Published on July 13, 2012
Premier Kathy Dunderdale (right) and Nova Scotia Premier Darrell Dexter speak with reporters in the main lobby of the Confederation Building Thursday evening after meeting at Dunderdale’s office on possible cost overruns in the development of the Muskrat Falls project. — Photo by Joe Gibbons/The Telegram
Published on July 13, 2012
Premier Kathy Dunderdale (right) is joined with Nova Scotia Premier Darrell Dexter as they answer questions from reporters in the main lobby of the Confederation Building Thursday evening following a meeting at Dunderdale’s office. The meeting was about the development of the Muskrat Falls energy project and its possible cost overruns. — Photo by Joe Gibbons/The Telegram
N.S., N.L. premiers reiterate project is best option
Premier Kathy Dunderdale and her Nova Scotia counterpart Darrell Dexter planned to have a private chat Thursday afternoon about Muskrat Falls.
Officially, the final decision on whether or not to proceed with Muskrat Falls is months away, but in comments following the meeting, Dunderdale and Dexter made it clear that as far as they’re concerned, it’s the only viable option to satiate electricity demand in Nova Scotia and Newfoundland.
“What’s the alternative? To either ration energy or sit up in the dark. We have to pay for energy. Where’s the least-cost alternative?” Dunderdale said.
Without any fanfare or public announcement, Dexter arrived in the province Thursday afternoon to talk to Dunderdale about the massive hydroelectric project critical to the electricity demands of both provinces.
When reporters got wind of the meeting, they showed up at Confederation building and staked out the lobby.
Both Dunderdale and Dexter downplayed the significance of the meeting, but it comes at a critical time just before Nalcor draws up final “Decision Gate 3” cost forecasts later this month. The final numbers forecast are what the
government will use to decide whether or not to go ahead with the project.
Dunderdale cautioned the cost estimates are going to be higher than the $6.2-billion price tag originally quoted back when the Muskrat Falls deal was first announced in November 2010.
“The numbers that we’ve been working with are almost two years old, so costs certainly would have changed,” Dunderdale said.
“We’re waiting for decision gate three numbers. I can tell you there’s nothing startling in terms of the information that we’ve had so far. There’s nothing unexpected or nothing to panic about.”
Dexter said he’s worried about the cost overruns, but he’s still standing by the project.
“Whenever costs go up there’s always a concern, and you always take that into account,” he said. “As the costs associated with this project are drilled down and we found out more about them, the same would be true for the alternatives.”
Nova Scotia currently gets a large chunk of its power from coal plants.
Due to new environmental rules, six different plants will close in the coming years, and Dexter said his province needs to get replacement power from somewhere.
“If we don’t have a strategy to replace those, what is the cost associated with some other strategy?” he asked. “There has to be a strategy.”
As for this province, Dunderdale continued to stress the large-scale benefits of building Muskrat Falls and the associated transmission links that will tie Newfoundland’s energy grid in with Atlantic Canada.
At one time, the government effectively framed Muskrat Falls entirely as a domestic energy project, boiling the whole thing down to two questions: whether the province needs electricity, and whether Muskrat Falls is the cheapest way to generate that power.
For months, the government has been moving away from that message, and Thursday, Dunderdale stressed a different question.
She asked whether the province is going to be “in charge of its own destiny” when it comes to multiple mining developments in Labrador which are hungry for electricity.
“Is all of the development in Labrador going to be hostage to Hydro Quebec in terms of energy for development?” Dunderdale asked.
“That’s a big part of this debate that needs to take place over the next few months.”
Nalcor and its Nova Scotia partner, Emera, have yet to finalize the legal arrangements that will govern the development and allocation of Muskrat Falls and the associated transmission routes.
Back in January, after the two companies missed a self-imposed deadline, both said things were progressing well, but they wouldn’t place any further deadlines on it.
On Thursday, Dunderdale said things are still progressing well, but it’s unclear how much longer the legalities will take.
“It’s going to take whatever time it needs to take,” she said. “Some time before November, I hope. But whether that’s going to be September or mid-October I can’t really say at this point in time.”