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