We’ll be paying a long time

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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.

Gerry Goodman

St. John’s    

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  • Corporate Psycho
    August 22, 2013 - 20:17

    Bout sums it up Gerry.

  • Tony Rockel
    August 22, 2013 - 14:52

    No, Gerry, you are not out to lunch, but the Dunderdale government certainly is, and they're several sandwiches short of a banquet.

    • Bruno Marcocchio
      August 22, 2013 - 15:45

      Gerry you understand the tortured financing and putting off paying for MF when it is commissioned (like all energy projects). The financing is for 57 not 50 years! The grandkids wont be pleased they are on the hook for essentially paying the accumulated interest that will cost ratepayers billions extra over the cost of construction that will likely come in close to 12-14 billion. This at a time when consultants to the energy industry are warning that traditional 30 year financing poses a risk to utilities due to radpdly changing production and distribution of energy!. Unfortunately there is no risk for Nalcor who have a captive market with the Nalcor monopoly and a guaranteed return. Ratepayers and their kids and grandkids will pay a heavy price for the most expensive power ever produced in N America.