Nalcor's doing more than it says

Michael Johansen
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At six o’clock a sudden explosion erupted and split the peaceful Thanksgiving Saturday evening, so large and loud it was heard many kilometres away from the blast site near Muskrat Falls. It was the sound of Nalcor exercising its brand of prudence.

This wasn’t the first such explosion heard in the hills along the lower Grand River in the past few weeks, and it won’t be the last. Nalcor is not just clearing forest, cutting access roads and stringing electrical lines to possible construction sites, as Gilbert Bennett, the company’s vice-president in charge of responding to the nattering classes, often claims.

Nalcor is also expanding old quarries and opening several new ones on both sides of the river. The company is already running heavy dump trucks to stockpile large mounds of gravel beside where the dams are supposed to go.

Bennett will no doubt say that undertaking this quarry work (work he failed to mention) is the prudent thing to do, that somehow the $243 million Nalcor has freely spent on premature work this year will save it an undetermined amount of money next year.

Bennett’s argument is wearing thin, especially since next year’s savings require that the project go ahead. That’s looking less and less likely, since all of the arguments in favour of damming Muskrat Falls are looking as threadbare as the “prudence” line. The proponents even seem to be having trouble convincing themselves that the development’s $8-billion to $10-billion price tag is not too much to pay, even though they still don’t have any outside markets willing to buy the overly expensive power. Newfoundlanders don’t want to be gouged for it either, but they won’t have a choice.

The dawning realization that consumers in New England do have a choice and they’ve chosen never again to buy from destructive megaprojects like the proposed Lower Churchill hydroelectric development came as bad news to Nalcor, to the Progressive Conservative government and to everybody else who wants more dams built in Labrador.

Without the United States, Nalcor loses at least a third of its predicted markets for Muskrat Falls power, and now that Premier Kathy Dunderdale has declared Quebecers to be predatory hostage-takers, Nalcor probably has to abandon hope of selling electricity to Ontario and other points west using the Hydro-Québec TransEnergie system. That leaves the Maritimes, but since Nova Scotia gets the electricity free, only New Brunswick and Prince Edward Island remain. Neither needs Labrador power or wants it.

That’s why Dunderdale started talking about new mines in western Labrador. Until now, all of the electricity from Muskrat Falls was supposed to go to the island first. Outgoing Premier Danny Williams said so. He said that Labrador must wait for power until the next dam is built at Gull Island. That’s the plan Nalcor submitted for environmental assessment.

So, what did Dunderdale mean? Was she just saying that, sure, the mines will get Lower Churchill power, but as planned: only after the Gull Island rapids are dammed? Or has she unilaterally changed the Muskrat blueprints? Will the 339.6 megawatts (40 per cent of the projected output) reserved for the U.S. now go to Lab West instead? The mining companies operating on both sides of the border would certainly welcome the attention. They expect the new Parti Québécois government to impose new taxes and cut their Plan Nord subsidies, so they’ll be happy to latch onto Nalcor, Newfoundland’s most generous corporate welfare scheme.

If this goes ahead, plans for transmission lines will have to be changed, too. Nalcor will need an extra one from Churchill Falls to western Labrador, for sure, and maybe it won’t need one to Nova Scotia.

When Williams proclaimed Lower Churchill success with great fanfare the day before he quit his job, all his triumph was based on the sketchy Emera deal. Now his successor must choose between leaving that lynchpin in place just to send free electricity out of the province, or pull it out and watch Nalcor’s rickety plans crash to the ground.

It’s time to bring this latest version of the Lower Churchill boondoggle to an end, before any more damage is caused and any more money is wasted.

That would be the prudent thing to do.


Michael Johansen is a writer

living in Labrador.



Organizations: Hydro-Québec TransEnergie, Lab West, Parti Québécois

Geographic location: Muskrat Falls, Labrador, Grand River United States Nova Scotia Gull Island New England Ontario New Brunswick Prince Edward Island

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Recent comments

  • Winston Adams
    October 17, 2012 - 08:11

    Thank you John in Whitbourne for your reply. You see to confuse me with M. E. Adams, who used the figure 30 cents for power cost , but I beleive Dave Vardy uses a similar number. Good to see Your "decision to use efficient heating, but is seems only an intention until acted upon. What type have you chosen? Some are much more cost effective than others. Our Premier's Energy Efficiency Plan and Nalcor say they wish to put us on the path of being a Culture of Conservation. Your decision seems to be a positive one . I assume you appreciate the fact that a serious effort in this direction by the province reduces the demand for electricity and reduces oil use at Holyrood and can make MF unnecessary for a long time. Is this concept qualify for the lunatic fringe , in your opinion?

  • It will be the Hydro Consumers of NL who will shoulder the risk of Muskrat Falls, not Williams.
    October 16, 2012 - 11:42

    To: JOHN IN WHITBOURNE WH0 SAID "You people honestly believe that Williams would risk his wealth and retirement just to make a few quick bucks on the sly". John in Whitbourne, it isn't Williams who will be on the line for risk in the Muskrat Falls scenario, it will be the hydro rate payers of Newfoundland and Labrador. The only risk Williams faces is if the Muskrat Falls Project does not meet the mettle test and will be scrapped, then he will have to face the same fate as Joey Smallwood did, he will have to endure the the embarrassment of the blame for costing the province of Newfoundland and Labrador Millions if not more than a Billion dollars for bringing forth this deal with no customers in sight who are willing to pay what it costs to produce the energy in bad economic times, when not only the province of Newfoundland and Labrador needs less energy, but the World we deal daily with in trade . I suspect though that a few of the Would-be developers of the Muskrat Falls Project already have made quite a lovely sum of money from the work already forced ahead without the electorate of Newfoundland and Labrador approving it.

    • John in Whitbourne
      October 16, 2012 - 15:45

      The risk I referred to was the risk of criminal prosecution if Mr Williams behaved as some posters have implied. I'm pretty sure nobody else of Williams ability will ever stand for Premier after the crap that has been thrown at him. Smallwood cost the people of NL on the order of $100 Billion for his brilliant management of the CFA. The exact figure depends on the year of measurement. HQ are making about $2 Billion a year now and the deal runs 70 years. Even if you take your shoes off for the calculations, you can't make this current project cost that much. That stands even if somebody perfects cold fusion in a beer can, the day MF goes into service.

  • John in Whitbourne
    October 15, 2012 - 21:11

    I wish I had the imagination you people have shown here. MF power will cost 30 cents/kWh to produce? I guess you pulled those numbers out of your derriere because there doesn't seem to be another source for them. Oh, one third of that cost is in secret deals with the 'Illuminati' and I suppose you only heard about it by eavesdropping in a George St men's room. The magical 'Mining companies' controlled by the evil Danny and his henchmen (henchpersons?) are behind it all but nobody ever quotes the scale of demand and compares it to proposed capacity of the dams. NALCOR is a 'running dog lackey of the capitalist classes', straight from the front page of 'The Worker' or 'The Marxist-Leninist Daily' so fondly remembered for littering campuses a generation ago. I referred to MF opponents as a 'permanent lunatic fringe' eight months ago and the term seems even more suitable now than it did then. The only thing left out of this discussion so far is the economic 'miracle' of using NL offshore natural gas to power a new Holyrood GS. [Economic feasibility be damned! or stealing from Patrick Stewart: "If it's nae Newf it's crap!"]. As if building all those wells and pipelines under the North Atlantic wouldn't cost ten times as much as just buying gas from a supplier on the Eastern Seaboard while the price is at an all-time low. The phoney cries of CORRUPTION don't quite ring true here in NL because Williams ran his own Deputy Premier through with a rapier when he learned about the fake expenses. The man made his money openly by being a better judge of value than self-made gazillionaire Ted Rogers. You people honestly believe that Williams would risk his wealth and retirement just to make a few quick bucks on the sly.

    • Winston Adams
      October 16, 2012 - 11:34

      John, are you John Smith ? As anyone anti MF is a lunitic. Can you comment on your view of energy efficiency? See " bringing efficiency to the energy equation' which is a lettter online oct 9, and the Telegram oct 7

    • John in Whitbourne
      October 16, 2012 - 16:06

      I am unsure what you mean by my view of Energy Efficiency. My opinions really have no bearing on the (three) laws of Thermodynamics. My personal intention is to switch from the use of resistance heating to use of a heat pump. That is not an opinion, it is a decision. The following is quoted directly from Wikipedia: "Lunatic fringe is a term used to characterize members of a usually political or social movement espousing extreme, eccentric, or fanatical views". ELI contributed disparaging remarks about DW that are eccentric. THE MEDIA yada yada ... espouses an extreme view of the press. EDFROMRED, DAVID and Wm DANIELS all espouse eccentric views. You, on the other hand just make up extreme costs such as 30cents/kWh. That is complete nonsense with no basis in reality. That could be fanatical or it could be innumeracy. My first name is John. You get 50% for your guess.

  • Eli
    October 15, 2012 - 14:56

    Michael, you sure hit a sore spot with this column. Bottom line here is Danny's signing of the MOU and then getting the hell out of the way. His "God guard thee Newfoundland" choke-up at his Confederation Building departure circus just grabbed me right in the ghoulies. I wondered even then why he didn't have a part time job with Rising Tide Theatre. He's waiting now in the wings like a vulture.

    October 14, 2012 - 08:19

    To: EDFROMRED: Yes indeed the Provincial Government and the Federal Government have bought the Media ever since the inception of Government. The Media just switch allegiance to whatever government is in power after the election. The Governments have the Media under their thumbs and the Media allow it to happen, after all there are government contracts to go after. Then combine that with the Dictatorial stance the Governments rule with , it makes for pure CORRUPTION and the electorate in the province of Newfoundland and Labrador has gotten shafted every time. We have not being able to rise from the dust of corruption, despite our strategic geographic location and great endowment of natural resources. The only ones who get ahead in our province are the politicians, who choose to be corrupt, and their business acquaintances. These people will shaft the electorate everytime, as we see what is about to happen with the Muskrat Falls Contract where we will be charged with the highest electricity cost in the whole of Canada if not the World. My child pays less than half of what we pay per kilo watt hour for electricity in Northern British Columbia. No other electorate would allow such corrupton to happen and, we, the electorate have to take a stand and the Media need to be supporting us.

    • John in Whitbourne
      October 15, 2012 - 21:45

      According to the Europe's Energy portal, residential energy users in Germany pay 0.2541 Euro's per kWh. That is about $0.3293 USD. They have the strongest economy in Europe. The Germans have announced their intentions to switch from nuclear to 'renewable' sources in the long term future. That will not lower their costs.

  • EDfromRED
    October 13, 2012 - 15:11

    Be careful Michael, don't you know the media in this province are bought and paid for by the Provincial government. At least thats what the evidence shows. Why would the Telegram, VOCM, CBC, NTV have multiple reporters covering the propaganda circus of this weekends PC Party Dog and Pony show, and not have one single reporter at the Muskrat Falls site covering this boondoggle. Of course, just because history shows Governments and Big Business have always used the media as a eager mouthpiece for there agendas, I'm sure that's not the case here...Yah Right!

  • Maurice E. Adams
    October 13, 2012 - 10:48

    Absolutely. All spending on Muskrat Falls should be stopped now........ Muskrat Falls power (which costs 30+ cents/KWh) can only be sold in the Maritimes or to the mining companies at between 3-6 cents/KWh. MF can only be paid for by forcing island ratepayers (by way of Nalcor's 'take or pay' contract) to pay 20 cents/KWh increasing and locked-in at 2% annually for the next 50+ years). And even then, that 20 cents/KWh is misleading in that there is another 10 cents/KWh that is hidden and back-loaded on our children and grand-children (even after near-zero cost Upper Churchill power becomes avaiable (but they will not be able to access due to the MF locked-in contract).

  • David
    October 13, 2012 - 10:17

    Nalcor was created to be a covert, unaccountable lapdog of the government of Newfoundland. Senior management does what itas told in return for very lucrative, resume-padding and professionally interesting work experience, while the government can pretend that it has important and valueable initiatives to supprt their re-election. The truth is that this government is now old, tired, rudderless and will slowly bankrupt this province, with Nalcor's unconscionable assistance. Blank cheques tend to do that....

  • William Daniels
    October 13, 2012 - 08:25

    Agreed. STOP the spending.