What will it take to shut down the Muskrat Falls dam project? First power was scheduled to go online in 2017. The cost was to be $7.2 billion. The project is four years behind schedule and $5 billion over budget.
Newfoundland and Labrador Hydro has said it will send its recall power in 2018 from Churchill Falls. This will mean we will get low rates of about five cents a kilowatt hour for three years. Then, in 2021, Muskrat Falls will come online and the rate will be 60 cents a kWh and the island will be cut off from Churchill Falls for 50 years.
The only way we can survive this crisis is for the government to break up Nalcor — totally separate Hydro assets, including Churchill Falls, and oil. When this is done, mothball the Muskrat Falls dam project. This would allow the Public Utilities Board to do its job and keep power at the least cost.
When N.L. Hydro sends its recall power to Soldiers Pond, the blended power should be about seven cents a kWh. With this low rate the government can tax it up to four cents a kWh. This tax should be used for debt reduction or interest payments on the debt. This tax could be called the Muskrat Folly Tax.