PUB consumer advocate wants Muskrat Falls inquiry

Published on July 18, 2017

Public Utilities Board consumer advocate Dennis Browne says there needs to be an inquiry into Muskrat Falls, and the PUB needs to be responsible for devising a rate-mitigation scheme.

©James McLeod/The Telegram

The province’s consumer advocate is joining the call for a public inquiry into Muskrat Falls, saying a full, transparent examination is necessary in light of how the massive hydroelectric project was sanctioned.

“I think it is inevitable there will be a full public inquiry,” consumer advocate Dennis Browne said.

“People have to be held to account, because it has turned into a boondoggle. It is a failed project. We don’t have any idea where it will end.”

The consumer advocate is a position with a formal role to participate in Public Utilities Board hearings when it comes to regulating power rates. Browne is supposed to be the voice of the consumers.

Browne was one of the prominent critics of the Muskrat Falls project in the lead-up to formal sanctioning of the project. He said there was plenty of information at the time to know the hydroelectric project was unnecessary and would wind up as a major economic burden for the province.

Premier Dwight Ball has said an inquiry is a possibility for Muskrat Falls — so is a forensic audit of Nalcor Energy — but not until the hydroelectric project is fully built, so the investigation doesn’t disrupt operations.

Brown was largely in agreement with the idea of waiting.

But when he sat down with The Telegram this week, Browne made it clear his frustrations over the 2011 and 2012 sanctioning process are still relevant today.

“We wanted due process before the Public Utilities Board. That’s all we ever wanted,” Browne said.

“We knew if there was due process there and they followed the law, it would never have passed the parameters of the Electric Power Control Act, which required the lowest possible cost at reasonable rates.”

Today, the discussion has turned from whether to build Muskrat Falls — it’s 76 per cent built, albeit wildly over budget — to the problem that electricity rates, once Muskrat Falls starts generating power, will be prohibitively high.

“Muskrat Falls power rates cannot be assumed by the ratepayers of the province. It would ruin household economies, business economies, municipal economies,” Browne said. “It would have a disastrous effect on the entire province.”

The provincial government is already on top of this, although the plans are still hazy.

In the budget speech this spring, Finance Minister Cathy Bennett said she’s directing Nalcor to figure out how to mitigate rates.

“Future electricity rate management is a priority of our government. Nalcor has been directed to source $210 million to lower electricity rates starting in 2020-21, with this preliminary rate reserve growing to $245 million in the following fiscal years,” Bennett said in the budget speech. “We are committed to ensuring electricity rates are competitive and will undertake work to further define mitigation actions and dollars required.”

But Browne said this “ad hoc” approach is misguided, and it should finally come back to the PUB to untangle the mess.

“Rates have to be set and approved by the Public Utilities Board in an open forum,” he said.

Browne said ultimately it will be necessary for taxpayers to subsidize power rates, and it might take some creative approaches to billing to help address the huge cost of Muskrat Falls.