Muskrat Falls: Dollars and Sense

Steve
Steve Bartlett
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Find out all about the provincial Mega Project with this story and others, in The Weekend Telegram

Is Muskrat Falls fit to eat? The proponent of the hydroelectric project, Nalcor, says it is.

This week, The Telegram’s publisher and a team of senior editors and reporters spent almost 90 minutes questioning officials from the energy corp about the development.

Grilled on every conceivable aspect of the $6.2-billion project, the Nalcorians did not waver.

They maintain their analysis shows that putting two dams at Muskrat Falls on the lower Churchill River is the best way to meet the province’s future energy needs.

“We feel comfortable with the project and the business case,” said Dawn Dalley, corporate communications manager.

If it goes ahead, Muskrat Falls will generate 824 megawatts of electricity.

That juice will flow over transmission lines from Labrador to the island.

An estimated 40 per cent of that power will be used to meet this province’s needs.

The remainder will be redirected over a maritime transmission link.

Nova Scotia’s Emera — a 29 per cent partner on the transmission link but not the generating plant — will take 20 per cent of the power.

The excess electricity — initially about 40 per cent — will then be put up for sale, mostly in New England, where it would be traded like a commodity.

The need for a project like Muskrat Falls is being driven by increasing domestic demand and the future cost of maintaining the status quo.

“We’re at the point where we have to do something,” Gilbert Bennett, vice-president of the project, told The Telegram.

In the short term, the biggest driver of demand for energy is the nickel processing plant Vale is constructing at Long Harbour.

Besides that, residential consumption of electricity is on the rise.

Then there’s the projected price and environmental cost of continuing to burn Bunker C oil at the Holyrood generating plant.

The officials acknowledge power rates will rise if Muskrat Falls proceeds, but they caution the cost of electricity will rise even higher if the project doesn’t go ahead. (To see how much, see Electricity Rates graphic with this story in The Weekend Telegram).

“I guess the most fundamental question is, if we don’t want to build the project, then we want to pay more,” Bennett said.

The potential success of Muskrat Falls does not hinge on the sale of excess power.

In fact, the officials say not one kilowatt needs to be bought stateside for the project to be viable.

No revenue has been budgeted from selling extra power, which means that any that is sold is basically gravy.

“This is an upside opportunity that we have not forecasted into our analysis,” said Bennett.

“If we get a minimal amount of cash for that, it’s still an upside opportunity. It comes at no cost, no incremental cost, to the project.”

But the upside opportunity is there. Bennett said if the New England market bought 2 million kilowatt hours at today’s prices, it would be worth $100 million.

“Significant upside,” he said. “But we’re not putting a revenue requirement on it. We’re not saying to our lender that we can guarantee that amount.”

That’s not the only gravy associated with the project.

The Conservatives committed to a loan guarantee during this spring’s federal election.

That backing would help offset the cost of construction by lowering the interest rate by about two per cent.

But the loan guarantee wasn’t factored into Nalcor’s analysis either, so those savings would be passed on to electricity consumers, who’d save about six per cent on their bills.

It didn’t come up during the sit-down with The Telegram, but Dalley later explained the Muskrat Falls project is a self-financing project, with the revenue stream paying off the debt.

The money borrowed to make it happen will not affect the province’s net debt, she said.

Cheaper than the alternatives? Potential power sales in the millions? Federal backing that could make it sweeter? Self-financing?

It might seem too good to be true, but Nalcor believes this is the province’s cheapest energy alternative.

“We’re paying a lot of attention to this,” says Bennett.

“This is a big call. And we’ve got a large team — ­over 100 people — focused on this particular issue, trying to make sure we’re making the right decision and the right recommendation moving forward.”

The Public Utilities Board is also reviewing the project to ensure it is the cheapest option. It hopes to have a report on that by Dec. 31.

Rob Hull, Nalcor’s general manager for commercial and financing matters, said the banks will also scrutinize the deal before committing to financing.

“Another test, and a big one, will be the lenders,” he said.

Bennett pointed out that Nalcor’s mandate is not a political one, but rather its job is to provide safe, reliable energy at the lowest cost.

If the deal doesn’t go ahead, Nalcor said the lights will still stay on, but the power will come at a higher cost.

NOTE: Comments are moderated. If you post a comment and it is not posted immediately it may mean it has yet to be reviewed. Your patience in allowing time for comment review is appreciated.

 

sbartlett@thetelegram.com

Twitter: bartlett_steve

Organizations: The Telegram.In, Public Utilities Board

Geographic location: Muskrat Falls, New England, Churchill River Labrador Nova Scotia Hull

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Recent comments

  • Bash
    October 10, 2012 - 18:14

    Residential consumers will see their rates rise while industrila consumers will see their rates drop. Are we surprised that the business sector supports the deal? Should citizens be subsidizing big business? Brian

  • Maurice E. Adams
    August 16, 2011 - 13:57

    So, "residential consumption of electricity is on the rise" is it?????.......... Just read Nalcor's Annual Report and you will see that consumption in Newfoundland went down 120 GWh last year ----and 95 of those GWh were due to a reduction in residential consumption..... and only 25 GWh from industrial users. Facts don't seem to matter much to Nalcor.

  • John
    August 15, 2011 - 07:22

    There isn't enough information out yet to make an informed decision. Let's wait and see what NALCOR's,PUB and their contractor come up with before saying whether this is a good or bad project - compare apples to apples and not apples to oranges.

  • Brett
    August 14, 2011 - 19:35

    wow - people really don't like change. What happens if/when all the new commercial buildings that are being built over the next 5 years get filled with employees? I was trying to add it all up, at an avg of 300sq.ft. per employee (takes into consideration lobbies etc), and you're going to have over well over 10,000 new jobs in St. John's. Consider that St. John's/Mt Pearl has a large number of single income families + children for income earners (strip out the seniors before you see how many people have dependents) - and you're looking at around a population boost of 25,000 (I don't even know all the buildings. I'd love to see how many sq. ft. in total capacity is added.)... St. John's metro is about 220,000 ppl. So yeah - I can see us needing more power. Esp as the people we're HOPING to have move back/move here will be earning good jobs, paying good taxes and developing the city.

    • ComeOn
      August 15, 2011 - 10:47

      How dare you talk common sense..... I don't want to wait and see want PUB and their independent review have to say. I just want to stamp my feet and shout anything at the top of my lungs.... I can see you're one of those people always tries to look at the non-negative side (because we know positive isn't a word in NL). How dare you sir try to think ahead, I don't like people who think ahead. :)

  • Graham
    August 14, 2011 - 14:24

    What exactly do you see happening to drive demand up Stanley? The two paper mills that were shut down sure as hell wont be coming back on stream and we run the real risk of the Corner Brook Mill closing its doors as well. Nalcor is playing games by saying the damad might exist somewhere down the road in the next century. Doe sthat justify the way we are being gouged now every time we pay our hydro bill? The way I see it Stanley there is no justification at all for whats happening right now and if this Danny Deal goes through it will only get much much worse. Lets see if I can put this in terms you Stanley and John Smith might actually understand. Right now I have a car and a truck In another year whn my wife retires we will most likely only need one automobile so based on your logic Stanley and John I should go out and double my expense and by two more cars that I will never really need. The car dealership gets the money I get the cars but nothing has changed I still drive less than I ever did but now I have four shiny cars in my driveway for two people that really have little or no use for the two we allready have. Take it a step farther. For the cars I will no longer need I will spend 50 thousand dollars each on them before I take them to the scrap yard as is the case with the money that will be spent on Holyrood before its shut down. No demand there either Stanley and John. Need I go on or do you get the point now? Hopefully you do.

    • stanley
      August 14, 2011 - 15:59

      Demand is forecasted to go up due to the new argentia smelter and residential demand going up. You still haven't answered what if electricity demand actually does go up? You keep saying it won't, but what if it does?

  • i mullett
    August 14, 2011 - 14:12

    Who will pay the electricial bills for the people who can barely make ends meet now ?

  • Graham
    August 14, 2011 - 13:23

    Stanley you apparently dont get any of this do you. Its NOt about liking the PC government or Nalcor its about what is best for the taxpayers of this Provinve and trust me Stanley this deal is not in the best interest of the tax payers of Newfoundland & Labrador. Why do you refuse to see that Stanley? Could it be because you love the PC government so much you cant see anything else around you. Dictator Danny complained about the Upper Churchill deal ad rightly so but the deal that little tyrant signed makes the Upper Churchill look like the best thing that ever happened to this Province. Look at all the close friends and business associates that Danny put in place at NL Hydro and Nalcor when he was our dictator, oops sorry premier. All put there to make sure this deal happened no matter what. Birds of a feather flock together so the saying goes. Well stanley Dannys last act as premier really flocked us if you get my drift.

  • stanley
    August 14, 2011 - 13:11

    Some are saying Nalcor's forecast for energy demand is wrong and too high (based on whatever exerpertise they think they have in the area), and therefore Muskrat does not need to go ahead. Well please take a moment and think what if demand actually is as high as the forecast? I would rather plan accordingly instead of in five years time have maurice adams post "whoops - my bad" online. This is the cue for Maurice to talk about wind and oil instead instead of hydro, subjects that have been dismissed over and over and over and over yet he doesn't want to hear it because basically he doesn't like the PC government.

  • Phoebe Tilley
    August 14, 2011 - 11:30

    John AKA Smith have you always had a problem dealing with the truth? It seems to be that way.

  • Graham
    August 14, 2011 - 11:28

    Well John Smith Muskrat Falls is WRONG. Sadly some people like you will NEVER see or admit to that. On the up side more and more people are seeing on a daily basis what an absolute farce this whole deal is and the even bigger farce called Nalcor. Wake up Mr Smith before its too late. Then again it seems in your case its allready too late so dream on John Smith dream on.

  • Maurice E. Adams
    August 14, 2011 - 08:29

    ANOTHER STAT: (from Nalcor's numbers and graphs). Our peak historical load (usage) year was 2004 -- when we used 8700 GWh............ Nalcor's Capacity/ Energy Deficit - Demand table says our Existing Firm Capability is 8953 GWh. ========== So, for that year (2004) we operated (without any urgency) with a 2.9% difference between what our 'firm capability' was (8953 GWh) and what our actual demand was (8700 GWh).===== Now, in 2010, our actual usage (demand) was 7380 GWh (down from 7500 in 2009) while our Firm Capability (again from Nalcor's Capacity/Energy Deficit-Demand table) remains at 8953 GWh.======== That means for 2010 we now have a safety net of 21.3% (more than 7 times better than what we had in 2004). ===== Vale will increase (by around 2016) our demand by 730 GWh (info from Nalcor's charts), which means that even with Vale, we would still have a Firm Capability/Demand safety net of 11.4% (4 times what we had in 2004).===== Now we didn't have an urgent situation in 2004 (when we still had several paper mills and a safety net of only 2.9%), but somehow we have to "do something" --- not 10 years from now, not 20 years from now, but according to Nalcor "we have to do something" ---- NOW --- when our safety net is 4 times what it was in 2004 (more than 21% versus 2.9% in 2004) ?????? How can that be ??? And why? And those are actual numbers without even doing some small island hydro or some additional wind projects (which cost us only 8 to 9 cents per kilowatt hour).

  • Maurice E. Adams
    August 14, 2011 - 07:37

    FOR THE RECORD ---- The stats that I use are NOT "my stats" --- they are taken right from Nalcor's public documents and email information. These include their Historical Load and Forecast Demand graph, their Summary of Holyrood oil costs from 2000 to 2010, their long term forecast model of costs for Holyrood, actual energy sales for 2010, actual Holyrood oil costs for 2010, actual email Holyrood capacity and usage info from Nalcor via email, etc. If "my" stats seem out of whack with Nalcor's 'forecasts', then either Nalcor's own numbers or Nalcor's forecasts lacks credibility. ---------ALSO, excellent comments and very important points FINTIP, especially about the need for a sensitivity analysis of major assumptions such as costs, demand forecasts, cost overruns, etc.

  • Randy
    August 13, 2011 - 20:32

    I wouldn't believe these nalcor lackeys as far as i could throw them-They're trying to secure thier jobs at tax-payers expence.I don't want my light bill to double because of this project

  • Amused
    August 13, 2011 - 18:37

    I don't know if Nalcor is lying but no one has provided any proof that they are lying or that the project is not viable or worthwhile. But the act of picking and choosing stats, done on both sided, is being done to mislead readers. Please people, leave to others who know what they talking about to state the facts.

  • Calvin
    August 13, 2011 - 18:19

    The Public Utilities Board has yet to weigh in here, and until they do Newfoundladers need to keep an open mind. The alarmsists need to relax until the PUB states the project is not worth the investment. I am a strong supporter of this prject, but if the PUB comes back saying the project is not economically viable the yes, the government needs to consider developing some smaller hydro electric plants. However, Hydro Electricity is the future of generation in this province, be it Muskrat falls or a handfull of smaller plants, so wouldnt it makes sense to invest in one big plant instead of seen smaller ones? Maintenance alone on one big plant compared to several smaller plants will save the province money.

  • Beaufort T. Justice
    August 13, 2011 - 17:50

    This is a project that could provide dividends to the province for generations to come... but just not this generation with the deal that's currently in place. From the details it seems we are not getting the best return for our investment. The deal was rushed through for a simple legacy project. I think we could have gotten a much better return than 35 years of free power for NS, while we pay through the nose. God help the seniors on a fixed income after those rates. Great project, bad deal. This smells of the Lower Churchill all over again. No more giveaways!

  • John Smith
    August 13, 2011 - 15:36

    So Maurice, you have given up trying to persuade us that Muskrat is wrong, and instead you are trying now to tell us about how glorius to have an oil powered generator as our panacea for future needs. Maurice, let me tell you something, our demand is going up. No matter how many times you try to tell us it isn't...it is. I know houses that have 200 amp panels just for the kitchen...Truth. One time a house would have 60 amps for the whole place. There are new energy needs arising everyday, and we need to be prepared, not pouring billions into antiquated, outdated, oil fired generation. The rest of the world is trying to get rid of that, and yet you want to embrace it??? Give it up b'y, for God's sake.

    • Not buying into the spin
      August 14, 2011 - 10:47

      John Smith, your perspective is as myopic as NALCOR's. Alll NL Power has to do is set differential rates for power consumption to tax those that are using more than their fair share. Incremental per kwh charges for those that use beyond average residential usage would encourage conservation as well as provide funding for increasing capacity. NALCOR could easily just link the NL and Labrador grids and provide for our future needs by recalling energy that is sold to the U.S. at less than we pay at home. Why should those of us who use electricity responsibly pay for those that waste it?

  • Foghorn Leghorn
    August 13, 2011 - 14:30

    I am much afraid that much of this is simply falling on deaf ears. I think that many of us have tuned out when it comes to massive government expenditures such as these. We are so used to seeing numbers being thrown around in the billions that it doesn't mean anything to us anymore. Unfortunately when the day arrives that we have a massive out of control provincial debt and declining revenues from our - saviour - crude oil, where will we be then? There is no doubt that as much as Nalcor proclaims that oil prices will increase, so will interest rates. What happens when we have to pay all of the increased costs to service our massive provincial debt? Unfortunately I feel that Nalcor will care less when that time rolls around!

  • Cyril Rogers
    August 13, 2011 - 12:57

    I get the facts, according to NALCOR! But, as the saying goes, the devil is in the details. NALCOR has been spewing the same "facts" about this project for some time now but seem woefully short on answers when it comes to cost overruns, the "actual" cost of the final product, the amount of the rate increase that we, as ratepayers are guaranteed to incur. Where is the real demand for more power in the future? How much will it cost to upgrade Holyrood, then to be used only when demand is greatest? What has happened to all the power generated at Bishop's Fall since the closure of the Grand Falls mill? Somebody should be using an already existing facility with that amount of power! How did the addition of that power project get absorbed into the system and how much did it reduce dependence on Holyrood? It is clear that NALCOR doesn't care how much it costs since they have a captive set of ratepayers - you and me- to take up the excess costs. This project has fatal flaws and is being touted purely for political purposes and to ensure Danny's legacy. Those of us who are critical are simply voicing our concerns about the future.

  • Maurice E. Adams
    August 13, 2011 - 11:51

    HOLYROOD:------- FACT ---- usage has gone down 59% over the last 10 years. ----- FACT ---- world price for oil has gone down (not up as Nalcor forecasts) about $30/bbl over the last 3 months ------- FACT ----- Nalcor's forecast increase for the cost of oil for Holyrood for 2010 was almost 150% HIGHER than what was actually experienced ----- FACT ---- Holyrood alone has about 6 times the energy capacity that Vale's Long Harbour plant will need ---- FACT ---- Over the last TEN (10) years capacity usage for Holyrood has been a high of 58% and a low of 18% ---- FACT ---- that period includes the period when we had several operating paper mills --- we now have less than one.

  • John Smith
    August 13, 2011 - 11:11

    So, Murice...we are to believe that your stats are correct, and the team of 100 NL people, trained professionals, who love our provice as much as you do are lying to us? GHive me a break. In fact, stats show that our power usage has increased every year since they started to compile data...not only that, but NALCOR has lowballed the increases, to make it look lower tahn it is. You, and those of your ilk want us to remain isolated, with limited potential, with nothing to offer, poor, destitute, with Hoolyrood pouring tons of hydrocarbons into the air every January, and our rates tied to the ever increasing cost of oil. You are wrong Maurice...wrong!

    • Spin cycle on bust
      August 13, 2011 - 12:20

      John Smith, most people would put their paycheques and self reward ahead of their love for the project. Pay an analyst enough and they'll find a way to make their work fit their employer's desired outcome. Kinda like the political shills that pollute these comment sections spinning whatever they need to spin to make their chosen party look favourable. Your self proclaiimed 'facts; are not facts at all, power demand in NL is actually less than it was 5 years ago.There is no potential in having an excess of overpriced power. Companies will go where the lowest rates are, and the only ones that will pay the unnecesaril inflated rates will be the residents of the province who will have no other choice. If you're actually concerned about hydrocarbons, check out the hydrocarbons that will be produced to complete the project, then come back and tell us what a 'green' project this is. The 'ever increasing' cost of oil will only rise to the point where other energy sources such as natural gas are a lower cost alternative. The U.S. is already tapping into their 100 year supply of shale gas to address their energy needs and are producing new power at less than 1.2 the cost of what Muskrat power will ultimately need. With political spin doctors trying to influence public opinion to support this unnecessary project, God Guard Thee Newfoundland indeed. Our politicians and their cronies certainly will not.

  • Fintip
    August 13, 2011 - 10:54

    When it comes to Muskrat, I am a skeptic - this despite the fact that there is no incontrovertible proof that Muskrat is non-viable. The corollary, unfortunately, is that no acceptable proof has been advanced by NALCOR that it is viable, or at least that it is more viable that other potential solutions to the province's energy needs. I am a skeptic because, like many other Newfoundlanders born under the cross of the God of Ignorance and its nearly forgotten son - Joey, I have a genetic predisposition toward skepticism when it comes to multi-billion dollar projects. Unlike some other skeptics and wannabe Liberal leaders, my skepticism is not predicated on the prospect that Nova Scotians will pay less for our electricity that we will. That is an emotional argument that has no place in the hard economics of mega development. (In sales it is known as 'remaindering'.) Unlike the Telegram, I am not opposed to Muskrat out of loyalty or subservience to owners in another province - a province whose hydro-electric monopoly in eastern Canada is threatened by an Anglo-Saxon end-run. My skepticism is based in part on Muskrat's implications for the province's already burdensome debt load. Whether Muskrat financing is secured outside the Province's balance sheet is moot; contrary to Ms. Dalley's assurances, it is not as simple as saying the revenues outweigh the costs so - poof - the debt load disappears. It comes down to the risks that the bond rating agencies attach to that future stream of earnings. Never mind that we could be entering another great recession in which the demand for power not only fails to rise as NALCOR predicts but actually shrinks (look back twenty years at Ontario Hydro's demand forecast for that province). What if a large industrial customer fails and its demand disappears -let's say for example the Vale hydromet operation at Long Harbour? NALCOR needs to show us how sensitive its financial model is to the loss of such a customer. Indeed the soft underbelly of Muskrat as envisaged by NALCOR is the sensitivity of its business case to key assumptions and variables. Beyond the reliability of its demand curve is the certainty relating to its capital costs. How sensitive is the model to a 25% over-run (which is the minimal likely scenario), versus 50% or even 75%. Add to that NALCOR's and the Province's legal exposure in the event of a sustained disruption in the delivery of power. Two harsh environmental water crossings make this more than a casual consideration. I am and will remain a skeptic until these and a great many other questions are answered satisfactorily. I am a skeptic above all because I believe in Murphy's Law and because I believe the consequences of error could be catastrophic for our children and grandchildren. But I am not a naysayer. I do not believe that doing nothing is always the best answer. My mind is open to arguments that are clear, cogent, comprehensive, consistent and compelling but thus far, unfortunately, that is not what has emerged from NALCOR.

  • james
    August 13, 2011 - 10:33

    what can go wrong, i mean come on people everyone,s hero put this deal in place

  • John Smith
    August 13, 2011 - 10:29

    This is a great project. It is so sad that the Liberal party of NL has taken a great project, and tried to use it to further their own paychecks. So very sad. All the answers are there, for all to see, how much more do you need? We need power, not just for expanding household use, or the 90 megawatts for the plant in long HR. or the upgrades to the riferery, of the 25 megawatts for the building of the Hebron, and possibly other GBS in Bull Arm. But for future endeavors. I mean how incredibly stupid can people be? Can they read? perhaps not. But with the liberals constantly spewing their lies everyday it muddys the waters more everyday. Yvonne Jones evensaid she would still go ahead with the project if she was elected Premier, back when she was running. Please liberals stop lying, please stop making up lies to futher your own gain. This project is too important to us all.

  • dgr
    August 13, 2011 - 10:13

    Vale's nickle processing plant power is already available, after they expropiated abitibi in grand falls which had 120 megawatts of power and Vale only needs 85 megawatts. What's going to happen to the 150 megawatts of power that Kruger in Deer Lake as when it shuts down after government stops bailing them out. This is all smoke and mirrors people, don't be fooled by these people. Self-financing project on backs of all taxpayers in newfoundland and labrador, while Nova Scotians get free power for 35 years. Upper Churchill over again. If we have no power contracts for the excees in the US then no Muskrat project. Get involved.

  • DM
    August 13, 2011 - 09:49

    Muskrat Falls is not a good deal for the rate payers of this province. The projected electricity costs sourced by Nalcor outlining costs with and without Muskrat Falls illustrates that any savings with Muskrat falls are marginal and simply not low enough to go forward with this immense undertaking! There are so many uncertainities with the developement of this project. The cost over-runs, the unknown , the enviromental impact etc. If every rate payer were a business partner and used these facts the project would be turned down flatt. The risk versus profit is simply too great. The common sense thing would be to delay this project and go back to the bargainnning table with Qubec. This projec If conceived has the potential to be another sell out for the people of this province! It's amazing to think that the current polictical leaders would beleive the people of this province would risk so much for the promise of so little!

  • Robert
    August 13, 2011 - 09:34

    Wow, the journalism standard of the telegram has certainly gone downhill. Publishing a one-sided sales pitch extolling the merits of the single largest government spend in this province's history without investigating the validity of the proponents claims is as lazy as it gets. Was it too hard for the Telegram to find industry experts not employed by NALCOR to verify the validity of their claims? I'm sorry, but I have no faith that the Telegram's senior editors and reporters asked ''every conceivable question'' about this project. They may have asked, but they never followed through with what good journalists do - fact checking. Did NALCOR have a hand in reviewing the story before it went to print as well?

  • Maurice E. Adams
    August 13, 2011 - 09:32

    Nalcor says ---- "We're at the point we we have to do something"? ------ Our demand in 2010 was FIFTEEN (15) percent lower than what it was 6 years ago in 2004 !!!!!. Where was the urgency then?,,,,,,,,,,, Even Holyrood, which has a capacity of about 500 additional MW, was only used at about 25% capacity that year. Now how can anyone say that "we have to do something"? The only significant demand increase on the horizon is from Vale's Long Harbour project --- which will only bring our demand about half way back to where we were in 2004. Last year demand actually went down about twice as much as Nalcor forecast that it would go UP!!!. -------- Last year demand was almost identical to what it was (ZERO AVERAGE GROWTH) ---- 21 years ago in 1989. While Nalcor has said more than once that demand went down over the last few years because of paper mill closures, their 2010 Annual Report confirms that last years reduction was about 80% due to reduced residential sales and only about 20% due to reduce industrial sales !!!!! What happened Nalcor's obligation to its shareholders to be truthful in its message?

  • Three Ring Circus
    August 13, 2011 - 09:22

    Given thr controversy you would think that there would have been some independent analysis done on this project, such as by MUN, but not a peep, why is that. Also, Quebec is against this project so why haven't they, with all their expertise, produced numbers that would prove that this is money loser. There are so many questions and too few reliable sources (M.E.A is not a reliable source either) with the answers.

  • patrickM
    August 13, 2011 - 08:32

    This is a very one-sided article. Simply asking Nalcor these questions and printing their responses is not exactly "grilling" them on this important issue. We need the media to investigate Nalcor's claims to help us know what's what with Muskrat falls. For this article, the Telegram could have just as easily left out their questions and copy/pasted information from Nalcor's website and press-releases.

  • dupce
    August 13, 2011 - 08:07

    I have this feeling that there is something wrong with this project. The fact that The Telegram is asking questions and Nalcor is feeling the heat in having to response is only the tip of the iceberg. As far as I’m concern the Rock needs to develop the project but know what you are getting into. Most homes on the island have to stop burning wood.

  • George S
    August 13, 2011 - 07:38

    The lowest cost alternative involves Nalcor using the "in kind" clause it negotiated with Hebron deal, receiving crude oil instead of royalties, trading the crude for bunker or making a through-put arrangement with a refiner and thereby, fueling Holyrood on "foregone revenue" instead of burdening our debt load. Yes, Holyrood needs a scrubber IF it continues to burn higher sulfur bunker. If not, then not. Carbon dioxide cannot be scrubbed and low NOX burners could be added. As Holyrood was operating during the baseline year for Canada's setting of greenhouse gas limits, the decision by NL to reduce carbon emissions beyond 15% would be one of policy NOT a regulatory requirement. A good point is made about the banks wanting to finance the project. The question that could settle the debate on the financial merits of the project is: would there be competing bids from banks if there was no loan guarantee?

  • madan rana
    August 13, 2011 - 07:36

    On the per unit basis, Gull Island and not the Muskrat Falls is the cheapest source, provided there is buyer for the extra energy. As there is no firm buyer for the extra energy for Muskrat Falls so both projects are on equal footings. Nova Scotia is getting 20 percent of the Energy for free, for simply building the line to their maket for 35 years, which is as bad as we had in the past for Upper Churchill where Hydro Quebecc built the transmission lines, paid a small amount and we all know it was a bad deal. Granted it may give us the access to the market, but if there is no buyer, then it has no meaning or as Nalcor claims that there is big market available, then why not develop the cheaper ( per unit basis) energy source which is Gull Island. So something is missing, it needs an independent review. otherwise, whole project is being done to show that it can be done without Quebec, which is not a good enough reason. Thanks