Justifying Muskrat Falls

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Remember this? “Muskrat Falls is the least-cost option,” or, the other one, “We need the power.”  

One of my favourites is, the cost of electricity is going to go up anyway. In fact, in the long term, it will be $2 billion cheaper with Muskrat Falls.  

To prove the point, Newfoundland and Labrador Hydro raised its rates by 13 per cent for 2012 and 2013 using the pretext that oil prices would be as high as $124 a barrel. After the government sanctioned the project, there was no need to fudge the numbers, so we should all rejoice that on July 1 we will see a decrease in our  electricity bill.

Because of the way that Nalcor has structured the financing of the project (the only reference I could find was on page 79 of the Public Utilities Board report), we, the ratepayers, will never see another decrease in our rates for the next 50 years.

So much for least-cost. Do we need the power?

Since the introduction of the curly light bulbs, the LED and LCD televisions and vast improvements in electric heat, consumption has gone down.

Hydro knows by how much, so why hasn’t any of its data been used to prove Nalcor’s case for the need of Muskrat Falls?

Gerry Goodman

St. John's


Organizations: Newfoundland and Labrador Hydro, Public Utilities Board

Geographic location: Muskrat Falls, St. John's

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Recent comments

  • Maggy Carter
    June 27, 2013 - 21:02

    There is little prospect of turning Muskrat around at this stage. Nova Scotia's UARB could deliver a flat 'no' on Emera's application or at least place such onerous conditions on it that Emera backs away. That would leave Dunderdale with a choice : (1) raise the stakes by injecting another $2 Billion; (2) forego the link and the federal guarantee, and discount power sales even further to industry in Labrador; or, (3) use Nova Scotia's retreat as grounds for putting Muskrat back on the shelf - not because it makes terrible economic sense (she already knows that) but as a last ditch attempt to save her government from electoral defeat. Dunderdale will go with the first option because her allegiance is to vested business interests - not the ordinary taxpayer - and because her past behaviour demonstrates a propensity for cutting off her nose to spite her face. So let's forget Ms. Dunderdale for a moment - hers is a lost cause - and turn to the opposition. Can there be any doubt that either the Liberals or NDP will form the next government? The NDP leadership is not up in the air. Michaels is well respected – twice as popular as Dunderdale, neck and neck with Ball. Party-wise, the Liberals and NDP claim equal public support with the caveat that the Liberals are showing more upward momentum than the NDP. What does this mean? Well it might mean that, while the electorate likes Michaels, it has concerns we could wind up with a spendthrift government that could quickly bankrupt the province. Of the opposition leaders, Ball has been the most vocal opponent of Muskrat. That probably didn't count for much until Dunderdale unveiled her last budget. The public, which until then had tenatively supported Muskrat, suddenly grasped the connection between this massive government undertaking and the prospect of a bleak economic future in this province. Since then, they have been abandoning Dunderdale - and Muskrat - in droves. What all this means politically is that the leadership of the Liberal party, and the premiership of the province, are both Dwight Ball's to lose. If Cathy Bennett goes for the leadership, she will either lose because of her past association with NALCOR and unqualified support for Muskrat, or she will win because she has more money - and perhaps even more charisma - than Ball. If she loses and Ball wins, then the Liberals will likely form the next government. If she wins, the Liberals are almost certain to lose that election as the stench from Muskrat grows even stronger and she – like Dunderdale – is held accountable. In that scenario Michaels becomes the next premier of Newfoundland and Labrador. As someone who more often than not has voted PC, I will be voting Liberal as long as Ball (or someone else untainted by Muskrat) is leader. If Ms. Bennett – for whom I otherwise have considerable respect – becomes Liberal leader, I will hold my nose and vote NDP.

    • winded
      June 28, 2013 - 12:25

      Too long. I didn't bother reading it. No many people read comments that are longer than the letter.

  • Cyril Rogers
    June 27, 2013 - 16:40

    Justifying Muskrat Falls is like SNC Lavalin trying to make us believe that bribes are a necessary component of good business practice...but, I forgot, they do think that...and guess who is the lead contractor for Muskrat Falls? The government of Kathy Dunderdale....... and the lead architect in announcing this project, former Premier Danny Williams......... will have a lot to answer for when this entire fiasco comes unraveled and we, the taxpayers(ratepayers), are left holding the bag for all the wasted billions. Will we be able to indict them for gross damage to our economy? Will we be able to prosecute them for negligence and malfeasance? Will we hold a Commission of Inquiry to determine how basic democracy was usurped by Williams and his clones? It will be small consolation, as the real damage will have been done....but there are a lot of decisions that they will have to answer for..........even if they are annihilated at the ballot box in 2015.

  • Alec C
    June 27, 2013 - 12:41

    16.4 cent STARTING power rate for residential customers (+50% price from current 11 cent kWh) +2% inflation for FIFTY years - no long term PPAs - no private financing in place - $200 oil - not taking into account 23030 GWh of UC power available in 2041 - absurd energy demand forecasts 12,000 GWh by 2067. 12% rate of return from Nalcor a enshrined Crown-Monopoly due to bills 60 and 61. Emera still haven't signed on - ongoing court cases... Residential demand can't possibly justify building MF yet residential ratepayers will be forced to subsidize NL industry and NS rates!? Lose 1-2 billion now in cancelling MF in it's tracks to save 3+ billion long term might be a bitter pill forced upon NL by the unpopular NLPCs.

    • a business man
      June 28, 2013 - 06:24

      Personally, I am okay that NL ratepayers will be subsidizing NS rates. I have many more businesses in NS, so I am okay with this. Frankly, NS is more important to me than in NL. That said, I honestly do not think it is fair for NL ratepayers to subsidize NS energy, but I will not complain because it is good for me.

  • Missed the boat
    June 27, 2013 - 10:08

    It's over. The decision has been made (right or wrong), construction has started and now the next Liberal leader has announced that she supports the project. That smacking sound is your head hitting the brick wall. All that's left to do is prepare for high rates.

    • Corporate Psycho
      June 27, 2013 - 12:37

      Sadly u may be right.

  • Wondering
    June 27, 2013 - 09:52

    Gerry, this is the central issue, to prove the case for more power. 1. You are correct, improvements in electric heat is driving power consumption down. The improved units are all electric efficient heatpump systems that use about 1/3 the energy. 2. New housing construction codes reduce electric loads for heat by another 27 percent. 3. Efficient lights and fridges by themselves reduce energy use, but then offset this saving unto the baseboard heaters, thereby losing almost all of the advantage. But when used in conjunction with efficient heatpumps, it maintains most of these savings. 4. All of those combined will level reduce the forecast demand and oil use at Holyrood. Warmer winters due to climate change is also helping reduce winter heat load. 5. Nfld Power has been ordered by the PUB to report on the benefits of these efficients heating systems, but likey will try to avoid promotion of them for fear of energy sale losses. 6. Fortis is British Columbia is promoting these with rebates to help customers. The home province of Fortis, here in Nfld, must think our citizens are not worthy of such assistance. Go figure. An analysis of future power consumption required end-use analysis, which proves which products are most useful. Most power companies do this and it is considered to be "best practises" Our power companies refuses to do end-use analysis. Go figure. Manitoba Hydro noted this deficiency in their report. 7. 96 percent of Nflders seek energy efficiencies to reduce their power bills. .001 percent opposed Nfld power rate increase via written requests. So Nfld power assumes their customers are all happy. So they continue to avoid assisting customers with the best options to save them money on power bills. 8. There is no organized effort to hold the power companies accountable to deficient forecasting methods. So we will all pay for their errors and misrepresentation.

  • Maurice E. Adams
    June 27, 2013 - 08:51

    Over the last 22 years energy use has been flat. Over the last 8 years it is down on average more than 2% per year (go to www.vision2041.com and link to my Written Submission to the PUB to see page 8, Figure 1). Also view the Demand and Holyrood pages on the Vision2041 website.

  • Scott Free
    June 27, 2013 - 08:43

    Didn't you get the memo? Little Man Dan issued a decree that the Muskrat project must happen; period. And, the Kool-Aid slurpers gulped down the Tory elixir; changed legislation and pushed it through. Why are you asking questions?