Upper Churchill deal, legal disputes, access to energy markets all tackled in context of Lower Churchill
A recent photo of Muskrat Falls. — Telegram file photo
The government continued its roll-out of information relevant for consideration of the Lower Churchill project Friday, releasing three more discussion papers written by the Department of Natural Resources.
The papers deal with: why Gull Island is not being developed before Muskrat Falls; the province’s legal battles over power transmission in Quebec; and the Upper Churchill deal — why the province is not waiting on 2041, expecting more power from that development.
In an afternoon news conference at the House of Assembly, Natural Resources Minister Jerome Kennedy spoke briefly on each topic and took questions from reporters.
The Upper Churchill power contract remains “a sore point” for people in Newfoundland and Labrador, Kennedy said, noting the divide of Quebec’s having received $90 billion from the project as of 2007, while Newfoundland and Labrador received only $1 billion.
“In 2010, Quebec paid $2.50 a megawatt hour for power from the Upper Churchill and sold the same for $82 a megawatt hour — more than 30 times what they paid for it,” he said.
As for waiting until the Upper Churchill contract expires, people in this province shouldn’t expect a flood of free power in 2041, the minister said.
“I know at one point I laboured under the illusion that as we waited for 2041 we would get free power, we would have unlimited power, but when you look at the corporate structure of CFLCo it’s not that simple,” he said.
“It’s not going to be Hydro-Quebec simply agreeing that all power will be given to Newfoundland and Labrador.”
Churchill Falls (Labrador) Corp. (CFLCo) will still exist — its ownership split between Newfoundland and Labrador Hydro (with 66 per cent stake) and Hydro Québec (34 per cent). Whatever happens with Churchill Falls, the interest of Hydro Québec simply can’t be ignored.
“There is no doubt that Newfoundland and Labrador will benefit in 2041, but it’s very difficult to envision what exactly will take place.”
As for waiting for 2041 power, it means there will be costs associated with maintaining the Holyrood thermal power plant, as well as costs with adding new generation to meet demand in the meantime.
In the courts
Meanwhile, a description of the province’s legal actions on the Upper Churchill and attempts to access Quebec’s transmission grid, was offered in “Legal options: S92A, Good Faith and Regulatory Proceedings in Quebec.”
In summary, the Upper Churchill contract has been challenged multiple times, but with no success to date.
The latest challenge is ongoing. Hydro-Quebec filed a statement of defence to the action in May 2011, pre-litigation is continuing and a trial is expected in Quebec in fall 2013.
“Appeals can be expected, regardless of the result, including possibly an appeal to the Supreme Court of Canada,” the paper states.
Attempts to secure transmission of more power through Quebec have been similarly rebuffed.
The site at Gull Island sits at a
point between Churchill Falls and Muskrat Falls. A dam at Gull Island would offer much more power than one at Muskrat Falls — with 2,250 megawatts and 824 megawatts, respectively.
“But what has been clear for all governments who examine this option is we need access across Quebec and without transmission access, Gull Island is not currently, unfortunately, a feasible option,” Kennedy said.
There needs to be a place to send all of the power from Gull Island and, without access to outside markets, the power needs within the province are simply not enough.
The transmission lines proposed as part of the Muskrat Falls development, to the island and then to Nova Scotia, would not have enough capacity to handle all of the power from Gull Island, and the province is continuing to seek a deal that would see power flowing through Quebec’s grid to Ontario or elsewhere, Kennedy said.
“The (public relations) tour continues on, rolling on strong and again three more reports coming up. I guess it’s been almost a dozen now since Halloween,” said Liberal MHA Andrew Parsons.
“This is a charade as far as
I’m concerned,” he said. “They’re rolling this out — this has been the third or fourth press conference this week. A number of papers this week, 10 days before a debate was supposed to have happened and we’re getting this information now. If they really wanted people to see this and digest it, they’re going to give it to you in advance. And again it goes back to we’re taking this on the government’s word.”
The NDP hosted a town hall event on the Muskrat Falls development on Thursday night at St. Teresa’s Parish Hall in St. John’s. However, no NDP MHAs took in the next day’s news conference.
A party staffer at the briefing said all were busy and would be unavailable for comment on the latest documentation and arguments put out by the government. The Telegram offered to accept a written statement, but no statement was received as of press time.
Meanwhile, at least one more discussion paper is yet to come from the government. Kennedy said the paper, on the environmental benefits associated with closing the Holyrood power plant, can be expected next week.