20 questions for the premier

Russell Wangersky
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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 rwanger@thetelegram.com.

Organizations: The Telegram, Canadian Press, Maritime Link CBC Newfoundland Hydro

Geographic location: Muskrat Falls, Nova Scotia, New England Nova Scotian Newfoundland and Labrador Canada North Slope U.S.

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Recent comments

  • Corporate Psycho
    October 21, 2013 - 21:29

    The truth on MF will not be pretty.

  • Redgrave
    October 20, 2013 - 11:10

    Regarding questions five and six: Nalcor is working around the clock analyzing the long term feasibility of lending participation from several sources. It is similar to an individual with a good reputation recieving offers of credit in the mail, but on a much grander scale. Some are viable and welcome, while other's are kept for consideration, but never used. The aquisition of credit isn't an issue--covering the cost of borrowing without damaging the average consumer is the big challenge. The completion of viable sea links will ultimately make Newfoundland stronger and more appealing regardless of cost wich will certainly run way over budget. When Nalcor is ready, they will let us know the details of what will surely be some very creative financing.

  • Sam
    October 19, 2013 - 15:37

    Wangersky showing his 'non partisan' side again! I guess it's a good thing most NLers love negative media coverage. If not Russell wouldn't have an audience at all! I used to buy the Telegram all the time...now I read a scattered piece that someone puts on twitter. Wouldn't waste my money on that paper anymore.

    • Avid Reader
      November 07, 2013 - 18:26

      Sam, stop posting here. It is obvious that you have neither the interest nor the ability to understand the valid questions being asked by Wangersky and/or other good journalists in this province and in Nova Scotia.

  • John smith II
    October 19, 2013 - 13:54

    More questions: 1. How will Nalcor sell power into the US if they do not allow imports. Reciprocity is a must to get a FERC import license. 2. If we supply more than 167 MW peak power in winter to Emera, how will we meet the island needs if we close Holyrood? 3. In real dollars what risk does Nalcor have on maritime link over runs. Will this cost be recovered in nl rates. 4. What happens when a ice storm takes out the power lines down the northern peninsula. 5. Would muskrat falls still be the lowest cost option if corner brook mill shuts down? 6. Most importantly why are we not delaying the project for 5 years until we a) need the power and b) the current slate of resource projects are completed.

  • Concerned
    October 19, 2013 - 13:40

    Another very important question is if HQ are successful in court can Nalcor close Holyrood.

  • Mr.Squeaker
    October 19, 2013 - 12:27

    There is no decommissioning provision, in contradiction to JPR recommendations, necessary according to the Feds and the province, and NALCOR. They are building this to be flipped after all the free trade (new world order) is signed for europe, and for China on Halloween. If a Canadian entity owns this, it is open to litigation for all the steamrolling of rights, whatnot, but if it can be sold off, to appear administrativly in Shanghai, or Delaware, it flips the dynamic to allow arbitrated awards as in the Mobil Murphy oil v Canada case. We are being over informed, and undernourished by the constant stream of data based opinion, and opinion- based data framed to polarize this issue beyond reasonable argument.

  • Donna Thistle
    October 19, 2013 - 08:52

    Given that I was quick to take a piece out of Mr Wangersky for his demand that the premier resign, it may be relevant that I compliment him on this piece. It is of great value to the political process when professional reporters keep the public apprised of WHAT the government is doing or not. This piece (20 Questions) does ask important questions, holds the government's feet to the fire and refrains (for the most part) on personal attacks. The democratic system we live with suggests we let the (political) party pick their own and win or lose by the choice. Let the media feed facts, to voters, which will inform their vote.