Construction of a dam at Muskrat Falls is one piece of the Muskrat Falls project. The project also includes building a new backbone line for power along much of the province and a power link between the island and Labrador, across the Strait of Belle Isle. - Telegram file photo
With the Board of Commissioners of Public Utilities' (PUB) public sessions on Nalcor Energy's proposed Muskrat Falls hydroelectric megaproject, there has been a great deal of project information gathered and released to the public.
While awaiting the board's final report (expected by March 31), The Telegram presents a collection of questions about the project, paired with answers as they are available to date.
Additional detailed information on the project is available on the websites of Nalcor Energy and the PUB.
Is this a done deal?
The Muskrat Falls project is not set in stone. It will need to be sanctioned by the provincial government if it is going to go ahead. That decision - "go" or "no" - is expected to come later this year. The decision will be made once the PUB has submitted its review of whether the project is the least-cost option for supplying power to the province, when compared with an "isolated-island" option. The decision will also follow discussion in the House of Assembly.
There will be no special session to debate the project in the legislature. The debate on Muskrat Falls will have to come as part of debate scheduled on the annual provincial budget.
Nalcor expects to have updated assessments of project costs by mid-year (the target is June), to assist the government in its decision.
In addition to this, the provincial and federal Environment ministers will issue a final decision on the environmental side of the project.
We've already spent about $500 million on the Lower Churchill project. How can this be if the project hasn't been approved?
About $119 million was spent by prior administrations from the 1970s to 2003.
Spending has centred on gathering information needed to assess options for meeting the province's power needs. This includes obtaining legal opinions on pre-construction agreements and power sharing with other provinces, as well as gathering documentation required for the environmental assessment processes and for assessing financing options.
Information collected goes beyond the Muskrat Falls project, including the development of Gull Island.
According to Nalcor, spending on construction will start if and when the project is sanctioned.
How much will this cost?
This question is still a subject of public debate.
The project has an initial estimated cost of about $6.2 billion (including the maritime link with Nova Scotia, to be built and paid for by Emera Inc., a Nova Scotia energy company).
However, concerns have been raised by critics about the potential for cost overruns.
Nalcor has prepared for overruns to the level of 15 per cent of the cost, having built the potential for overruns into its cost estimates.
Manitoba Hydro International has said overruns at 50 per cent would bring the Muskrat Falls option to about $200 million less than the "isolated-island" option. It has also been said a 50 per cent cost overun is as likely as being 30 per cent under budget.
Large overruns would mean a financial hit to both the provincial government and ratepayers.
Apart from this, the method of financing has been questioned. It has been asked whether the project is going to need more cash from the province up front than initially estimated.
Both Nalcor Energy and the Dunderdale administration maintain the project can be completed under current conditions and within the current cost estimations. Those estimations are to be updated before a decision is made on sanction.
Will I pay more for power when Muskrat Falls is built?
Yes. However, power costs are anticipated to increase no matter which option is selected for power supply.
Supporters of the project have emphasized the volatility of oil prices and the potential for those prices to increase quickly and dramatically, shooting up the cost of power.
Those opposed to the project have suggested oil prices might not increase as predicted, and there is a greater risk in the potential for cost overruns on Muskrat Falls construction moving beyond the contingencies.
Under the Muskrat Falls plan, Nalcor has estimated someone with a power bill of $400 in 2017 will pay $416 in 2025 and $469 in 2040. Compare this with the same customer paying an estimated $454 in 2025 and $627 in 2040, when compared with the isolated-island option.
Will I pay more for Muskrat Falls power than someone in Nova Scotia?
That question has yet to be answered.
Emera is set to pay 20 per cent of the cost for 20 per cent of the power from Muskrat Falls, and Nalcor is covering 80 per cent of the cost for 80 per ent of the power.
How those costs fall out once blended into two different systems will be different.
Muskrat Falls will provide about 20 per cent of this province's power supply and about 8 per cent of Nova Scotia's power supply.
Rates are calculated differently in each province. Nova Scotian rates today are higher than those in Newfoundland and Labrador.
Yet an agreement with Emera for construction of the link with Nova Scotia has yet to be settled.
When will the Holyrood power plant be shut down?
Should the Muskrat Falls project be approved, Holyrood will be used for some generation until 2021. After 2021, it will no longer generate electricity and emissions.
If the project is turned down, the facility will continue to be used as it is today, until it needs to be replaced, and $600 million will be spent on new environmental controls to address emissions from the plant, with an anticipated in-service date of 2015.
Will this project affect the fish in Lake Melville?
Concern for the regional fish species were raised by NDP Leader Lorraine Michael during the radio debate on Muskrat Falls held Feb. 8. Michael cited the report of the joint federal-provincial environmental review panel, released in August 2011.
The report notes concerns raised by the Government of Nunatsiavut over the possibility of "mercury moving downstream in sufficient quantities to contaminate fish and seals, and eventually require consumption advisories."
The panel stated there was "considerable debate" on the subject and "not everyone agreed with Nalcor that the effects would not be measurable past the mouth of the river into Goose Bay and Lake Melville."
It was recommended Nalcor conduct a comprehensive assessment of potential effects of the Muskrat Falls dam downstream and that the company publish the findings once the assessment was completed, prior to construction.
Nalcor says mercury sampling studies in river systems (including the Churchill) have shown concentrations will be higher downstream for a period of time, but will decrease as the river system transitions to open water. This means Nalcor expects concentrations to stay near baseline levels in Lake Melville.
The company has committed to monitoring fish and seal health in Goose Bay and Lake Melville.
I live in a town operating on electricity from a diesel generator. Will I come off diesel power with the Muskrat Falls project?
No. The transmission line associated with Muskrat Falls has been referred to as a "backbone" for the province and does not link in isolated power systems, such as those along the coast of Labrador and isolated communities on the coast of Newfoundland.
However, study of alternative options for power-isolated areas is underway and Newfoundland and Labrador Hydro is assessing potential ways to provide power to these areas in future.