Muskrat Falls too small by itself: Grimes

Former premier critical of latest announcement on Lower Churchill

Dave Bartlett
Published on November 2, 2010
Former premier Roger Grimes is raising questions over the Williams government's latest plans for the Lower Churchill hydro development.
Telegram file photo

Roger Grimes says Premier Danny Williams’ latest plan to develop the Lower Churchill “just can’t work.”

“I can’t make any sense out of the way the premier keeps changing the water on the beans ... about what he may or may not be doing about the Lower Churchill,” the former premier told The Telegram Monday.

At the PC convention in St. John’s last weekend, Williams revealed the province is in negotiations with Nova Scotia and Emera Energy — based in that province — to try to get a deal to develop a Maritime transmission route for power from the proposed Lower Churchill hydroelectric project.

Williams also said the plan is to now develop the smaller of the two proposed dams — Muskrat Falls — first, before building a dam at Gull Island.

But Grimes said that plan is folly.

“It makes ... absolutely no sense to finance the smaller part of the project that, of and by itself, can’t make any money,” he said.

According to Nalcor Energy’s website Muskrat Falls would generate 824 MW of power, while Gull Island would generate 2,250 MW, almost triple the power of the smaller dam.

But what really makes the plan unviable, according to Grimes, is the added cost of building transmission lines to the island followed by a subsea cable to N.S.

Grimes noted the ongoing environmental assessments are only for the two dams and their powerhouses, not for the transmission parts of the project.

He also said according to the province’s own energy plan, building transmission routes to bring power to those now being served by the Holyrood generating station will mean higher power bills.

“The capital costs of building it has to be paid for by the ratepayers on the island,” Grimes said. “That means up go your electricity bills.”

While Grimes said the premier may be right to say the plan would stabilize power rates, those rates would only become stable after a “rate-shock” to consumers.

As both the premier and former energy minister, Grimes said he was “intimately involved” in a Lower Churchill deal which would have been good for the province.

But he said Williams cancelled the Liberal deal-in-principle because of politics.

Grimes said if Williams didn’t like some part of the plan — most notably the banking arrangement, — he could have changed part of the plan instead of scrapping the whole thing.

But instead, he said, Williams chose to make Quebec the bogeyman.

“Quebec is not the enemy. Quebec was prepared seven years ago to sign on to a deal where they buy the energy from Newfoundland and Labrador at New York prices,” Grimes said.

He admitted the optics of having Quebec guarantee a loan for the Lower Churchill on this province’s behalf didn’t sit well with many.

“It’s great politics for the premier here (within the province.) A lot of people like the idea of ‘shag Quebec, they shafted us back in the 60s,’” Grimes said.

But he contends if the Liberal deal went through, the province would have owned 100 per cent of the Lower Churchill. Instead, Grimes said the Williams government is now talking partnership with N.S. and Emera and still needs to get a loan guarantee from Ottawa.

Grimes suggested Williams would rather be popular than to achieve a “practical and beneficial deal” for the province on the Lower Churchill.

“All we’ve seen is the premier flying by the seat of his pants with no real plan,” he said.

When asked if he sees any benefit in a Maritime transmission route, Grimes was to the point.

“Not in my view,” he said, adding that the route has too many detours.

The Telegram contacted the premier’s office for comment on Monday.

“Thanks for the opportunity,” replied the premier’s spokeswoman in an email. “But the premier won’t be responding to Mr. Grimes.”