Not long ago, Premier Kathy Dunderdale posed an interesting question. It came in the wake of a column I wrote suggesting that the best thing for her party would be for her to move on to greener pastures.
The twist she put on that column was that I am “no friend” of the Tories — fair enough, I’m not.
I’m not paid to be the government’s friend — there are enough people being paid handsomely to do that already.
But then she suggested that the reason I encouraged her retirement was that I’m an opponent of Muskrat Falls.
In reality, I’m not so much opposed as completely unconvinced — usually, projects that can withstand scrutiny answer all questions. Projects that can’t, ignore the questions instead. (“Mr. Sprung, how does the opaque surface of your greenhouse actually let in more light and help plants grow faster?” Answer: “It’s a secret process. Next question.”)
Dunderdale then pointed to the fact that, since The Telegram didn’t attend the two-day 37th annual conference of New England Governors and Eastern Canadian Premiers, we clearly didn’t understand how the northeastern states were really clamouring for Muskrat Falls power.
“And yet we didn’t have any
representation there from the province. … I’ve yet to get a call from anybody at The Telegram who’ve shown the slightest bit of interest. So that really has to make you wonder, what is the agenda?”
Leave aside that the meetings of New England governors and Eastern Canadian premiers is generally a snore-fest of the first order — their resolution on energy, for example, was 545 words long and said, basically, they’ll look at hydro energy if it is, overall, the lowest-cost option. Surprise, surprise.
Other resolutions? That alternate fuels for vehicles are a good thing and should be supported; that the group pat itself on the back for reaching greenhouse gas emission goals but should try harder still; that jurisdictions should work together in emergencies; and, that trains should be safer.
But I’ll answer Premier Dunderdale’s question — my agenda, anyway, is simple: does Muskrat Falls actually make sense for taxpayers and ratepayers?
In return, maybe she could answer a few questions of mine.
1) How do comments by Nova Scotia’s newly elected premier, Stephen McNeil, affect the federal government loan guarantee for the project? (McNeil told The Canadian Press, “I can be very clear to her that if it’s not in the best interests of Nova Scotia ratepayers, then we would not be supportive. … Until we see something new, Muskrat Falls is where it is, which is on the drawing board.”)
Premier Dunderdale has said that the Maritime Link is a commercial deal between Nalcor and Nova Scotia’s Emera. The problem is, though, that the agreement for the federal loan guarantee specifies that the Nova Scotia government must agree to indemnify the federal government for damages made by Nova Scotian regulatory or legislative changes. In other words, the government of Nova Scotia has to be an active partner — and, in case anyone forgot, the Nova Scotian premier had to sign the agreement for a loan guarantee to go ahead.
2) What happens if Nova Scotia doesn’t play? After all, the very start of the loan guarantee agreement states, “It is essential to Canada that the projects have national and regional significance …”
How does that change if Nova Scotia says so long?
3) Premier Dunderdale has said two other things: one, that the project could go ahead without Nova Scotia, and presumably, without the federal loan guarantee: “This project was planned around the people of Newfoundland and Labrador and could it stand on its own merit, only for the people of Newfoundland and Labrador, and it did and it does. … So if in your wildest dreams you had to come to a place that they were not at the table anymore, this project still makes sense for us.”
But she has also said the project can’t go ahead without the federal loan guarantee.
Which one is true?
The other questions are a little more basic, and several have been asked before.
4) What about new and cheaper power sources? Recently, a west coast dairy farmer was interviewed on CBC about his waste-to-electricity operation, a system that uses manure from his farm to generate electricity.
One of his concerns? He only uses 25 per cent of the power, and wants to sell the rest back into the grid. This province has no regulatory mechanism to allow that sale of power and, with Muskrat Falls, has actually moved to make it illegal for companies to generate and sell power into the grid.
Does this mean we are going to turn our backs on innovative methods to generate power in order to prop up Muskrat Falls and more expensive electricity? And does that make sense?
5) What is the status of the province’s search for lenders for the project?
6) What interest rate are those lenders being told to expect to make?
7) Nalcor has yet to release whether or not there is a power purchase arrangement (PPA) with Newfoundland Hydro — that arrangement will require ratepayers to pay for electricity whether it’s used or not. Will that PPA continue to be in limbo until all the bills come in?
8) The federal loan guarantee requires full insurance of the project. Has Nalcor obtained insurance?
9) What’s the rate for insurance, and what kind of risk are the insurers concerned about?
10) How much has it cost to find a solution to the quick-clay landslide threat of the North Slope?
11) Overall, are the bids that Nalcor is receiving in line with its expectations?
12) Why can’t taxpayers know what individual bid prices are?
13) Is the project on budget?
14) How have the project’s economics changed with the dramatic weakening of long-term oil prices?
15) With ratepayers in this province responsible for the full cost of the dam and transmission line, how will electricity prices be kept competitive for industrial users?
16) If industrial prices remain competitive — something that’s now, post-Muskrat, set by the provincial cabinet — how much will other users have to pay to make up for industrial discounts?
17) How low will rates for the mainland sale of power have to be to be considered “cost-effective” by U.S. governors?
18) Have negotiations to “sweeten the pot” to match the expectations of Nova Scotia’s power regulator taken place?
19) What’s on the table in those negotiations?
And No. 20 is the simplest of all: why is there so much we’re not allowed to know?
Russell Wangersky is The Telegram’s
editorial page editor. He can be reached
by email at email@example.com.