If you thought January’s power bill was bad …

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Many consumers in Newfoundland were shocked at the recent surge in their hydro bills in December and January. Please consider these points as we look to the near future when Muskrat power comes on stream.

• The Public Utilities Board (our only protection against being charged unreasonably high rates) will have no say when it comes to increased rates involving Muskrat power. The huge bill (billions of dollars) will have to be paid each month to the financial institutions.

These institutions were so glad to lend us such large sums not because of the soundness of the Muskrat project, but because they know ratepayers (us) are locked into repayment, and as further assurance, the federal government backs up the loan with their ironclad guarantee. We are being sold on the idea that they liked the project so much that they were glad to lend us the money. What a pile of hooey (or as we like to say, “a bunch of crap”). They liked the guaranteed interest rates — the viability of the project did not matter in the least to them. That is the truth of the matter.

• If you remember some of the discussion in Nova Scotia last fall, their government and its utilities board wanted protection against high rates for their consumers. Contrast this with our government’s stand in removing our only source of protection. In other words, “the consumer be damned” — their primary objective was to ensure the financing of the most expensive hydroelectricity on the planet.

• There may be a ray of hope for

us defenseless consumers. We can demand of all political parties (we will have an election soon, remember) that the revenue accruing from sales of Muskrat power to other parties must be used to ensure that our electric bills will not go through the roof when this shockingly expensive power comes on stream. That, to me, is our only hope for ensuring that many will be able to pay their future hydro bills without having to choose between staying warm or getting proper food.

Remember, Nalcor and the provincial government have no idea of the ultimate bottom-line cost of this project when we consider the inevitable cost overruns (just check out the shocking cost overruns of recent Manitoba hydro projects). It should be noted here (and I may be wrong) that one of our political parties has already committed to doing the above with the proceeds of the sale of “surplus” power.

By the way, the cost of two extra hydro power lines (one in Labrador and the other from central Newfoundland to the Avalon, which is sorely needed) will be over $600 million — who pays for this, I wonder? Talk about the extra costs that have been downplayed by  Nalcor and this  government!

Charlie Menchions

Sandy Cove, Eastport Peninsula

Organizations: The Public Utilities Board

Geographic location: Nova Scotia, Labrador, Manitoba Eastport

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  • Corporate Psycho
    March 07, 2014 - 21:50

    Wait until you have to choose between heat or food.

  • Me-old-stick-in-the-mud
    March 07, 2014 - 16:17

    My Quebec teaching colleagues here in Newfoundland, tease me in their terrible French/English accent by saying, we hear the “derriere” of your fellow Newfies is freez ing. What is the prob lem, Johnie? No elec tricity! We can always sell you some elec tricity from “our” Churchill Falls, Labrador.” You (petite) little Newfiefies must not catch cold.” The 1969 power contract, signed 40 years ago, between Hydro-Quebec and the Churchill Falls Labrador Corporation (CFLCo), becomes automatically renewable in 2016 with arrangements predetermined. Thanks to a Mr. Donald Gordon, CFLCo chairman, and CFLOo’s management of the day. The contract reads that most all the power must be sold to Hydro-Québec at an extremely low price. Basically, it amounts to a contract “piggybacked” onto a contract. During the renewal period the price is pre-set at $2 per megawatt hour (MWh). Even in the late 1960s, a price of $2 was extraordinarily low! In 2003, Hyro-Quebec received an average of apx. $85. per megawatt hour MWh! That was the rate 11 years ago! They buy the electricity from Newfoundland for $2. per (MWh), and will continue, after the 2016 contract renewal, to buy it at that rate for another 25 years! Actually, 50-75 years in the future! It is unlikely that Newfoundland will even cover its operating costs at Churchill Falls after the contract is renewed in 2016, making it necessary for us “Newfies” to subsidize Hydro Quebec far into the future! Yes, certainly, Joey Smallwood deserves blame, but, it appears it was CFLCo that sold the shop, and mortgaged its assets. Not to exonerate Joey, whatsoever, but, it appears, Joey was only told about the final contract by Chairman CFLCo Donald Gordon, after a “fait accompli’ - the contract had been signed. The renewal clause has received practically no public attention and has not been an issue in past litigation! Bring on BILL BARRY. He is the man to correct this injustice, I hope. Even Danny, could not rescue us, but, Danny was a townie lawyer, meek and mild. Bill Barry is a bayman, rough and tough. Can he put those Frenchmen’s’ derriere, finally, in their place? Quebec separation talk is surfacing again, as they head into an election on April 7. For me, they can’t separate quickly enough! However, they never, never will separate! They know, well, what side their bread is buttered on, and, a lot of that butter is made right here in Newfoundland and Labrador Me-old-stick-in-the-mud

  • M. Atkinson
    March 07, 2014 - 11:43

    Well said Mr. Menchions. I wish everyone would wake up about this. And SNC Lavalin is not known as a good corporate citizen either. What a disaster for Newfoundland!

  • Jon Smith
    March 07, 2014 - 10:47

    Each Newfoundland ratepayer has to pay his/her share of the $450 million average annual revenue that government and Nalcor have stated that they will expect from the project. That works out to an average increase in each electric bill of about $ 2000 per year. We will all try to conserve energy but it will have negligible effect on reducing our $2000 average spike in annual cost of ratepayer's electrical energy bill. And the fact that we will be subsidizing exported power will add insult to that injury. That is what we get when we elect a majority government that believes that we will accept an un-scrutinized project that is not economically sound. Hence the statement by the government that one day we all come to believe that Muskrat is a good project.

    • Where will YOU get the extra money?
      March 07, 2014 - 12:31

      Right now the thought of paying perhaps $2000 more per year for electricity is like a hazy dream. Very soon it will be a harsh reality. We'll all be paying perhaps $2000 more for nothing additional to what we were getting before. People who had only a little disposable income per month for a few little extras will have no disposable income. Cutting out one medium daily double-double at Tim's will only contribute $637 per year to your new (additional) $2000 electric bill. Cutting cable might save another $600 per year. What else are you willing to do without? Think about it, because it's coming soon! And the extra cost may be far more than $2000 per year.....

  • Sprung Greenhouse Fiasco
    March 07, 2014 - 10:00

    We should trust our politicians. They don't need anyone analyzing or critiquing their decisions and strategies when it comes to spending citizens money - certainly not the PC party. Anyone remember the sprung greenouse? That project was almost 100% overbudget. From http://www.heritage.nf.ca/law/sprung_greenhouse.html: "The [Royal] commission found that the government acted in an "improper fashion" by failing to bring the various loan guarantees before the House of Assembly for debate. It recommended that independent experts should assess all future government ventures and that any financial commitments should be fully debated by the legislature."

  • Graham
    March 07, 2014 - 08:55

    I just looked at my power bills, all electric heat, for my house of 1000 sq ft, it is occupied only about 10 days per month, but the heat is constant at 23C day and night, even when unoccupied. I am showing the total energy consumed, less the meter charge and less taxes. From Dec 16 to Jan 16 , 911 kwh @10.945 cents per kwh, for a cost of $99.71. For Jan 16 to Feb 18, 789 kwh for a cost of $86.36. These cost includes hot water ,electric stove, fridges, lights when occupied. The heating portion is about 60.00 per month, full 31 days per month heating. The heat is an electric heatpump minisplit. These need to be carefully sized and of a type that can operate at minus 20 C. Any wonder the power companies are not encouraging the use of these? When MF comes on with power hikes of 50 percent or more, .... do the arithemic..... I will still have a very low cost. You can see why this approach was not taken by our government, they are either stupid or uncaring about the consumer. Any most Nflders are in the dark, so to speak, of this alternative. It would have saved billions . These systems have been used worldwide for more than 20 years.

    • Cyril Rogers
      March 07, 2014 - 09:55

      Graham, this was never about the consumer or any real need for the power from Muskrat. It is being driven by the greed of the business sector in St. John's and heaven knows where. Further, Ottawa's loan guarantee only covers half the cost of the entire project. How much will we pay in interest on the remainder? …….How much will we earn from Nova Scotia sales(oh, I forgot…it all goes to NALCOR)…..The only real solution is to scrap Muskrat and disband that oligarchy called NALCOR. That conglomerate is the biggest financial obstacle we have going forward.

  • Maurice E. Adams
    March 07, 2014 - 07:05

    Excellent points. However, The cost of this project (and the recovery of such costs will be added to rates) will likely be about $10 billion. 20% of the 60% going to Nova Scotia has no revenue associated with it. The other 40% (at market rates) will probably bring in somewhere between $30-$70 million annually (a relatively small amount compared to the cost for Muskrat to be added to rates)........ If government paid for the purchase and installation of mini-split heat pumps for 200,000 households that currently uses inefficient baseboard heat, it would save ratepayers about $200,000,000 million a year --- EVERY YEAR (reduce rates, and eliminate the need for the $10 BILLION Muskrat boondoggle) . My recently installed heat pump will be saving me about $1000 a year. Just do the math.

    • Graham
      March 07, 2014 - 09:32

      Maurice , you mean $200 million per year?

    • Maurice E. Adams
      March 07, 2014 - 10:04

      CORRECTION, yes --- $200 million per year.

  • John Smith
    March 07, 2014 - 06:39

    While the PUB will not influence rates set by Hydro, they will still control rates set by NL Power, whom 90% of us get our power from...

    • Just sayin
      March 07, 2014 - 08:28

      John, what garbage from you. Yes 90 percent of us get our power from Nfld Power, but Nfld power has only 80 MW of their own hydro generation, out of an isalnd demand of about 1700 MW. Nfld Power must buy 95 percent of their energy in winter from Nfld Hydro. So the high cost will be just passed along to Nfld Power , and to the customer. For you to suggest otherwise is deliberately misleading by you..... but that 's what you aim to do , right?

    • Tony Rockel
      March 07, 2014 - 13:29

      This isn't your usual lengthy response, "John"---have you turned off your bullshit generator to help us avoid another power outage?