Powerless people can get angry fast

Russell
Russell Wangersky
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In a laundromat in Digby, N.S., this past week, the talk was all about tropical storm Arthur and the way people have had their power cut off for days.

Five or six people, united by the time it takes to reach the spin cycle, talking about the power failure that’s brought them together.

One woman’s father has chronic obstructive pulmonary disease, and he hasn’t had power since Saturday morning — it’s Wednesday now, and there’s still nothing.

He’s called the power company, told them his predicament, and still it will be 48 hours before he’ll get power. His daughter, angrily: “They said, ‘If you feel bad, go to the hospital.’ Go to the hospital? I wish they had been talking to me.”

The laundromat is full of people who have no running washers, no running dryers.

But they know a surprising amount about utilities.

And they’re not happy.

To be fair, there’s plenty of damage — just one stretch of road between Lunenburg and Middleton brings you a light-up sign that says “trees — power lines” and the next 15 kilometres is astounding, 30 or more trees hung up over the road in power lines, hanging out over the road like leafy swords of Damocles, waiting for you to drive under.

Hydro wires knocked down and rolled around in the woods like thread — there’s work here for weeks, not days, and none of it is simple.

Mistakes made

But in the laundromat, even among five or six people, there’s plenty of knowledgeable discussion about mistakes that have already been made.

One points out that a wooden pole line that suffered a particular amount of damage was supposed to be replaced by steel towers, but the maintenance work was delayed for future years (sound familiar?).

Another talks about newspaper reports of the numbers of line crews laid off and replaced by contract workers.

A third delivers the show-

stopper — “No matter what happens, Nova Scotia Power is getting all their costs back, plus a 10 per cent profit. Wouldn’t it be nice to be a regulated utility?”

The room is totally in agreement. The dryers spin as people nod.

Back to Newfoundland and Labrador.

More analysis

This week, another independent analyst, this one someone who goes by the initials JM but has had some remarkable analysis of the Muskrat Falls project in the past, looked at the most recent numbers for Muskrat Falls and suggested that, along with other fixes to the province’s electrical system, we could be looking at rate increases of some 85 per cent by 2018.

Back in May, I suggested something similar — that, based on the power percentage increases proposed by Newfoundland Hydro for such things as the new third line from Cat Arm, a very reasonable number for the increase to power rates, post-Muskrat, might be 83 per cent.

Since then, the cost for Muskrat Falls has risen by $800 million, all of which has seemed to bypass the public with nary a peep.

And now, Manitoba Hydro (an arm of which was hired to reaffirm for us what a great plan Muskrat Falls is) is being told by Manitoba’s PUB that their own great “energy warehouse” plan is a bust that could cost taxpayers plenty, and should be curtailed — with at least one mega-hydro-project pulled off the table and others going ahead merely because so much money has been sunk into them already.

The Conservatives, so far, have shown themselves to be completely behind the Muskrat Falls project. But just look back to January here: a handful of days of power troubles and costs literally flung Kathy Dunderdale out the door.

Imagine what will happen if all of the “power calculator” numbers that Nalcor has handed out turn out to be very, very wide of the mark.

The public, right now, may be quiet. They may be waiting to see whose numbers end up on their power bills.

But they are far from stupid. It takes very few hours without power for the public to get very, very angry indeed.

And it will take very few higher-than-expected power bills to do exactly the same thing.

Not too many weeks ago, Premier Tom Marshall was boasting that the province would make $31 billion or so in profits from Muskrat Falls.

Given that we’re the only ones who are going to be paying full price for that power, who exactly is going to be offering up the money that will be those profits?

And how angry will you be, if it turns out to be profits wrung from you and your kids?

You won’t be saying “Let’s all vote Conservative” at the laundromat, that’s for sure.

Russell Wangersky is the news editor of

The Telegram. He can be reached by email at rwanger@thetelegram.com.

Organizations: Nova Scotia Power, Manitoba Hydro

Geographic location: Muskrat Falls, Lunenburg, Cat Arm Manitoba

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Recent comments

  • Gerry Goodman
    July 13, 2014 - 12:25

    Least cost option is 37 billion dollars according to Ed Martin.

  • Maggy Carter
    July 12, 2014 - 16:39

    Who doesn't like comparison shopping. Side-by-side opinion pieces in today's digital Tely bring us the World According to Martin on the left and Wangersky on the right. In his offering 'Muskrat still the best option', Martin - I believe for the first time - pegs the average residential rate at 16.4 cents per kWh by 2018, which notwithstanding assurances to the contrary is the earliest Labrador power is likely to arrive on-Island. That represents something like a 40% rate increase. Citing an updated analysis from JM - that elusive power pimpernell - Wangersky puts it at 85% or so. So as not to be misunderstand, my going in position is that a rate rise of either magnitude could probably have been avoided had other options been given more serious consideration. As well, any increase must be looked at - not in the context of non-renewable energy dependent Ontario as cited by others - but against the backdrop of a province in which supposed green energy options abound. This province having among the highest electrical rates is analogous to Alberta having the highest gas prices: the owners of energy resources are seemingly entitled to some discount to the market. But here's the thing: aside from my enormous difficulty with Muskrat based on the disingenuous process used to get us here, I would not have railed against it if I thought either estimate was reliable or that the risks associated with this huge undertaking were reasonable and commensurate with the economic upside. With all due respects to JM, who has done a credible job thus far, I believe neither. As a soothsayer of sorts on large capital intensive projects, reading the cards on this one (despite Martin's insistence on reshuffling a stacked deck) is not difficult. Martin and Dunderdale at various times were channeling Montreal mayor Drapeau who insisted his '76 Olympics could no more have deficit than he could have baby. Even after the admitted $800 million Muskrat overrun, the potential for escalation remains far greater today than any prospect of a cost reduction. There are far too many engineering, construction, legal, financial and economic imponderables to find any light at the end of the tunnel. When construction finance costs are added back, we are only $1.8 billion away from doubling the original capital costs and the limits of the loan guarantee. Something north of $10 billion is almost certain. How such an increase will be reflected in average residential rates by 2018 and 2020 depends on how desperate NALCOR and the government of the day are to hide it. Already, of course, NALCOR has skewed the debt retirement schedule to shift a greater share of that burden onto our children and grandchildren. Within the limits of the province's capacity to substitute equity for debt, it could do the same for the over-run. That could succeed in capping nominal rates by 2020, for example, around the 20 cent level (or whatever homeowners can bear), but of course most of those same ratepayers - just wearing a different hat - would be picking up the shortfall as taxpayers. Wangersky is right - the very notion that a sitting premier could brag about a $31 billion profit from a project in which taxpayers are the only source of revenue beggars credulity. The statement presumes we're all idiots. It is an admission of how much he intends to gouge us above and beyond what is required to service the Muskrat debt - a hidden tax as Wangersky puts it. One thing we can be certain of is this: the numbers, assurances, rhetoric we hear on the reasonability of Muskrat in the run-up to the next election will be highly suspect. Like Martin's letter of comfort in today's paper, that sound you hear is the PC government whistling past the Muskrat graveyard - a graveyard that none-too-soon will claim the bones of more than one political career.

    • Cyril Rogers
      July 13, 2014 - 11:30

      Many well stated points, Maggy. The only frustrating aspect of your comments is the unwillingness or inability of The Telegram to allow their division into paragraphs that make them easier to follow. Your writing skills are superb and your points are most salient! I contacted the paper quite awhile back and asked that they allow comments to be more readable…but, so far, no change in the format. Perhaps Mr. Wangersky can take it up with the paper on behalf of those who choose to comment.

    • Maggy
      July 14, 2014 - 12:27

      Yes, raised that point with the Tely a long time ago but it seems it's a limitation of their software. What's amusing is that the Tely's own columns are paragraphed to death - almost every sentence is a paragraph. But thanks for the feedback. I share the concern you and others have expressed that this project - whatever strategic value government might attach to it - is almost certain to impair the quality of life in this province for decades to come. The most severe impact, unfortunately, will be on the baby boom generation. A sizeable portion of our population have retired - or will shortly retire - on modest fixed incomes. They will have difficulty adjusting when their utility bills double.

  • Crazy
    July 12, 2014 - 10:29

    First people have to understand, there four provincial party in N & L, Fourth one was creates by Mr Williams, Known has Nalcor.

  • Cyril Rogers
    July 12, 2014 - 09:59

    Incidentally, Ed Martin wrote a column today in your paper suggesting that the MF project will generate about $30 BILLION dollars in "nominal value over the life of the project". Does that square with Premier Tom Marshall's assertion that it would make a $31 BILLION dollar "profit" over its lifetime? I think not….and is yet another example of the spin and hyperbole the proponents have used to justify this fiscal white elephant. What Mr. Martin conveniently chooses to ignore is that virtually all of the cash flowing into NALCOR's coffers will come from the ratepayers of the province…... with a pittance coming back from subsidized sales to Nova Scotia. There is no evidence to suggest that any of that money will go back into the provincial treasury and, if the past record of NALCOR is any indication, they will find a way to blow it in ill-conceived "investments". One more point, Mr. Wangersky….the public may not be "stupid" but they have certainly been bamboozled by the PC administration…. and the evidence was available a long time ago. Yet, the majority of those who voted chose to endorse the reckless and risky policies of the Williams clique. While the alternatives were not stellar….it was clear that Williams and his successors were taking the province over a fiscal cliff. We had the opportunity to stop it in 2011….but chose not to…..and will rue the decisions taken at the ballot box then. Granted, there is no strong evidence that the opposing parties would have shelved Muskrat Falls…. but it was clear that the myopic administration headed by Kathy Dunderdale was too arrogant and self-absorbed to go in any other direction.

  • Jimmy
    July 12, 2014 - 09:58

    Thanks for quoting some nameless wonder Russell. What a complete and utter farce. Have some pride in your sources, and at a minimum get a real name. The most biased editor to ever grace the pages of the telegram.

  • Corporate Psycho
    July 12, 2014 - 07:01

    Once the higher than expected bills hit there won't be enough tar and feathers in NL for Danny Williams.