The ninth circle of hell? Muskrat Falls

Peter Jackson
Published on July 9, 2014
A view of the site cleared for Muskrat Falls construction, circa January 2014. Some of the cleared area will be used for the switch- yard to be built for the hydro power plant. — Submitted photo courtesy of Nalcor Energy

I am a masochist. The kind who likes to wade into a pool of alligators with nothing but a Swiss army knife in hand.

I expect to feel the bite of rebuttal to this column, as I’m not really a numbers man. Nonetheless, like many people in this province — dare I say most — I am fed to the teeth with Muskrat Falls and the relentless ranting and roaring that surrounds it.

The daily online forum I host (Naked Lunch, weekdays at 12:30) is often populated by Muskrat Falls critics talking about how the province is headed towards unending poverty and sorrow. Our politicians are destined for something worse, perhaps Dante’s eighth circle of hell, where they will be forever immersed in a lake of boiling tar, a metaphor for their sticky fingers and inky black hearts.

Unable to afford our costly electricity, citizens will torch their furniture to keep warm. And in the end, the Churchill River will burst through the porous North Spur muck and leave the great dam of damnation sitting in the middle of nowhere, forlorn and without purpose.

Before the alligators lurch, let me first say I am indeed skeptical about Muskrat Falls — or at least more doubtful that a cheaper alternative couldn’t have been found. In fact, the whole idea of a Maritime route for electricity seemed truly preposterous to me at first. Surely it was a ploy, I thought — an idle threat to weasel a better transmission deal out of Quebec.

And while Muskrat Falls may have been a lower cost option —  or at least a comparable option — when it was announced four years ago, changing energy markets and cost overruns leave little doubt such advantages have been erased.

But I will say this.

We are not the only province that’s going to get hit hard with electrical prices.

In December 2013, the Ontario government released an energy plan that projected a 42-per-cent hike in residential power bills by 2018, rising to 68 per cent by 2032.

In B.C., the government predicted last November that annual rate hikes there will add up to about 45 per cent over the next decade. According to the Vancouver Sun, critics in that province say greater increases are likely if projects such as the proposed $7.9-billion Site C dam come on stream in 2024.

These rate hikes are comparable to those projected by Nalcor last month.

Unfortunately, Nalcor’s name is North Spur mud in the minds of its critics.

In lieu of accepting their projections, some have taken to painstaking calculations that forecast rates spiking as high as 85 per cent. That figure comes from an anonymous engineer named JM, published online by blogger Ed Hollett. Among other contingencies, JM projects Nalcor will lose a water rights challenge by Quebec. (A link to JM’s argument is available at

All these numbers are maddening, both in terms of scale and in terms of variability between Nalcor and critics.

But there are a couple of other things to keep in mind.

‰ This project will, as many critics point out, essentially double our public debt. But it’s a different kind of debt, managed not by sapping conventional government revenue but by electricity rate hikes that would have increased to some degree in any case.

‰ The revenue from export sales of Muskrat power will be minimal due to market conditions, but export sales were not included in the original calculations of Muskrat’s viability. They were considered gravy — even if that gravy will be a lot thinner than projected.

In short, it’s fair to say we’d have been better off if Muskrat Falls had not gone ahead. Margins change, and in this case, they clearly haven’t changed for the better.

But please, spare me the agony and despair. I’m sure we’ll pull through — somehow.

Peter Jackson is The Telegram’s

commentary editor. Email: