Nalcor is using a power purchase agreement (PPA) approach with the costs for the Muskrat Falls generating facility and the Labrador/island link over a 50-year period. PPAs bring lower rates in early years which are intended to be offset in later years. In 2017, Nalcor will calculate the cost of the entire project.
Loan guarantee, cost overruns, sale of excess power mean nothing to Nalcor. Let me explain: a PPA is like a credit card. Think of the total cost of the Muskrat Falls project as the balance on your (ratepayer) Nalcor credit card. Starting in 2017, each month for 50 years you will be charged the minimum monthly amount, plus interest on the unpaid balance. This will be melded in with the 85 per cent of low-cost power we have on the island.
Over this 50-year span, Nalcor stands to make billions of dollars from the ratepayers, while we pass down credit card debt to future generations. I could be out to lunch on my reasoning; the only references to how we were going to pay for Muskrat Falls was in the PUB report. I welcome any corrections or comments from Nalcor or anyone else.