dealings with Naclor and the future our children will be facing with the highest cost of electricity in north America. There is not one person in the government that has your passion and concern of MRFs for the people of this province and their future. They should all be trying to understand the plea you are making to understand the truth and potential out come of this mega project on our provinces future. We could use a few more of you in NL and if we had them we wouldn't be headed in the direction we are now. If I had an influence in what people do here I wish that you continue enlightening me on your accurate and brilliantly written articles. Im looking forward, as always , to your next article, and the simple words of thank you can never express the admiration and appreciation I have for what you have done to help the people of this province.

  • Maurice E. Adams
    February 26, 2014 - 11:55

    Misleading headline --- the article states that the "...$65 million — (is) to be returned by Hydro once power is flowing to the mine," so ratepayers are paying the $300 million plus shot.

  • Crazy
    February 26, 2014 - 11:52

    If Alderon wanted, let Alderon pay.

  • Jon Smith
    February 26, 2014 - 06:54

    Let’s hope this line is not loaded on the backs of Island ratepayers to add to the subsidy for the already obscene giveaway to Nova Scotia. While the $300 million without interest is peanuts compared to the huge white elephant unfolding at Muskrat, the Labrador municipal leaders and people are adamant they do not want to pay their fair share by having to endure domestic rate increases. Let’s not add insult to the present injury!

    • John Smith
      February 26, 2014 - 12:42

      blah blah blah...white elepahant...blah blah blah obscene givaway....guess what Jon....the project is going ahead....and the lunatic fringe lost this one...thank god....

    • david
      February 26, 2014 - 13:01

      So...it finally comes out: "Not listening, ramming it through, screw all of you." The truth shall set you free, pick up your lootbag on the way out.