Increased electrical bills? No big deal

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Will Muskrat Falls go over budget? You bet it will, but it won’t be the end of the world. Besides a select few minorities, we are better positioned than most think to endure a potential rate increase. The short-term pain of increased heating costs will pale in comparison to the long-term benefits provided by the development of Muskrat Falls. As long as water flows down the Churchill River, this province will have an asset that provides revenue for an eternity.

Critics of the project stress over the expected price increases that ratepayers will have to endure. Well, prices are going to go up no matter what and there’s nothing we can do about it. But wait! We actually do have a choice if Muskrat Falls is built. The government will have the power to dictate prices based on choices between supplying mining needs in Labrador, selling on the spot markets in the eastern seaboard or subsidizing ratepayers in the province. Ultimately these choices will levy its costs on taxpayers, but it will be our choice and ours alone.

Our ability to withstand rate increases has not been discussed at all. To be up front, I did not consider this either until I moved to England last year for school. Never in a million years would I have been concerned with their mild winters until I moved into a typical English house where their idea of insulation is the one-inch gap between the outside layer of bricks and the inside layer of bricks. With current electricity rates two to three times our province’s, wearing a T-shirt inside your house is a luxury few enjoy across the pond.

I have since realized our homes are superior when it comes to energy efficiency compared to those of our neighbours in Europe. We have the latest insulation, the newest heating systems, the best energy-saving windows and doors, and above all else we have much lower energy rates across the board. Yet, there seems to be no shortage of complaints of the plight that will occur if our prices increase. I don’t want to sound critical, I enjoy wearing shorts inside as much as anyone, but if prices go up, we will survive.

If people are seriously concerned with the potential hike of electricity rates you wouldn’t know it by looking at the housing market. Homes are getting bigger, families are getting smaller and fewer people are installing wood stoves. Everyone has talked about harnessing alternative energy options of wind, gas, or even small hydro facilities, but the most logical and sensible one of them all — wood — has barely been mentioned. This may seem silly at first, but who in the province doesn’t live within 20 minutes of a large wood supply?

Less than a decade ago, the province supported three paper mills. The supply of wood is unquestionable and easily accessed for those living outside the overpass. And for the increasing urban population of the Avalon, let’s not forget taxpayers subsidized the pellet plant on the Northern Peninsula. Yes, the initial investment may be steep for a pellet stove, but it’s an option never-theless.

If Muskrat Falls spirals out of control and electricity rates rise higher than expected, we will still not be in bad shape. The province will have a multi-billion-dollar asset that will generate millions in revenue annually. It may take longer to recover our costs but it will produce clean renewable energy forever. As for the ratepayer, we will simply have to adjust like the rest of the world, lower the temperature in our house, put on an extra sweater, or if things get real bad, return to heating our homes with wood — or maybe even pellets!  

Adam Vickers is a public policy master’s student at Central European University in

 Budapest, Hungary.

Organizations: English house, Central European University

Geographic location: Muskrat Falls, Churchill River, Labrador England Europe Northern Peninsula Hungary

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Recent comments

  • Karl Kautsky
    December 05, 2012 - 08:57

    LOL! "Don't worry about it". Not surprising coming from a lackey who was working in Danny Williams' Executive Council when Muskrat Falls was announced. Nice try though, at least you didn't resort to the usual talking points.

  • Pierre Neary
    December 04, 2012 - 14:31

    I wonder how many pensioners would agree with Mr. Vickers??

    • a business man
      December 05, 2012 - 00:21

      I am not sure how many pensioners will agree, but if their view is not the view of the majority, then who really gives a crap.

  • Darryl
    December 04, 2012 - 14:29

    Really. You actually believe the vast majority of us should wear sweaters in our houses to save on inflated electricity costs while a few prominent families in this province get even richer from the muskrat falls project. If people were indeed able to gather forewood as easy as you say the provincial government would cut out selling cutting permits forcing people to buy electricity.

  • Winston Adams
    December 04, 2012 - 14:26

    Our rates are about 50 ppercent more than Man, Que and BC who are mostly hydro. We are 85 percent hydro. Our rates are slightly lower than other Maritime provinces who have little hydro. Given our island hydro we should probably be lower than we are. MF will make double Man,,Que and BC. And as the maritime provinces will likey tap into the low cost gas for generation, it seems likely we will have higher rates than they will going forward Efficiency and wind and more island small hydro seems a lower cost way forward. |Efficiency has been avoided as a solution.It is interesting that the government is spending over 50 million per year on heating rebates, but little on efficiency to bring down heating costs. Keep in mind that effciency reduces power company profits. There are corporate interests in avoiding efficiency benefits. And private power company shareholders likewise prefer to see those profits maintained, even at the expence of houshold high power bills.

  • If hydro-electric energy rates continues to rise, who is going to be able to afford to heat their homes?
    December 04, 2012 - 13:28

    At 11.3 cents per kilowatt hour I do believe that Newfoundlanders and Labradorians have the higest household energy rates in the whole of Canada. If anyone has information to the contrary I would appreciate it if they please post the information on this site. Just about everyone I know has cut back drastically on their electricity consumption over the past 5 years. If hydroelectrcity continues to escalate, I don't know what we will do to keep ourselves warm during winter and the unfortunate thing is my family's annual income is just above the income of $35,000.00 that excludes us from getting in on the $250.00 rebate given out by the provincial government to assist families with their heating costs.

  • Winston Adams
    December 04, 2012 - 12:39

    As a public policy student you should look at the issue of DECOUPLING for power utilities. No one here seems to know about it. I learned about it last year. The USA is big on it now. It promotes energy efficiency and takes this away from the power companies who do nothing for the homeowner and misleads the public on significant energy savings. How far behind are we? i knew this was as least 15 years old, but learned just a few days ago this started in California 30 years ago. We have a lot of catch up to do. You would think the NDP would be all over this issue.!

  • NL'er Away
    December 04, 2012 - 12:11

    For someone studying at a graduate level, it is amazing how uninformed the author is. Mr. Vickers has chosen to narrowly focus on the "larger" new homes being built without seeing the thousands of smaller homes that the average person calls home. Mr. Vickers fails to even acknowledge the 63,000 plus households that currently receive a small home heating rebate due to the high current costs of home heating, let alone the increased costs. Mr. Vickers fails to comprehend that increased revenues to the public purse are not automatically passed onto tax payers in the form of reduced taxes and do not necessarily mean an increase in the standard of living of taxpayers, whereas increased energy costs means less money for every taxpayer. Perhaps Mr. Vickers could take more academic courses and spend some time chopping down the firewood that he so virtuously espouses before he stands tall on his soapbox and proclaims such an uninformed opinion.

  • Winston Adams
    December 04, 2012 - 10:21

    Efficiency is the WISE use of electricity. I grew up hearing the stories of old timers in the Depression years spending a day digging wood stumps out of a bog for fire wood. No forest in the Bishop's cove and Upper island Cove area.We are fortunate to have 85 percent of our energy from hydro resourece. I installed an electric efficient heating system in my 1000 sq ft cottage. Just completed a full year of heat analysis----- for heat it cost $243.00 for a full year. Temperature inside was a minimum of 21 C, 72F. We do not need to just survive. We can have comfort at reasonable cost, without the expensive MF. People and government must promote AWARENESS of efficiency, its cost and benefits.This is absolutely necessary for mid and low income people.

  • david
    December 04, 2012 - 10:11

    Learning public policy in Budapest, Hungary, eh Adam? Beautiflul city, but one of the lesser reported, completely bankrupt European nations that spent wildly on social entitlements under the EU construct and is now economically insolvent. But thanks for the credible advice. Much appreciated

  • Herb Morrison
    December 04, 2012 - 09:36

    Sorry Mr. Vickers, but I am with Reservation for one, within the context of this particular situation. Your statement that “ Besides a select few minorities, we are better positioned than most think to endure a potential rate increase,” demonstrates that you are out of touch with the fact that, we have senior citizens, one of those minority groups you refer to, who struggle at any given time to “make ends meet”on a fixed income. When Winter arrives, siignificant numbers of these seniors,who cannot afford to pay what it costs to rent and to heat their homes during the Winter months, are forced to spend their winter days seeking shelter at local shopping malls, where they can find warmth. Then you have people who live on Welefare who, even if they are fortunate to live in subsidized housing, still struggle to survive.You can add homeless persons to that list as well. Your post suggests that minority groups such as seniors, welefare recipients (always a target for abuse), and any others struggling to survive amid the oil industry driven prosperity enjoyed by the privileged few, most of whom already live lifestyles the average citizen can only dream of, should be written off as colateral damage, much like the innocent victims of war. Deprivation in the midst of prosperity is a reality within this province, and the gap between rich and poor appears to be widening. Even if the Musgrat Falls development results in lower costs for electricity, there is much work needed to insure that all Newfoundlanders and Labradorians have an opportunity to "share the wealth."

  • Ed Power
    December 04, 2012 - 09:02

    So, we'll reduce our greenhouse gas emmissions by building Muskrat Falls, but increase them by denuding the landscape of trees, and burning them to heat our homes. An interesting twist on the concept of "Carbon Offsets". (I can't help it, but the visual image of thousands of freezing people swarming across the island to level the forest(s) and drag the trees back to burn, reminds of the scene in The Lord of The Rings in which Sauron's Orc minions swarm across Middle Earth felling trees and dragging them back to dump into the furnaces belowground to fuel his weapons foundries.) Methinks Adam has a nice job in Government - or as a Hollywood scriptwriter - awaiting his return from overseas.

  • Reservation for one
    December 04, 2012 - 08:13

    Let me no when you get back from lunch adam! This is newfoundland not disneyland.