$6.2-billion agreement reached to develop Lower Churchill project in Labrador: Emera

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Linemen work on electrical transmission lines near Brookfield, N.S, in this file photo. A $6.2-billion deal has been reached to develop power from the proposed Lower Churchill hydroelectric project in Labrador, Emera Inc. announced today. — Photo by The Canadian Press

A $6.2-billion deal has been reached to develop power from the proposed Lower Churchill hydroelectric project in Labrador, Emera Inc. (TSX:EMA) announced today.

Emera says under the agreement, Newfoundland and Labrador’s Crown utility, Nalcor Energy, would spend $2.9 billion to build a power generating facility at Muskrat Falls.

A transmission link from Labrador to Newfoundland would cost $2.1 billion, $600 million of which would be provided by Emera.

A link between Newfoundland to Nova Scotia would cost $1.2 billion, all funded by Emera, which owns Nova Scotia Power.

In a statement issued by Emera, Premiers Danny Williams and Darrell Dexter touted the agreement as one that would provide cleaner, affordable electricity and boost Atlantic Canada’s economy.

“This is an extremely exciting and proud day for our province as we move forward with plans to develop the Lower Churchill project — the most attractive clean, renewable energy project in North America,” Williams said in a statement.

“This is an historic day for Nova Scotia and all of Atlantic Canada,” added Dexter. “It lifts the idea of Atlantic co-operation off the page and turns it into fundamental action, building a more prosperous nation.”

The agreement is subject to approval by regulators in Nova Scotia and Newfoundland and Labrador.

Under the agreement, Nova Scotia would receive 20 per cent of the power generated at Muskrat Falls for 35 years.

Emera has been in negotiations to develop Lower Churchill power since a memorandum of understanding was signed in January 2008.

Nalcor officials have said it would take about five years to get energy flowing to Nova Scotia once a deal is signed.

Last month, Williams announced he was pursuing the Lower Churchill project in two phases. He said his plan was to build a generating station at Muskrat Falls, followed by a larger facility upriver at Gull Island.

The multibillion-dollar project has been on the drawing board in one form or another for decades. In 1980, it passed an environmental assessment but was set aside due to concerns over market access and financing.

Concerns over the loss of habitat that would result from the development of the project have also stalled its progress. But Nalcor has promised to develop a compensation plan to make up for that.

The desire to build more power plants on the Churchill River in central Labrador can be traced back to 1972, when the Churchill Falls hydroelectric dam was finished with Quebec’s help.

Under that deal, which doesn’t expire until 2041 and is often criticized by Williams, Quebec has reaped more than $19 billion in profits while Newfoundland has pocketed only $1 billion, according to the Newfoundland and Labrador government.

As a result of that deal, Newfoundland and Labrador has sought an alternate route for Lower Churchill power that bypasses Quebec.

Organizations: TSX

Geographic location: Newfoundland and Labrador, Nova Scotia, Atlantic Canada Quebec North America Churchill River

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  • Jackie Logans
    November 18, 2010 - 13:51

    Well done, Danny! Thanks to you, Canada's tenth province is no longer a laughingstock; and the Nation of Quebec should hang its head in shame.

  • Ed
    November 18, 2010 - 11:56

    It's amazing that however much you do right there are always some people that want to complain about something that they did not get. I suspect Jim might have a personal "medical" point to make. I may not agree with everything Danny says or does but I will give him credit for always trying to do what is, in his perspective, best for this province. In fact my disagreements with Danny are almost all with his approach to the problems not his objectives or solutions. There is always room for different opinions but lets at least give credit for making this happen. For all my wishing that he would be a little less antagonistic I honestly believe that history will record, from a development and financial perspective, he was probably the best premier we ever had.

  • Ed Penney
    November 18, 2010 - 11:25

    The amount of oil we have is finite. It will not flow forever. I think it's a wise move to use oil revenues now to develop a resource (hydro) that WILL keep on flowing and make spin off resource development available. Thank you Nova Scotia for coming on board. Your potential too (for development) will also be greatly diversified and enhanced through this partnership. Another star in your crown, Danny.

  • NewfieSteak
    November 18, 2010 - 10:09

    Stick it Quebec...

  • Maggie
    November 18, 2010 - 10:05

    And it took one good man, Mr. Danny Williams to get Newfoundland and Newfoundlanderx their due, which had been stolen from them and sold out by other NL Premiers of the past. Good Good Job...Danny...keep up the great leadership.

  • Jim
    November 18, 2010 - 09:35

    And now Danny can retire. He has gotten around Quebec. We won't have any healthcare professionals, but we will have gotten around Quebec.

  • Greg Byrne
    November 18, 2010 - 09:34

    Congratulations to all involved. The fixed link will make so much more possible like gas to wire, tidal wind energy export limitless.

    • Trevor
      November 19, 2010 - 10:43

      Well as a fellow NFLDER and atlantic Canadian now living in poor old Ontario, i feel so proud of the accomplishments of the Williams Government, watching our one time great Fishing Industy pillaged to the point of oblivion, and having a major resource GIVEN away by the Small (brain) Wood Government back in the day, now finally to see my home Province to come to the forefront of green renewable energy makes up for the past mistakes in spades...... Thank for all of you of YOUR public work.. Cheers to the Williams team