Nalcor and Emera have signed the massive legal contracts which will govern the development of Muskrat Falls to supply hydroelectricity to both Newfoundland and Labrador and Nova Scotia.
Nalcor and Emera have drawn up 13 contracts totalling roughly 1,500 pages detailing the construction of the Muskrat Falls dam in Labrador, and the development of transmission lines through Newfoundland and under the Gulf of St. Lawrence to Nova Scotia.
The legal documents also lay out Nalcor’s access to transmission routes through the Maritimes and into the Northeast U.S., where the province’s crown energy corporation plans to sell excess power.
Nalcor and Emera have made the full text of the legal agreements publicly available, but the contracts were not provided until after 5 p.m. Tuesday.
At the news conference in the morning, and for most of the day, journalists had only government press materials to refer to.
The emphasis at Tuesday’s news conference was regional co-operation and mutually beneficial business arrangements.
Natural Resources Minister Jerome Kennedy sat alongside his Nova Scotia counterpart, Charlie Parker, Nalcor CEO Ed Martin and Emera CEO Chris Huskilson. They referred to each other by their first names while they talked about the 18 months of contract negotiations.
Martin said the contracts go into painstaking detail, but they maintain the spirit of the term sheet signed by the Muskrat Falls partners back in November 2010.
Emera will pay to build a subsea cable from Newfoundland to Nova Scotia; in exchange, Emera will receive roughly 20 per cent of the electricity generated by Muskrat Falls. During the first five years of the agreement, Emera will get close to 25 per cent of the electricity.
After 35 years, ownership of the maritime link will revert to Nalcor.
Nalcor will be able to transmit electricity to sell in the Maritimes, and will have access to Emera’s transmission capacity to sell electricity in the northeastern U.S.
The agreements leave the door open for Nalcor and Emera to expand that relationship in the future and partner to build future transmission capacity in Canada or the U.S.
The whole affair is still far from a done deal, though.
Kennedy called the signing ceremony “another milestone” towards developing Muskrat Falls, but the government still doesn’t have finalized cost estimates on how much it will cost to build the project.
Those final “decision gate three” cost forecasts are scheduled to be drawn together in the coming weeks. They will be scrutinized by Manitoba Hydro Inc. and then there will be a debate on the project on the House of Assembly this fall.
Even if the provincial government sanctions the project and construction begins, it won’t be until sometime in 2013 that Nova Scotia authorities will make a final decision on whether to sign off on their portion of the Muskrat Falls development.
Tuesday, Kennedy said based on everything he’s seen and heard thus far, it’s still full steam ahead.
“Muskrat Falls is the cheapest alternative to meeting the energy needs of Newfoundland and Labrador and it will provide lower rates to the people of Newfoundland and Labrador than its alternatives,” he said. “There’s nothing to indicate to me that Muskrat Falls is not the least-cost option.”
Parker said the Nova Scotia government is equally committed. The province is reliant on coal as a source of electricity generation, and based on new environmental standards, it needs to substantially transition to cleaner electricity sources of electricity by 2020, he said.
“(The project) shows what Atlantic Canadians can do when we approach challenges from a position of regional strength,” Parker said. “This is an important project for Newfoundland and Labrador, and Nova Scotia, but also for the entire region.”