Court applications and water management

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Nalcor recently said: “We don’t see a relationship between this action (Hydro-Québec’s application filed in Québec Superior Court on 22 July 2013) and water management. It speaks to interpretation of the power contract.”

Hydro-Québec’s court application and water management at Muskrat Falls are directly related. Hydro-Québec’s application explicitly references Nalcor’s 2009 PUB application to impose a water management arrangement on CF(L)Co and Nalcor.

Hydro-Québec wants the Québec Superior Court to interpret its Churchill Falls power contract. The final outcome of that interpretation process is important, crucially so.

Section 3.1 of the Water Management Agreement prohibits its implementation from adversely affecting any provision in Hydro-Québec’s power contract. Judicial interpretation of that contract will determine what its provisions mean and, therefore, what the Water Management Agreement cannot adversely affect.

Hydro-Québec wants the Québec Superior Court to declare that under the renewed contract between CF(L)Co and Hydro-Québec (in force from 2016 to 2041):

1.  Hydro-Québec has the exclusive right to purchase all the available power and energy produced at the Churchill Falls Plant, with the exception of the power and energy related to the 225 megawatt Twinco block and the 300 MW recall block.

2.  Hydro-Québec’s rights under section 4.1.1, including the right of programming and planning power and energy, are in no way limited, circumscribed or restricted based on monthly purchase blocks subject to a ceiling established on the basis of the notion of “continuous energy,” and those rights may be exercised against all available power and energy produced at the Churchill Falls Plant other than the power and energy associated with the Twinco and recall blocks.

3.  Hydro-Québec is not limited in its requests for delivery of energy blocks by a monthly cap established on the basis of the notion of “continuous energy” in the renewed contract.

4.  CF(L)Co must deliver to Hydro-Québec, upon Hydro-Québec’s request, the power available and all the energy produced at the Churchill Falls plant other than the power and energy associated with the Twinco and recall blocks.

5.  CF(L)Co does not have any right to any amount of power and energy from the Churchill Falls Plant, except the power and energy associated with the Twinco and recall blocks.

6.  CF(L)Co is unable to sell to a third party, including Newfoundland and Labrador Hydro, any amount of power and energy other than the amount associated with the 300 MW recall block.

If Hydro-Québec obtains these declarations, CF(L)Co will, until 2041, be required to deliver the power available and all the energy produced at the Churchill Falls Plant to Hydro-Québec, other than the Twinco and recall blocks. No appreciable CF(L)Co production for Nalcor could occur because it would conflict with CF(L)Co’s obligations to Hydro-Québec.

The Water Management Agreement, on which the Muskrat Falls Project relies, would be rendered ineffectual.

Bern Coffey

St. John’s

Organizations: Hydro-Québec, Newfoundland and Labrador Hydro

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Recent comments

  • Wondering
    August 08, 2013 - 11:10

    Bern, I suspect you are right. But....1. why haven't you taken this to court here?. 2. Are you and Cabana on the same page on this issue, or would court arguments been different if you went to court? 3. Why is Vision 2041 Group incorporated? What benefit or objective does incorporation give? 4. Cabana has stuck his neck out in this court challenge, and he is not a lawyer. Your group is all lawyers, but took no court action. This suggests a lack of courage as to the conviction of your argument, or a lack of resources if , like Cabana, the judge slaps you with costs of the other parties? In any case, it seems silly to put these arguments in the press instead of in court? Why did you not seek assistance from supporters and critics, if court costs is an issue?

  • H JEFFORD
    August 07, 2013 - 19:47

    I think its time for NFLD or the Federal High court of Canada or Some Higher court to take a look at and investigate the one sided Contract now in place between Quebec and NFLD That was supposed to have been signed by the party that travelled to Quebec from NFLD to draw up and sign a contract to develop the Churchill Falls Hydro-development, The problem with this contract that was supposed to have been signed by both parties from Quebec & NEWFOUNDLAND is that while returning to NEWFOUNDLAND aboard CFEL.cos private jet the jet crashed into IOC CANADA No. 6 iron ore pocket in Lab City And Exploded all aboard were killed and everything destroyed along with it was the NFLD Copy Of The Contract To Develop The Churchill Falls HYDRO Development Since the Churchill Falls Hydro Started Production and selling power Quebec has received over $ 20 BILLION Dollars for their share of the POWER NEWFOUNDLAND HAS ONLY RECEIVED $ 1 BILLION DOLLARS ? THERE APPEARS TO BE SOMETHING WRONG HERE ! IF THIS IS NOT A ONE SIDED CONTRACT WHAT IS ? Contracts signed are suppose to treat both sides equally fair and just to both sides ? there appears to be something wrong Here.

    • Lucien Beauregard
      August 08, 2013 - 15:05

      Message to Mr H Jefford Your request to have the Churchill Falls one sided Contract investigated has already been done : On February 23, 2010, CFLCo filed a motion in Quebec Superior Court against Hydro-Quebec to address inequities in the 1969 Upper Churchill Power Contract pricing.. According to information I received from Karen O’Neil, Vice President, Corporate Relations, Nalcor Energy, on June 07, 2013, the trial is set to start on SEPTEMBER 9, 2013. My question is: How comes nobody in Newfoundland, absolutely no body, seams to be interested to win that trial ? There is $40 billions Newfoundland can get easily if you inform Quebecers that Churchill Falls power lines connected to Hydro-Quebec grid might be disconnected for ever if contract is not reopened and rewritten before trial start. Lucien Beauregard, ing Sainte Julie Quebec

  • Cyril Rogers
    August 07, 2013 - 10:44

    Okay, Mr. Coffey, your points are well-made and well laid out. That the government continues to rush this Muskrat Falls project through without clarification of these basic issues, is simply mind boggling. My question for you and the other lawyers involved is why you and they don't get behind the effort by Brad Cabana to determine the constitutionality of the Water Management Agreement and its impact on the Upper Churchill going forward. What impact would a negative outcome for this province have on the whole Muskrat Falls deal? This project is fraught with risk and it seems to me that you and your cohorts could do more than talk about it. You have the expertise, the resources, and the wherewithal to try to block any further development of MF, until such time as these matters are clarified. Why not at least make an attempt, given the significance of this issue. Many of us would support you in any way possible!

  • concerned
    August 07, 2013 - 06:55

    It is clear that HQ querries, if confirmed by the courts, will make the WMA ineffective. The results is that MF will have to chase the flows of the Upper Churchill. In real terms this means that Holyrood can not be decommissioned until more capacity comes online (Gull Island). Nalcor in their strategist runs did not model what will happen in reality. Thus Muskrat Falls is not the lowest cost option. Nalcor dropped the ball on this one when they did not seek legal certainity before proceeded to spend copious amounts of tax payer money.

  • Cashin Delaney
    August 07, 2013 - 05:18

    These various generation plants all run from the same river. It would seem logical that a system of management would be introduced that co-ordinated the flow of water with the river's best interests in mind, not Nalcor or Hydro-Quebec. Hydro-Quebec, CFLco, Nalcor would all be at the whim of nature, as determined by a governing body whose goal is the mitigation of adverse effects downstream. Take what the river gives you in output and live with it. A court of law should not force a river to mismanage itself. Bernard Valcourt and Nalcor Energy should have a conversation about this. We cannot depend on lawyers and engineers to connect the dots of common sense & morality when protecting our homeland.