Get ready to debate final 'Muskrat decision'

James McLeod
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Completed details will be sent to Manitoba Hydro

Nalcor Energy's offices in St. John's. - Telegram file photo

August is shaping up to be a pivotal month for the Muskrat Falls project.

In the next couple of weeks, Nalcor will draw together the final cost projections and detailed projections which will form the basis for a final decision on whether or not the provincial government spends billions of dollars to build a massive dam and associated infrastructure.

The government still refuses to put specific timelines or deadlines on any of this, but the endgame for the Muskrat Falls debate is starting to come into focus.

Later this month, Nalcor will draw together its final cost projections, and put together a comprehensive package of information - essentially all of the work that's been done on the project to date.

This information will be given to Manitoba Hydro International, an independent contractor originally selected by the province's Public Utilities Board. Manitoba Hydro will assess the sanctioning numbers, and do a report.

Once that report is done - likely sometime in September - it will all be made public and available to opposition politicians as they get ready for a special debate in the House of Assembly this fall.

Nothing has been set in stone when it comes to the special House debate, but comments from Premier Kathy Dunderdale seem to indicate it will likely last one week, and will be similar to the special debate held on Voisey's Bay in 2002.

There will be a resolution, there will be a question period and there will be a vote where MHAs stand for or against building the project.

The vote will be largely ceremonial, though. Because the government has a large majority, it's hard to envision a scenario where it won't pass. In any event, it won't be the House of Assembly that makes the decision.

After the special debate, Dunderdale's cabinet will sit down and make a final decision to sanction the project.

Unless there are further delays, that decision is expected by the end of November.

Cost will be topic

In conversations with the province's political leaders, the shape of this fall's debate appears to be coming into focus as well.

Representatives from all three political parties said that, the question to debate is: how much will Muskrat Falls cost the people of the province?

"What is the final cost going to be, and can we as a province afford it?" NDP Leader Lorraine Michael asked.

"Then, connected to that directly is will the cost become so high that it will not be affordable for the individual people in the province when it comes to the cost of electricity."

Liberal House Leader Yvonne Jones framed the debate almost exactly the same way.

"The majority of the people are concerned with what my light bill is going to be at the end of the day," she said.

"How much am I going to have to pay for electricity in Newfoundland and Labrador?"

Natural Resources Minister Jerome Kennedy said he believes Muskrat Falls is the best source of electricity for the province, but he also said people need to look at the bigger context.

"I would encourage everyone to continue to examine the issue, to look at the bigger picture especially," he said.

"What we're looking at here is a visionary approach to transforming our economy from non-renewable to a renewable resource economy."

Jones has been one of the most outspoken critics of the structure of the Muskrat Falls deal, which appears to be a somewhat separate issue.

Jones has argued that the government shouldn't be partnering with Nova Scotia-based Emera to build a subsea cable, allowing for the government to transport electricity to the Maritimes and northeast United States.

"We know today that the spot market prices are less than three cents per kilowatt, so that's not going to bring a return to the people of the province," Jones said.

"And if we're going to give power away at that rate, why aren't we giving it to industrial customers who are going to create long-term jobs for Newfoundlanders and Labradorians?"

The government argues instead that the subsea cable is critical for opening up an avenue for future electricity development, selling the much-vaunted potential of the province's "energy warehouse."

As the government bears down on the final sanctioning decision, though, the amount of work that's already been done on the project is staggering.

Nalcor has spent hundreds of millions of dollars on the project already. Three hundred engineers are currently being employed full time to do work on the project.

When Nalcor CEO Ed Martin starts talking about it, he lists one major piece of work after another that the province's energy corporation has been working on.

Nalcor has hammered out water management rights for the Churchill River to work in conjunction with the Churchill Falls hydro facility.

Martin personally sat down to negotiate during the benefits agreement with the Innu Nation. Nearly half the engineering work for the project has already been done.

Earlier this week, the government and Nalcor released roughly 1,500 pages of legal agreements with Emera and the Nova Scotia government - more than a year and a half's worth of work.

"These are very critical pieces of work that goes on behind the scenes," Martin said.

"The quality of work that's going on in behind is absolutely massive, and it's yielding really good results."

In a lot of ways, the meaningful decision on Muskrat Falls was made two years ago in the fall of 2010, when the government announced it was looking to develop the dam.

That's when Nalcor originally decided that based on their information, Muskrat Falls was probably the best decision. Since then, they've been studying that decision.

When the cabinet ultimately sits down to make a decision between Muskrat Falls and some other equally studied option, it'll be a question of whether there's any fly in the ointment that should stop the province from jumping headlong into the project.

"Sanction is a Muskrat decision. We have done some due diligence on the numbers on the alternatives that we said we would do, and everything extra that we have done has indicated and supported our initial views," Martin said.

"We're moving towards a sanction of Muskrat Falls." Twitter: TelegramJames

Organizations: Manitoba Hydro International, Public Utilities Board, Emera

Geographic location: Muskrat Falls, Voisey, Newfoundland and Labrador United States Churchill River Nova Scotia

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Recent comments

  • Tim Jamison
    August 06, 2012 - 16:49

    You know what's really odd with this whole thing? Harper, Rae, and Mulcair have declared support for this project. Strange. No vote pandering for 23% of Canada's population (Quebec)? The only opposition to this project is Newfoundland's provincial NDP and liberal parties and Quebec's government. What's up with that? Also, why is the Quebec government totally refusing to publically side with our local opposition to the project? They never discuss each other publically. You'd think friends-in-arms would fight side-by-side, but they are completely silent about each other and it's deafening. ??? Of course they're hiding something. They're the most corrupt province in the country. I wonder how much money it cost for them to bribe Newfoundland's leftist parties into trying to throw away our future.

  • Maggy Carter
    August 06, 2012 - 11:07

    I will add only one word to my characterization of you Smith. It is a word I have been loathe to use - even as I have seen you and your puppet masters use it time after time on the critics of Muskrat. The word is 'liar'.

  • Cold Future
    August 06, 2012 - 08:52

    Muskrat is the dam which will damn the NL consumer to pay through the nose to subsidize power delivered to grateful customers on the mainland and in the US. As the people of Sudbury Ontario said when we sent our Labrador ore to them to process," I thank you my family thanks you and my dog thanks you." Our only chance to stop this runaway train to disaster is is to have it independently reviewed by the PUB and then put to a referendum so that the people can vote, not just the puppets and baggers already set up to vote like little ducks in a row.

  • muskrat
    August 06, 2012 - 07:27

    We have no need for this power. There is 850MW of small hydro potential on the island if we ever do need it, and there are alternatives . We should be encouraging conservation, geothermal heating, pellet stoves, solar passive homes and developing enough small hydro on the island to replace the oil fired Holyrood plant and enough small hydro in Labrador to replace the diesel generators.. We also need to be paying off debt while we still can because the oil revenues are temporary.

  • Cyril Rogers
    August 05, 2012 - 15:54

    The only vote that would count, in my opinion, would be a Referendum on this deal. This project has crucial financial implications for the future and, if they get it wrong, we are going to be in serious trouble for decades. My perspective is that we, the people, should determine the viability of this project and I am prepared to accept the outcome only if ALL eligible voters have a chance to cast a ballot. It is too important to be left to the 48 members of the HOA and it is high time we acted like a responsible and mature democracy. Furthermore, we need to accept ultimate responsibility for the outcome of this decision and, if it is the financial albatross that I believe it to be, then we would truly have only ourselves to blame.

  • Maggy Carter
    August 05, 2012 - 15:11

    What I don't get is why the puppet masters behind the John Smith alias are even bothering to post their B.S. on this forum anymore. This train wreck is unstoppable. The fix has been in for a very long time. Even when new cost estimates of $8.5 Billion are released a couple of weeks from now, they will be a fraud. The actual capital costs of Muskrat will exceed $12 Billion by the time they cut the ribbon on this concrete monstrosity, and there isn't any way of knowing the true costs of amortizing an investment that large going out 57 years. The backroom hucksters who concocted this deal to make mega profits for mega corporations have sold it to Dunderdale and her crowd on the basis that it will serve some magical long-term strategic or tactical role in bringing Quebec to its knees sometime before the Upper Churchill contract runs out. Yes there might be a corridor but the grid upon it will have absolutely no practical value in terms of Upper Churchill or Gull Island output thirty years from now. Unlike Churchill which was a missed opportunity to make money, WE the public, the taxpayers, the ratepayers are financing this one on our own and so the potential for enormous loss will be ours alone to bear. It is the ultimate pipe dream for which every man, woman and child in this province could pay dearly for the next half century or more. The debate in the House this Fall is a sham. It is strictly for show. Dunderdale has already made up her mind. She knows the economics of this thing are beyond the pale. If she could roll back the clock to the day she took over as premier, she'd have walked away from it as Danny's bit of folly - not her own. She knows that abandoning it now could save the province, but would cost her her job. So, she has decided to brazen it out - dam the torpedoes, full steam ahead. Hence, back to my original question. Why are they still bothering with puppets and shills like Smith? Unlike NALCOR, maybe he was smart enough to negotiate a 'take-or-pay' contract for his Muskrat mudslinging job.

    • John Smith
      August 06, 2012 - 08:06

      I can assure you Maggy I am not a puppet, and I have no master. I am just a rate payer, sick of watching my bills go up and up and up every year.The question I have for you is why? Why would elected officials and the people at Nalcor conspire together to do something that is bad for our province?The present government ran with muskrat falls as one of the main objectives, and they won by a huge margin. They would win by a huge margin if they had an election today. Most reasonable, rational thinking people can read the available information and make a decision on their own, I did. I suppose you have read the information and decided that it is some big conspiracy, and they are all out to get us...wel Maggy, if that is true it is you who is the puppet, and I feel sorrow for you...

  • Maurice E. Adams
    August 05, 2012 - 12:26

    A new Muskrat Falls dam and generating plant (DG2 numbers) is $2.9 BILLION (add on about $500 million more for interest during construction and who knows how many more billions in cost overruns), while government's own pre-feasibility study concludes we could link Labrador and Newfoundland with a tunnel that could carry both people and NEAR-ZERO cost recall power from the Upper Churchill (and buy 4-5 cents power from Quebec if needed). ......... The cost for the tunnel (including interest and financing) in 2004 dollars is $1.7 billion. There is your cheaper and better option (maybe not for Nalcor) but certainly for the people, for Labrador, and for the province and country as a whole (SAVE BILLIONS and provide a REAL alternative route for Upper Churchill power).

  • Winston Adams
    August 05, 2012 - 10:30

    John, your veiw is that we need to build a costly project now that allows for growth for 50 years. But it is precently 4 times bigger than our present needs on the island. Even Manitoba Hydro said more incremental size projects would be desirable and offer less risk. And what can efficient heating offer, given our 600 MW of waste. You say you are100 percent for conservation, including heatpumps, which reduces demand by more than 50 percent. But both Nalcor and MHI suggest we can only reduce demand form efficiency by 2/10 of 1 percent per year! And both avoid any mention of the potential of heatpumps. Now you promote these as world class companies. Other jurisdictions are achieving more than 2 percent reduction from efficiency- a 10 fold amount compared to here. Now if you beleive in this technology 100 percent, both Nalcor and MHI must disappoint you with their assessment? And remember, we are fortunate that our climate here, unlike Manitoba, is a blessing for this technology to enable us to reduce waste and stabalize our costs. Many USA utilities are stabalizing their electricity prices by optimizing their local advantages like solar and gas. Our climate which gives us free water also gives us air temperatures in winter that allows us equivalent 5 cents /kwh costs for heat. Now you much praise Nalcor, but why the cone of silence by these utilities on their benefits? And remember , you can't stop great technology. I would wager that it will kill the demand forecast by Nalcor, which is merely 1 percent per year. Don't you see the risk? So time will tell on this. Would you care to wager? Just for fun? For me it reflects my faith in the technology and that the baseboard heaters will disapppear just as the coal and oil stoves. But you say this just won't fly. Why not? How often has skeptics said something won't fly?

    • John Smith
      August 06, 2012 - 07:58

      Funny, but just about every house I go into that has a heat pump has the air temp at about 60 degrees during the summer...must take a lot of energy to cool these houses down during the the winter they have to use baseboard heaters because the place is freezing...go figure...

  • John Smith
    August 05, 2012 - 08:47

    The bottom line is if we don't build muskrat to provide us with power for the next 50 years then what? if Dwight Ball, and Lorraine Michael don't think a hydro dam in labrador is the answer to our needs then what?Keep burning oil at Holyrood? Dam the last two or three little rivers on the island, convert holyrood to gas? Sure these ideas would work, but only for a short while, then we would have to go through this again, only we would be much poorer because of the billions it would cost to build dams and refurbish holyrood. Yvonne should know that as we need more power we will be able to get access to it immediately, because we only sell the power hour to hour. This is a project to provide the people of NL with power, that's it. You can completely illiminate the Emera deal, forget about any connection to the mainland, forget about selling power for even one cent a KWH, and the deal would still be the best option for us....tha's a fact. I have yet to hear one viable alternative from the opposition, or the naysayers, however I did just see a 7% increase in my power bill last month...funny Lorraine and Dwight are not talking about that though...

  • William Daniels
    August 05, 2012 - 07:48

    At least there will be a vote. I want to see who attaches their name to this dud. It will be recorded for history.

  • Don
    August 04, 2012 - 22:42

    Who's feeding Yvonne all the info. I know she is not smart enough to dream all this up on her own. Who is her puppet master thats pulling her strings ??????? Her federal master (Mr. Ray) says it's a good deal and her to-be leader Dean Macdonald says it's a good project. How dumb can she be ??

  • W Bagg
    August 04, 2012 - 19:50

    I'd like to see a vote in the house, then the people who were right and the people who were wrong will be known to all.

  • Winston Adams
    August 04, 2012 - 17:55

    Little interest it seems in reducing the 600 MW of waste electricity in our inefficient heating systems . No big ribbon cutting opportunities there . Proven , cost effective technology that can keep our electricity prices stable.

  • Casey
    August 04, 2012 - 17:40

    Now is the time for all who are against Muskrat Falls to get your questions to the opposition members of the house! Get at it!

    August 04, 2012 - 16:31

    Muskrat falls is the only option when it comes to a supply of power, when it is developed it will be the safest, cleanest, Most reliable and cheapest power in, not only Canada, But the world, There is no other cleaner,safer or More consistent power in the world, Than power generated by the force of water running over a water falls.

    • Kev
      August 05, 2012 - 13:04

      Muskrat will be the most expensive hydro power in Canada, if not the world. Permanently high energy prices. Permanently higher than the other provinces and states and countries, who NL will no longer be able to compete with economically. The PC legacy. Remember, this is what you voted for.

  • Maurice E. Adams
    August 04, 2012 - 15:40

    Where is the feasibility study that government said in 2011 that it would do when its own pre-feasibility study concluded that a tunnel across the Strait of Belle Isle that could carry both people and power (from the NEAR-ZERO COST Upper Churchill) could be bored at a cost of $1.2 billion (2004 dollars) ---- a full $2.7 BILLION LESS THAN the Muskrat Falls dam/generation plant. -------- Using newer DG3 numbers would mean a savings of possibly $3 to $4 BILLION ---- Ideal, given our decreasing revenue and very high cost and cost overuuns for Muskrat .

    • Tim Jamison
      August 06, 2012 - 17:10

      Aren't you the same man that was quoted as saying that he could convince anyone that 1 plus 1 actually equaled 3? You can't be trusted in any fashion.