A day after he emphatically endorsed the Muskrat Falls project, Wade Locke said his calculations were “probably not” a fair comparison of the options.
In an interview with The Telegram, Locke confirmed his figures only included the costs associated with building the hydro dam in Labrador and generating electricity. The numbers do not include the price of transmission from the Churchill River in Labrador to the island portion of the province.
Locke was comparing the Muskrat Falls project to an isolated island alternative, and he found Muskrat Falls is $2.2 billion cheaper than the second-best option.
But that cost difference doesn’t include the cost of transmitting power to the island.
When asked by The Telegram, “If that doesn’t include transmission, is that a fair comparison?”
Locke answered, “Probably not. You’d want to include transmission as well.”
The issue was raised during Tuesday night’s presentation by fellow economics professor James Feehan.
During the Q&A session, Feehan challenged Locke, saying the calculations were based on an assumption that it will cost around $75 per megawatt/hour to generate the electricity. Feehan said that doesn't factor in the cost to transmit that electricity from Labrador to the island. Factoring in those costs, he said the true cost is close to double — $143 per megawatt hour.
Feehan declined to do an interview with The Telegram on the issues he raised.
Locke said he believes Muskrat Falls represents the least-cost alternative for electricity the island will need by around 2017.
However, more than anything he said he was just trying to contribute to a more informed debate.
“The best thing for us to do as a society is to get information, and discuss that information in a rational, clear, respectful way,” he said. “Whether or not you think mine is credible or not, that’s fine. I’m just trying to contribute to the debate.”
The presentation definitely sparked a response from opposition political parties.
Liberal Yvonne Jones said Locke’s presentation hasn’t done anything to change her opposition to the Muskrat Falls deal.
She said she thinks the hydroelectric development should be used for the benefit of Labrador, and the mining projects there that need power.
“Any deal that we’re going to do for Muskrat Falls should be looking at where the immediate demands for the province are, and that’s with industrial customers in Labrador,” she said. “There’s nothing in this deal that talks about leaving power in Labrador. There’s nothing that talks about power purchase agreements for Labrador industry.”
NDP Leader Lorraine Michael said she’s open to being convinced that going ahead with the project is a good idea. Nothing Locke said moved her, though.
She said she’s hoping to see independent, in-depth examination of alternatives to Muskrat Falls before the project gets sanctioned.
“If there was an in-depth analysis that was done on an alternative like the wind power — an in-depth analysis — then I’d like to see it,” she said. “My understanding is that no in-depth analysis has been presented.”
jmcleod@thetelegram.com Twitter: TelegramJames
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And we look forward to your presentation on the costs of alternatives (without using any assumptions) at the Harris Centre. Yeah, didn't think so.