There’s not only a chance Nova Scotia utility Emera could back out of a deal to develop Muskrat Falls, but Nalcor could help make it easier for Emera to do so.
With a final decision imminent on whether to sanction the $7.5-billion megaproject, debate in the House of Assembly Thursday centred around whether the province is going out on a limb.
Opposition Liberals say the provincial government is making a risky move if it sanctions the project before it knows whether Emera is in or out.
Moreover, Liberal Leader Dwight Ball said if Emera backs out, it could be a costly proposition for the government.
“Section 3.5 of the term sheet for the federal loan guarantee states that if Emera backs out of sanctioning, they will owe Ottawa $60 million in the penalty. That does not sound like a committed partner to me. Yesterday, Emera went so far as to say that Nalcor has agreed to pay a share of the penalty,” Ball said during question period in the House of Assembly. “Why have you committed to giving away $30 million of taxpayers’ money to Emera to help Emera get out of the commitment to the Maritime Link?”
Natural Resources Minister Jerome Kennedy fired back, saying that from what he can see, Emera is totally on board.
“There is no indication anywhere that Emera wants to do anything but build the Maritime Link because they see it, Mr. Speaker, as a way to further their business, while the Government of Nova Scotia sees it as a way to get rid of the coal fire plants and to meet their environmental (targets,)” Kennedy said.
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But speaking to reporters later, he confirmed that some sort of arrangement may, in fact, be part of the negotiations between Nalcor and Emera.
“Yes, there is a discussion (about) what would happen with that $60 million penalty that’s outlined in the federal loan guarantee. There’s no definitive answer on that at this point,” Kennedy said to reporters.
He wouldn’t give a reason why Nalcor would pay part of the penalty to the federal government if Emera backs out of the deal. Instead, he said those sorts of questions are better directed to Nalcor CEO Ed Martin, who is the one actually doing the negotiations.
Nalcor is a Crown corporation owned entirely by the provincial government, and therefore takes its marching orders from Kennedy and the provincial cabinet.
When The Telegram contacted Nalcor for comment, a spokeswoman said, “Nalcor is in commercial discussions with Emera and cannot provide any comments at this time.”
Premier Kathy Dunderdale has said the cabinet will move to sanction the Muskrat Falls project before Christmas.
jmcleod@thetelegram.com
Twitter: TelegramJames
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