Muskrat Falls: generating more than just power

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There has been some commentary in the media this week, and I’d like to take an opportunity to provide some information and context from Nalcor Energy’s perspective.

Muskrat Falls is being developed for the benefit of Newfoundland and Labrador. Our detailed analysis of this project clearly shows that there is a demand for the power in our province, and Muskrat Falls is the lowest-cost option to meet our growing demand.

Initially, there will be power from the project that is surplus to our provincial needs. In accordance with the vision laid out in the province’s Energy Plan, Nalcor will maximize the value of surplus energy in the export markets, as long as it provides an appropriate economic return to the people of the Newfoundland and Labrador.

There are open markets for clean, renewable power in eastern North America which Newfoundland and Labrador will continue to access.

The Nova Scotia UARB’s decision earlier this week confirms that Nova Scotia is one of those markets. Other market participants have also expressed an interest in accessing our clean, renewable power. We are open for business.

The Maritime Link provides an opportunity for our province to sell power surplus to our needs at prices that provide an appropriate return for Newfoundland and Labrador. We view Nova Scotia as one of a number of potential markets for our surplus energy.

We have confidence in our analysis and planning on the Muskrat Falls project.

Our legal reviews and extensive engineering work support the development of the project. We will comply with the Water Management Agreement approved by the Newfoundland and Labrador Board of Commissioners of Public Utilities and related legislation while ensuring contractual obligations are met.

Today, hundreds of Newfoundlanders and Labradorians are benefitting from employment and business opportunities on the Muskrat Falls project.

This important project will have significant long-term benefits for customers, our environment and the economic future of our province. I encourage you to learn more about the development of the Muskrat Falls project at: www.muskratfalls.nalcorenergy.com.

Ed Martin,

President & CEO, Nalcor Energy

Organizations: Newfoundland and Labrador Board of Commissioners, Public Utilities

Geographic location: Newfoundland and Labrador, Nova Scotia, North America

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Recent comments

  • FINTIP
    July 29, 2013 - 13:25

    Finally - a sign Premier Dunderdale might be seeing the light. The Halifax Herald is reporting she has refused to capitulate to the UARB demands. And it quotes Nova Scotia's Premier Darrell Dexter as saying "he backs Newfoundland’s refusal to sign a written guarantee to sell market-rate hydroelectricity to the province." If true, it could signal she is mulling a pull back from the brink. In theory, Dexter could legislate the UARB into submission, but it would never make it through his minority led House. No doubt Martin and Dunderdale are reviewing their options. One option undoubtedly is to scale back the project by dropping the Maritime Link and possibly even the Labrador-Island link. It could signal the development of a smaller block of power that could be generated based on the run of the river combined with a more limited downstream penstock. Most, if not all, of this power could be deployed in Labrador to meet the expected industrial and domestic demand there. Ironically enough, Quebec might even buy any surplus until local demand has firmed. It would still be expensive power but NALCOR's industrial customers can better afford it than can homeowners on the Island. Equally certain is that Dunderdale has been pushing the PMO for assurances that a modified loan guarantee would be available from the feds - perhaps even support for converting Holyrood to natural gas. For his part Harper should want to diffuse another ugly legal and political battle between Quebec and Newfoundland that would place him in the middle. It might even allow Ottawa to extract terms from Quebec that would see NS access comparably priced power from HQ. A downscaled power project - as opposed to an abandoned project or a failed project - would save Dunderdale from a fate worse than Smallwood's. More importantly, it would save the Newfoundland ratepayer and taxpayer from a crushing utility and tax burden for decades to come. Of course the dream of breaking Quebec's lock on power distribution in Eastern Canada would be deferred to another time. There is always 2041. But as Konrad Yakabuski opined in Saturday's Globe and Mail 'revenge is a bad business plan'.

  • Tony Rockel
    July 29, 2013 - 11:51

    "...detailed analysis...blah blah blah..increasing demand for power in this province... blah blah blah..lowest cost option...blah blah blah...maximize the value...blah blah blah...appropriate economic return...blah blah blah...clean renewable power...blah blah blah...open for business...blah blah blah...confidence in our analysis... blah blah blah...extensive engineering work..blah blah blah...significant long-term benefits...blah blah blah... economic future...blah blah BLAH." Is that the best you can do, Ed? Not one of your platitudes is worth the paper it's printed on.

  • Maurice E. Adams
    July 29, 2013 - 11:49

    HERE is part of Nalcor's "detail analysis":-------- In a June 29 letter to The Telegram, "Clearing up some misconceptions about Muskrat Falls", Rob Henderson, vice-president of Newfoundland and Labrador Hydro, wrote that electricity "consumption has been steadily increasing, except for the 2005 through 2009 period, which was impacted by the declining electricity consumption for provincial pulp and paper production". ...............However, Nalcor's own 2011 info-graphic (Demand page, www.vision2041.com Total System Load refers) shows that the island's actual "Total System Load" went down not only during the 2005 to 2009 period but a total of 10 times over the 16 year period from 1994 to 2010 (additional years 1994, 1996, 1998, 2001, and 2004)............ Over the entire 18 year period (1994 to 2012), electricity consumption went down more often than it went up (10 of the 18 years), so that by 2012 the island's electricity consumption was still below 1993 levels.................. Furthermore, when Mr. Henderson wrote that "In addition, it is important to note that peak demand on the island, or highest amount of electricity required at a given time, is also rising", it should also be noted that in 2010 NL Hydro's forecast peak demand for year 2012 (just two years into the future) was more than five times higher than year 2012's actual increase and that actual peak demand in 2012 was still down considerably from the island's peak demand 10 years earlier (1,550 megawatts, down from 1,592 megawatts in 2002)................ Accordingly, when the facts show that over the longer term (the 18 year period from 1994 to 2012) consumption went down (not up) 56 per cent of the time and that by 2012 electricity consumption was still below 1993 levels, what does that say about the credibility of Nalcor's Muskrat Falls' business case when NL Hydro grasps at a marginal increase in demand over a two or three year period as a basis for its claim that "in fact (electricity) consumption has been steadily increasing"?................. A credible position?...................... You be the judge.

  • Just Sayin
    July 29, 2013 - 09:30

    Ed says "our detailed analysis of this project shows there is a demand for the power in the province".........but wait 1. the analysis for demand was never detailed..... it was very poorly done. Manitoba Hydro pointed out that for the demand analysis we (Nalcor and Nfld Power) use does not comply with the best practices of other unitities to verify energy consumptions called "end-use analysis". This way they can ignore and deny the high effecienicies of alternative electric heating systems. In other words , they can cook the books as to future electricity demand. Recent demand results shows their forecast is way off base and Holyrood oil use and energy production is way down. Ten years ago Holyrood produced 30 percent of our energy, this past year it was 10.5 percent. And new housing codes are kicking in which reduce energy by another 27 percent. And old and new houses with efficient heating systems reduces electricity in winter by 50 percent. Who is ed trying to fool by saying their analysis was "detailed"? And for him to say it "shows there is a demand for the power"..... the question is not is there a demand, but is there sufficient demand to justify the huge cost of this project. They forecast a demand of about 1 percent per year increase on the island. If it is only half of that, then where's the economic case? Sorry Ed, you guys never did your homework on this power demand question. And you continue to hide from this assuming the public is too little informed to know any better. You skirt around the issues. Details...... Nalcor avoids discussing details and just puts up smoke screens. Details, and detailed analysis involves facts and truth.... and you guys can't handle the truth. You bury your heads in the sand as to anything that negatively affects this high cost Muskrat scheme. Nalcor is getting to be one big Newfie joke.... and you have little credibility left.

  • Jon Smith
    July 29, 2013 - 08:18

    $5 billion being spent to go around Quebec. If that can be done for $1billion through Quebec, wouldn't that be MUCH LEASTER COST POWER. Why would we need a bill passed in the house to cover up the details? Why would we need legislation to have Nalcor operate outside PUB scrutiny? Why would we need legislation to prevent the import of cheap power from the mainland? Why would we need to risk the cost of a NAFTA challenge about this restriction? Is it this kind of logic what makes Nalcor see great value in multi million dollar dry holes? Yes Muskrat is more than just power, it is debt in perpetuity for the ratepayer/taxpayer.

  • Cashin Delaney
    July 29, 2013 - 01:41

    No new information. No current context. Cliched, deflective language and overall, a bland and passively dismissive letter. "We have confidence in our analysis and planning on the Muskrat Falls project." The ability, or motivation, to induce confidence in the public by speaking directly to the issues raised by dissidents is severely lacking, and disappointingly similar to our government.

  • johnny smoke
    July 28, 2013 - 12:08

    Just wondering Ed when you walk by the grave yard do you whistle? You know and I know that each and every volt/ampere of Muskrat falls will have to be sold to H.Q. for distribution until 2041. By that time both you and I will be in our graves, but the stink of this shoddy deal will live on in Infamy

  • NWR
    July 28, 2013 - 09:00

    This project will benefit the island but will negatively affect the environment in central Labrador. It is time for Labrador to become a separate entity as the government will not protect our interests.

  • derrick
    July 28, 2013 - 08:57

    Ed any facts or figures or just more flag waving. any news: - northern slope cost increase ? - what have we built to-date for 2 billion ? - how much more power will we sell at a lose ? - how much will we pay hydro-que for water ?

  • Maurice E. Adams
    July 28, 2013 - 08:10

    Isn't it odd that Nova Scotia, a province that has virtually none of our 'energy warehouse' potential, must have 20% of FREE Muskrat Falls power (and 40% more at between 5 and 9 cents per KWh) in order for their UARB to conclude that Muskrat Falls will be their "least cost power". ..........Yet Nalcor's Muskrat Falls project will force NL ratepayers to pay about 3 times what Nova Scotia ratepayers will pay and yet Nalcor still claims that Muskrat Falls is NL's least cost power option. ...... How is that possible ---- a province that is an energy warehouse can provide 3 times cheaper power to NS than to its own citizens? .... ANSWER --- we are paying very high prices for ALL of the MF power so that Nalcor can get revenue (any revenue) from the FIRESALE prices OF WHAT WE DO NOT USE (AND DON'T NEED) to Nova Scotia. Nalcor gets some crumbs as "revenue", and we pay a very high price for Nalcor's revenue stream.

  • Special ED
    July 27, 2013 - 19:37

    Stop wasting our money ed! become a politician instead of a silent investor...with our money. No One believes you anymore! and get a new speech writer while your at it!

  • EDfromRED
    July 27, 2013 - 12:41

    This deal has more exposed cracks than a plumbers convention. The PC Muskrat Falls cheerleaders and their big business masters must have their escape routes from the province planned well in advance, because they show no concerns over the common peoples response to being crippled financially in the future by this sketchy looking deal. Centuries ago it was Vikings who would pillage and flee, now it's our elected officials and the puppet masters who pull their strings. It's a pity the PC's did not have the same unstoppable fervor when it came to exploring the reasons why Search and Rescue failed Burton Winters.

  • Cyril Rogers
    July 27, 2013 - 10:36

    Mr. Martin, you are throwing around the same trite statements and rationale for this project that was trotted out by one Danny Williams in 2009. Reality, though, is far more sobering than your glib assurances that it will all be okay. i will leave the in-depth analysis of your statements to those more qualified but, as your former boss once said,..."You can drive a Mack truck through".....your arguments and rationale. It is disconcerting and scary for us, as a province, that you continue to espouse the merits of this project in the face of all kinds of evidence to the contrary .....along with other major obstacles yet unresolved.

  • Ben Turpin
    July 27, 2013 - 09:31

    There is no information. A bubble-wrapped context. The 2041 group, Brad Cabana, Tom Adams, even Con O'Brien have tried to brainwash me into believing that this whole project will bleed money in lawsuits, cost overruns and other such spookiness. I want to believe in Muskrat Falls. Please help. Somebody add info and context to this postcard from Hydro Place.

  • Ken Collis
    July 27, 2013 - 07:40

    It sounds like Mr. Martin has already decided to give our excess power to N.S. Of course everyone knew this would happen. Newfoundlanders mean nothing to him. He'll sink us all if that is what it takes to keep this project going. He says now the plan was always to sell remaining power to N.S. What a crock. Now they will get 60% of the power for 20% of the investment. I'll be long in the grave before ANY SINGLE common Newfoundlander not working for Nalcor ever sees ANY benefit from this project. Of course 'Long Term' is a relative phrase so he isn't really fibbing. BTW Ed, what about someone from one of your web sites finally answering my question about the project? Remember, the ones you requested from everyone two years ago, guarenteeing an answer in a reasonable time. Oh wait, 'reasonable time' is a relative phrase as well.

  • EDfromRED
    July 27, 2013 - 07:19

    What a joke. Randy Simms has a much more honest assessment of the current Muskrat Fall's project. http://www.thetelegram.com/Opinion/Columnists/2013-07-27/article-3329234/A-most-excellent-deal/1 Muskrat Falls is a make-work project for Nalcor and rich PC pals, so they can get richer off the rest of us.

  • jm
    July 27, 2013 - 06:38

    With all due respect to Mr. Martin this is the same line he has used since November 2010. Since then his project has not passed any test, or independant review without serious concerns raised. The UARB decision is the latest but also the most serious of these. The paradox of how we have extra power to sell, but why we are unwilling to provide a long term committment to sell it, should be better explained. It is not that we cant sell power to Nova Scotia at market rates because we need to be able to sell it to mining companies at market rates. The issue is that market rates will not pay for the project. We need to take this back to basics and forget the rheteric. What are the numbers? Lets have a serious, open and transparent debate. Right now I am very worried by the lack of a clear plan. This letter does not reassure me. It is more of the same.