Opposition politicians are asking how expensive Muskrat Falls could get before the government walks away from the project. Apparently, at a price tag of
$8 billion, Premier Kathy Dunderdale would still consider the project.
On Thursday of last week, at the tail end of question period, NDP Leader Lorraine Michael asked if $8 billion is too much to pay to build the hydroelectric dam in Labrador.
“No,” Dunderdale responded.
Monday, Dunderdale was saying it was a “throwaway” question, and Michael was being “too cute by half.” She said it’s not as simple as yes or no.
“How can I agree or disagree in the absence of any other information? So we will have to see what Muskrat Falls is going to cost in terms of Decision Gate 3 numbers,” Dunderdale told reporters. “Only then will we be able to make a decision whether $8 billion is too much or not.”
The final cost estimates at Decision Gate 3 — the government’s formal decision on whether or not to sanction the project — will come together over the summer or early this fall.
Dunderdale warned that those cost estimates are going to be higher than the $6.2-billion cost estimate that the government has used up until now.
“Labour costs have gone up, capital costs have gone up, so the numbers are certainly going to go up, but don’t forget, all the alternatives are going up for the very same reasons,” she said.
As the costs increase, she said, it’ll be important to look at the other benefits of the project.
For one thing, she said, the Muskrat Falls plan allows for the province to connect to the North American energy grid, and set up a transmission corridor through the maritime provinces to the northeastern United States.
Dunderdale said that’s critical to developing future electricity projects.
“We have to find a way to get our power out of this province. There’s only a half million of us, and right now we are so dependent on non-renewables for our future,” she said. “We’re not going to be able to fill the treasury selling energy to a half-million people. I mean we’ve got over 5,000 megawatts of wind in Labrador.”
Up until now, the government has sold the project almost exclusively as a domestic power project.
The government has based its case for Muskrat Falls on whether the province needs the power, and whether the dam in Labrador is the cheapest option for electricity.
Now, however, Dunderdale is saying other factors need to be considered as well.
She talked about mining project in Labrador needing the power, and about the value of having the electricity corridor through the Maritimes as part of the project.
She said when the provincial cabinet is making the decision, they’ll be looking at more factors than just whether Muskrat Falls is the cheapest source of electricity for Newfoundland.
“There’s a lot of benefits that we get through our deal with Emera and having that other block of power, and the loan guarantee that we have never used defence of this project, and explaining this project,” she said. “If the numbers go up, then those benefits will certainly serve to mitigate that increase in costs.”
Michael didn’t like what she was hearing from Dunderdale, especially when she heard that the government would still look at the project if it costs more than $8 billion.
“I was quite disturbed by the answer, actually,” she said. “I think we’re going to be really shocked by what we see with the figures when they come out in the fall some time.”
Liberal Leader Dwight Ball said that if the cost estimates come in that high, the government needs to seriously look at other options.
He said even the original $6.2-billion figure seems too high.
“We will really seriously need to consider what Muskrat Falls does to our energy prices here in Newfoundland,” he said. “There’s so many questions about Muskrat Falls, and the $8-billion number certainly raises a lot more questions and a lot more concerns for us.”