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So, who should we believe? Is it Natural Resources Minister Jerome Kennedy, or is in Nalcor Energy, in its statements to the province’s Public Utilities Board?

First, a little history: when the Muskrat Falls project first appeared on the radar, the project’s goals were plainly outlined: the claim was that the project was needed to stabilize power prices in this province by getting away from oil-power generation at Holyrood (albeit stabilizing them at a considerable increase from where we are now), and to swap power to Nova Scotian utility Emera, in exchange for Emera building an undersea cable to Nova Scotia, and therefore, allowing us to reach markets beyond this province in a new way.

Nowhere in that first description did the question of the needs of mining companies in Labrador come into play.

In fact, it wasn’t until the spring session of the legislature this year that the needs of the miners started to surface.

In late May, Kennedy began talking about supplying power to mining firms.

“We have indicated clearly that if companies are interested in purchasing power, that we will do our best to get it to them. I have also indicated clearly, Mr. Speaker, to the member of the Opposition, that Muskrat Falls power holds the key to providing mining companies in Labrador with the power they need and satisfying the needs of the island.” he said. “What we are doing and what we have indicated is that there will be power available with Muskrat Falls, Mr. Speaker, if it is sanctioned and developed. Mr. Speaker, there are no firm contracts signed. I have met with all these companies. There is only one company that said we are willing to buy power. We are in discussions, Mr. Speaker, with these companies and if they want to sign firm contracts, then we will guarantee the power if Muskrat Falls is sanctioned, Mr. Speaker. …  We are not going to develop Muskrat Falls simply to supply power to mining companies, Mr. Speaker. There has to be the replacement of Holyrood. When all of that is done, Mr. Speaker, then what we will look at is the provision of power to these companies.”

Since then, mining has become key to the project: here’s Kennedy from this past weekend on the CBC: “Muskrat Falls is a domestic project. It’s to supply power that we need on the island portion of the province and then for mining projects in Labrador.”

Fair enough. But shortly before Kennedy started talking up the mining firms, the PUB asked Nalcor directly about whether mining company needs were involved in planning for Muskrat Falls.

Nalcor’s response? “Nalcor and Hydro have been monitoring all potential projects to increase load in Labrador as part of their normal system planning and load forecasting processes. However no development with increased interconnected electricity requirements in Labrador has advanced to a project sanction stage. As a result, potential increased requirements for electricity, including those indicated by Rio Tinto and other developers in Labrador, are not sufficiently advanced in order to justify commitments to invest in generation capacity, transmission infrastructure or to be included in official utility load forecasts.”

So, which is it? Are mining projects a real, tangible part of the Muskrat Falls planning process or not?

Both positions can’t be right.

Organizations: Public Utilities Board, CBC, Rio Tinto

Geographic location: Labrador, Nova Scotian, Nova Scotia

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Recent comments

  • Sheldon Walsh
    August 08, 2012 - 18:08

    There is no such company as "NL Power"

  • Cold Future
    August 08, 2012 - 12:16

    The Holyrood red herring will never fly. It is simply bandied about to play on the environmentally misled (Let's get rid of that dirty dirty oil). Holyrood can and should be cleaned up and will provide a continuing supply of clean cheap, reliable energy well into the future. Why develop a project for sale to mainland interests at rates which require subsidy by captive NL ratepayers? Its got to beat the heck out of any clear thinker. A lot of crumbling roads and infrastructure, health care facilities and like projects could be carried out with the estimated $ 6 billion excess cost required to build Muskrat. It is too expensive even if we did need the power. It is damned difficult to see why this is still being considered. The longer we continue the deeper and we dig the bigger fools we are seen to be. Lets wipe the smiles off the faces of our mainland freinds and end this sooner rather than later. KILL Muskrat now.

    • Eli
      August 09, 2012 - 10:52

      Agree with everything you say but the smiles on Nova Scotia players are the equivalent of the smirks on the Newfoundland/Labrador puppets Dunderhead and Kennedy. Outside the box Danning is killing himself laughing.

  • Yyyyawnn
    August 08, 2012 - 09:39

    Same characters, same play. Nothing new here.

  • Maurice E. Adams
    August 08, 2012 - 08:29

    HERE JOHN, is an excerpt a letter date April 27, 2011 from the NEWFOUNDLAND AND LABRADOR BOARD OF COMMISSIONERS OF PUBLIC UTILITIES "The Board has received notification that: (1) The activities of Newfoundland and Labrador Hydro associated with generation and related facilities at Muskrat Falls, Gull Island and Churchill Falls have been exempted from the application of the Public Utilities Act by the Lieutenant-Governor in Council under section 4.1 of the Public Utilities Act; and (2) Nalcor Energy has been exempted from the application of the Public Utilities Act and sections 3(a) and 3(b)(iii) of the Electrical Power Control Act, 1994 by the Lieutenant-Governor in Council under section 4.1 of the Public Utilities Act and section 5.2 of the Electrical Power Control Act, 1994. In light of these exemptions, the Board does not have jurisdiction with respect to any activities of Nalcor Energy and Newfoundland and Labrador Hydro related to the Muskrat Falls Power Development. Please contact me if you have any additional questions. Yours truly, Original signed by Maureen P. Greene, Q.C. Legal Counsel"

    • John Smith
      August 08, 2012 - 10:10

      Well, no surprise there...the PUB has nothing to do with generation, either at any of our sites here like Holyrood or anywhere else. When NL Power, the distributer for 90% of our power wants an increase they still have to go through the pub...

  • Maurice E. Adams
    August 08, 2012 - 07:47

    Excerpt from my website ( www.vision2041.com ) ...... "Nalcor's Muskrat Falls business model is uncannily similar to a cable company business model. Aspiring Liberal leader (Dean Macdonald) and former premier (Danny Williams) would both be very familiar with a cable company business model ........ that is, ratepayers on the island are effectively CAPTIVE to whatever rate is charged. If they want the service, ratepayers have no choice but to pay THE HIGHEST RATE THAT THE MARKET WILL BEAR ----- and in the case of Muskrat Falls ---- UNNECESSARILY SO. In some respects, the Muskrat Falls business model is even worse than that used by the cable companies. Muskrat Falls has been exempted from our Public Utilities Board regulations and therefore has been TOTALLY removed from any 'regulatory' oversight whatsoever. The question is ------ WHY?"

    • John Smith
      August 08, 2012 - 08:16

      Now now maurice...you know that the PUB will be involved in setting the price we pay for power. NL Power has to go through the PUB any time they ask for an increase, that will continue. The thing is the cost adjusment formula...the rate stableization formula, the amount we pay for oil will not exist anymore.

  • George S.
    August 08, 2012 - 07:38

    There will be no spot sales for Muskrat electricity IF the excess is owned by Emera. Emera's assets in Maine, New Brunswick and Nova Scotia will sell into the US Northeast when the opportunity arises and keep Muskrat electrons for domestic use in the Maritimes. That is how trading works. Trust me, Emera have a more sophisticated energy trading desk than Nalcor and will see the opportunity just like Nalcor. They also have assets and access to make the trades and can deliver in the 15 minutes required. Muskrat stinks. The various justifications are about as credible as running a fibre optic cable line throughout Newfoundland. Actually, many of the same players are involved. Crazy coincidence. Scratch, scratch.

    • John Smith
      August 08, 2012 - 08:13

      The block of power that Emera receives for the cable, and the block we will sell are two totally different blocks of power. Both represent about 20-25% of the total.

  • John Smith
    August 08, 2012 - 07:04

    Well, right from the start all those in government, and at Nalcor said that any and all power being sold on the spot market, the excess, could be recalled for industrial or residential use. So I consider mining in Labrador to be industrial use.The thing is if the world economy has another hiccupand the mines start laying off and shelving expansion plans, we will still need the power here on the island. So I think what Nalcor is saying is that the power will be available for mining, but is not the prime motivator for the project.

  • Maurice E. Adams
    August 08, 2012 - 06:53

    If the mining companies need power, why then did Nalcor not do its yearly load forecast in 2011? The PUB had to use old 2010 forecasts, and even though Nalcor has historically done such forecasts EVERY YEAR, and even though this uneconomic multi-billion dollar Muskrat dam/generation plant was in the works, if they really need power, don't you think NL Hydro would have done their usual 2011 load forecast and given that to the PUB last year to use? .......As I wrote on my website ( www.vision2041.com ) you can bet that Nalcor will come up with some new load forecast figures that show that these mining companies NOW, all of a sudden, need power to bolster its Decision Gate 3 numbers for the upcoming debate.

  • William Daniels
    August 08, 2012 - 06:40

    Danny wants his cheap power. Dam the rest.