CF(L)Co to sue on power deal

Rob Antle
Send to a friend

Send this article to a friend.

Court action targets lack of good faith in Upper Churchill contract

The operator of the Upper Churchill power plant is generating a court challenge to reopen its disastrous long-term electricity deal with Quebec.
"We have done extensive research on this particular action," Nalcor Energy CEO Ed Martin said at a news conference late Monday afternoon.
"We're confident. It's a very serious case. And we have no choice but to proceed."
Nalcor - the province's Crown-owned energy corporation - owns roughly two-thirds of Churchill Falls (Labrador) Corp., which runs the Upper Churchill power plant.
On Nov. 30, Martin sent a letter to Hydro-Quebec president Thierry Vandal asking him to re-negotiate pricing terms for the remainder of the agreement, citing "good faith" provisions of Quebec's civil code.
Hydro-Quebec did not reply by last week's deadline.
See 'ENTIRELY', page A2
"As a result of their failure to enter into discussions to re-negotiate the contract terms, I have instructed CF(L)Co's lawyers to proceed with legal action," Martin said.
"We will be filing a motion in the Quebec Superior Court in the coming weeks detailing the basis of our claim to have the pricing terms of the Upper Churchill 1969 power contract amended for the remainder of the contract."
Martin told reporters the matter could take two to three years to work its way through the court system.
He deflected questions about exactly what power rate CF(L)Co is seeking through its legal action, noting only that it would be a "substantial" increase.
The current purchase price of Upper Churchill power is roughly one-quarter of one cent per kilowatt hour. In 2016, that price will drop to one-fifth of one cent.
The contract runs until 2041.
According to Nalcor, those prices mean Upper Churchill power will be sold to Hydro-Quebec for less than five per cent of its recent commercial value over the contract's remaining 32 years.
Newfoundland and Labrador officials have contended the province nets only $63 million a year from the lopsided arrangement, while Quebec receives an estimated $1.7 billion annually.
"This inequity must be addressed and the legal opinions we have received support the legal action we are taking," Martin said.
Last month, Quebec Deputy Premier Nathalie Normandeau said there was "nothing new" in the request.
"This isn't the first time that Newfoundland has tried to challenge the agreement that was signed on Churchill Falls," Normandeau told reporters in Quebec City in early December.
"The Supreme Court ruled in 1988 in favour of Quebec. So, for us, there is nothing new, and I'm not going to comment any further."

Different action
Martin insisted the pending court challenge is "entirely different" from the issues previously examined by the Supreme Court of Canada.
The new action will be based in Quebec law, while the 1988 challenge dealt with actions by the Newfoundland and Labrador legislature.
Meanwhile, the Upper Churchill lawsuit plans are separate from another looming tussle between Nalcor and Hydro-Quebec.
Hearings are set to begin today at Quebec's energy regulator over Nalcor requests to transmit Lower Churchill power through Quebec to potential markets in Ontario and the northeastern U.S.

rantle@thetelegram.com?

Organizations: Hydro-Quebec, Quebec Superior Court, Supreme Court of Canada

Geographic location: Quebec City, Newfoundland and Labrador, Ontario U.S.

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments

Recent comments

  • TaxWatch
    July 02, 2010 - 13:34

    The Upper Churchill is a NL asset, Nalcor is a NL company. Why isn't this being dealth with in NL courts? Why haven't the NL Government amended it's laws for contract fairness, as Quebec did over 10 years ago. What do we expect to win from the Court of Quebec? They will be looking out for Quebec's interest, not NL.

    If there is any chance of getting this contract changed, WILLIAMS face would be all over this.....Go ahead Martin you take the fallout on this one.

  • Taxpayer ll
    July 02, 2010 - 13:31

    Just read these first three posts. The sour defeatism that has plagued us for decades oozes out of each word. They say lie down fellow Newfoundlanders, let the jack booted Quebecers stomp you into the ground as they collect their billions. Don't do anything, don't say anything, just lie there and take it, because that's all your any good for.
    I for one reject the stance of the aforementioned posters. I for one hope and pray that the men and women that we elected will do everthing in their power to thwart what HQ has done, and will do to this Province. Please don't do what these posters want you to do. Don't lie down, don't capitulate, fight this wrongdoing for every proud Newfoundlander.

  • greg
    July 02, 2010 - 13:30

    MHA's had a good run at it, now its time for the Tory Lawyers to line up at the public trough as they all prepare to charge into the windmill on the French Crusade.

  • Truth
    July 02, 2010 - 13:21

    Good luck, Dancor!!! You'll need it in SPADES!!!!!!

  • don
    July 02, 2010 - 13:18

    What is this nonsense? Dictator Danny and his cronies as so desperate to sort out the Upper Churchill/Lower Churchill mess that they will even attempt to use Quebec law against Quebec Hydro. This is total madness! Newfoundland not only agreed to the lopsided Upper Churchill deal in 1969 but promoted it as a great deal for the Province at the time! A contract is a contract, live with it Danny and quit your whining. The thought of lawyers for the Government of Newfoundland and Labrador will be standing in a Quebec court essentially arguing that politicians and bureaucrats in Newfoundland are stupid! The fact is, the Government of Newfoundland agreed to the Upper Churchill rip off in the first place. Now they are hoping the Quebec court will provide them with a court ordered legal fix for their own stupidity. Utter Nonsense! This is going to be another costly and major embarrassment for Newfoundland and Labrador. The only bright side to all of this is that it looks like the good people of New Brunswick are going to save Danny's arrogant behind by stopping the wholesale divestiture of NB Power's hydro lines and grid system to Hydro-Quebec. Dictator Danny may have dodged a big political bullet this time! So much for Danny's reputation as a political prophet and economic development guru!

  • Give it
    July 02, 2010 - 13:14

    Who is paying for this lost cause and what is the estimated cost to the taxpayer and consumers in this province? This is now the third time this option has been played. When will this utility return the losses to the rate payers for the past failings? We are paying for this foolishness in more ways then one.

    I for one am getting sick of paying for lost causes. Hows about you?

  • Frank M
    July 02, 2010 - 13:13

    Mr. Ed Martin has publicly stated on 2 media outlets that this action will not be heard in the Courts for 3 years.

    That's three years that this irritant of history can be kept in the public mindset.

    And long enough to carry the Province through another General Election.

    Quite sad really.

  • Jerome
    July 02, 2010 - 13:11

    If there is any chance of getting this contract changed, WILLIAMS face would be all over this.....Go ahead Martin you take the fallout on this one.

    TaxWatch, you hit the nail on the head with that comment.

    When full autonomy, as was promised was not in the cards for Grenfell, who made the announcement? Darren King.

  • Donald
    July 02, 2010 - 13:11

    The sad part of all this is our utility bills will never go down no matter who wins.We will pay whatever the market will bear.They 'll blame Quebec forever and the lawyers will get their percentage always and won't worry about splitting junks to stay warm or if they'll qualify for a rebate.

  • TaxWatch
    July 01, 2010 - 20:23

    The Upper Churchill is a NL asset, Nalcor is a NL company. Why isn't this being dealth with in NL courts? Why haven't the NL Government amended it's laws for contract fairness, as Quebec did over 10 years ago. What do we expect to win from the Court of Quebec? They will be looking out for Quebec's interest, not NL.

    If there is any chance of getting this contract changed, WILLIAMS face would be all over this.....Go ahead Martin you take the fallout on this one.

  • Taxpayer ll
    July 01, 2010 - 20:19

    Just read these first three posts. The sour defeatism that has plagued us for decades oozes out of each word. They say lie down fellow Newfoundlanders, let the jack booted Quebecers stomp you into the ground as they collect their billions. Don't do anything, don't say anything, just lie there and take it, because that's all your any good for.
    I for one reject the stance of the aforementioned posters. I for one hope and pray that the men and women that we elected will do everthing in their power to thwart what HQ has done, and will do to this Province. Please don't do what these posters want you to do. Don't lie down, don't capitulate, fight this wrongdoing for every proud Newfoundlander.

  • greg
    July 01, 2010 - 20:19

    MHA's had a good run at it, now its time for the Tory Lawyers to line up at the public trough as they all prepare to charge into the windmill on the French Crusade.

  • Truth
    July 01, 2010 - 20:05

    Good luck, Dancor!!! You'll need it in SPADES!!!!!!

  • don
    July 01, 2010 - 19:59

    What is this nonsense? Dictator Danny and his cronies as so desperate to sort out the Upper Churchill/Lower Churchill mess that they will even attempt to use Quebec law against Quebec Hydro. This is total madness! Newfoundland not only agreed to the lopsided Upper Churchill deal in 1969 but promoted it as a great deal for the Province at the time! A contract is a contract, live with it Danny and quit your whining. The thought of lawyers for the Government of Newfoundland and Labrador will be standing in a Quebec court essentially arguing that politicians and bureaucrats in Newfoundland are stupid! The fact is, the Government of Newfoundland agreed to the Upper Churchill rip off in the first place. Now they are hoping the Quebec court will provide them with a court ordered legal fix for their own stupidity. Utter Nonsense! This is going to be another costly and major embarrassment for Newfoundland and Labrador. The only bright side to all of this is that it looks like the good people of New Brunswick are going to save Danny's arrogant behind by stopping the wholesale divestiture of NB Power's hydro lines and grid system to Hydro-Quebec. Dictator Danny may have dodged a big political bullet this time! So much for Danny's reputation as a political prophet and economic development guru!

  • Give it
    July 01, 2010 - 19:52

    Who is paying for this lost cause and what is the estimated cost to the taxpayer and consumers in this province? This is now the third time this option has been played. When will this utility return the losses to the rate payers for the past failings? We are paying for this foolishness in more ways then one.

    I for one am getting sick of paying for lost causes. Hows about you?

  • Frank M
    July 01, 2010 - 19:51

    Mr. Ed Martin has publicly stated on 2 media outlets that this action will not be heard in the Courts for 3 years.

    That's three years that this irritant of history can be kept in the public mindset.

    And long enough to carry the Province through another General Election.

    Quite sad really.

  • Jerome
    July 01, 2010 - 19:48

    If there is any chance of getting this contract changed, WILLIAMS face would be all over this.....Go ahead Martin you take the fallout on this one.

    TaxWatch, you hit the nail on the head with that comment.

    When full autonomy, as was promised was not in the cards for Grenfell, who made the announcement? Darren King.

  • Donald
    July 01, 2010 - 19:48

    The sad part of all this is our utility bills will never go down no matter who wins.We will pay whatever the market will bear.They 'll blame Quebec forever and the lawyers will get their percentage always and won't worry about splitting junks to stay warm or if they'll qualify for a rebate.