Muskrat Falls: the risk is all ours

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I would like to comment on the informed analysis by Cabot Martin concerning “the perfect storm” in respect to the Muskrat Falls project. Mr. Martin’s analysis clearly points out the inflated assumptions that, by any reasonable standard of review, would cause one to shudder at the consequences of the exorbitant risk being taking by our government. 

As Mr. Martin pointed out, Nova Scotia has secured the very best of the economics of this project by carefully scrutinizing every detail of the project through various phases of public review — something our government denied Newfoundlanders and Labradorians.

Nova Scotian ratepayers have achieved a similar benefit as the people of Quebec have from the development of the Upper Churchill development.

In closing, Mr. Martin expressed hope that the financial backers would shun the project due to its lack of economic viability.

No risk

Well, that wish was never realistic, as a substantial loan guarantee by the taxpayers of Canada has minimized the risk of default, but what is even a bigger assurance to the banks is the fact that our government has legislated that Nalcor will be guaranteed its revenue to pay for the project by being placed in a position to charge ratepayers and taxpayers in this province whatever it takes to make its payment obligations to the banks.

Sure bet

So just imagine going to the bank for a mortgage for 35 years and stating that the government of Canada is going to guarantee 50, 60, 70 per cent of the mortgage and that, even if I lose my job and go bankrupt, all the rest of the people of Newfoundland and Labrador will be forced by legislation from our own government to pay off my mortgage.

There is no bank in the world that would not jump at this opportunity to make that loan.

The banks have no risk on the Muskrat Falls project.

So where is all this risk on this megaproject?

All the risk has been squarely placed on the ratepayers and taxpayers of this province — that is what our government has done without any public review.

High rates

Get ready for 2018 and beyond, because our cost of electricity is most likely to be at record levels in comparison to any other jurisdiction in North America, and if our rates are not adjusted to pay for this very high-risk undertaking, our public revenues and taxes will be subsidizing Nalcor.

There is simply no other way to pay for this project.

It is most unfortunate that, as a people, we allow public institutions, such as the Public Utilities Board, that were specifically established to protect us from short-sighted politics, to be bypassed.

Pay the piper

Our premier now says that there is nothing left to do but build Muskrat Falls — well, she is wrong, because the biggest challenge is yet to follow.

We have to pay for this “perfect storm,” as Mr. Martin so well describes it.

And, by the way, the project costs are far from being known as well.

Gabe Gregory writes from

Portugal Cove-St. Philip’s.

Organizations: Public Utilities Board

Geographic location: Canada, Nova Scotia, Quebec Newfoundland and Labrador North America Portugal Cove

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Recent comments

  • H Jefford
    December 18, 2013 - 20:54

    There will always be a sale for clean safe power the oil fired Generating plant at Duffs Generating plant is burning that much Bunker crude oil that the smoke coming out of its stacks has it listed as one of the top 10 dirty air polluters in the world, What is the Coal Burning Generator plants in North Sidney Listed AT ?

  • Cashin Delaney
    December 15, 2013 - 20:09

    I can't stress enough that framing the debate within financial metrics repeatedly is taking public attention away from the more direct threats to our province in the form of mecury pollution, social degredation of adjacent rural communities, elevated river temperatures and a host of related ecological damage. The project is a dog compared to other hydroworks, but justifed by a federal carbon credit scheme more nebulous than the financials.