Why Canada 150 is hardly shaking the nation
Everyone loves a party. Whether it marks a birthday, the end of school, a promotion, an important milestone, a party signifies a gathering of like-minded people to celebrate.
A downstream view of the spillway at Muskrat Falls, February 2017.
Where to begin? With Nalcor boss Stan Marshall saying the Muskrat Falls project, “should never have been built”?
Or with his ringing endorsement, “I think this project is a hell of a lot worse than the Upper Churchill”?
That was the tenor of Friday’s news conference where Marshall outlined that the hydroelectric project is another $1 billion over budget, with Muskrat Falls now coming in at an almost unimaginable $12.7 billion.
Somebody speculated on energy prices and lost. And the consumers of this province are going to pay for it.
Nalcor CEO Stan Marshall
Not only did the past administration of the project low-ball the capital costs, they low-balled the ongoing operational costs, too. The only possible conclusion? That an administration that wanted a dam cherry-picked the sort of numbers that would make the dam a reality.
In 2012, the operating costs were pegged at $35 million a year. Now, the numbers have risen to $109 million annually.
Stop and consider just those extra operating and maintenance costs for the project’s generation and transmission assets; at an additional $75 million a year and a basic 50-year asset lifespan (though dams actually last longer), that’s a whopping $3.75 billion in operations and maintenance costs that apparently wouldn’t have been taken into account when the government told us that Muskrat Falls was the lowest-cost source for power.
That $3.75 billion total over the titular 50-year project lifespan is our math, not Marshall’s, but even he has questions about how operational and maintenance costs were calculated.
The public, Marshall says, was misled.
“I don’t know what the motivation was. I don’t know what happened and who made the decisions. Unfortunately I have seen a lot of evidence … which suggests to me that intentionally or otherwise, the costs were significantly underestimated,” he told reporters.
So what happens now? Well, as electrical customers, we get ready to pay. And pay.
Marshall, as usual, was blunt: “Somebody speculated on energy prices and lost. And the consumers of this province are going to pay for it.”
And, as end-users, we’ll pay all over the place. We’ll pay for additional municipal and provincial government electrical expenses through our taxes, for supermarket coolers, lights and freezers through our food bills, and the list goes on.
Oh, and just to get back to comparisons with the Upper Churchill?
Marshall’s point should surprise no one. With the Upper Churchill, we only lost what could be described as our fair share of the project’s profits.
Muskrat Falls is going to reach into all of our pockets, and shake the money out of our wallets. Lots of money.
And, if Premier Dwight Ball’s promise to soften the hit on current ratepayers lengthens the borrowing terms on the project, our children and even our children’s children are going to pay for this boondoggle.
That’s a hell of a lot worse.