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Government can rely on Nalcor, Marshall testifies at Muskrat Falls Inquiry

Nalcor Energy CEO and president Stan Marshall at the Muskrat Falls Inquiry in St. John’s on Tuesday.
Nalcor Energy CEO and president Stan Marshall at the Muskrat Falls Inquiry in St. John’s on Tuesday. - Joe Gibbons

Crown corporation CEO says he never would have recommended project

ST. JOHN'S, N.L. —

Nalcor Energy president and CEO Stan Marshall says it doesn’t make sense for the Government of Newfoundland and Labrador to add staff and contractors, to have a “Nalcor Two,” to verify all the work happening inside the Crown corporation. 

He suggested a degree of trust between the province and the corporation is essential.

At the Muskrat Falls Inquiry on Tuesday, Marshall said the government should look to Nalcor Energy when determining power development options, approaches and costs. Nalcor can source professionals, obtain opinions and reach recommendations, he said.

“Nalcor is your principal vehicle of oversight. It has to be,” he said in response to questions from Government of Newfoundland and Labrador lawyer Peter Ralph. “That’s why it created Nalcor and that’s what Nalcor should be doing.”

Marshall said checks and balances also make sense. The board of directors is one, he suggested. And the province, particularly departments like Finance, can offer reasonable oversight.

“You can’t be double, triple checking (numbers). You’ve got to make sure that all along the way the numbers are checked by reputable experts and see if it makes sense,” he said. 

But there are limits to what should be expected from core government on assessing schedules, cost estimates and risk assessments, he added.

“I don’t think it’s realistic to expect the government to do all this stuff. It should be entitled to rely on Nalcor,” he told Erin Best, lawyer for former premier Kathy Dunderdale.

He said the province should also support Nalcor’s young professionals, mentioning the engineers who have added to their skill set with the project. He said they should be encouraged to stay, to maintain the corporation’s capabilities in key areas. 

Never would have done it

While on the stand, Marshall repeated he would never personally have recommended the Muskrat Falls project. 

He said with the amount of new transmission involved, and the fact the project involves more generation than the province needed, it wasn’t the right choice.  

Whatever earlier study, whatever options explored, he was firm on the idea. 

So what would he have done instead?

“I would have tested a scenario where you put in 150 megawatts (capacity) at Bay d’Espoir (…), I would probably have put in 300-400, 300 megawatts say, in gas turbines at Holyrood. You already have 125 (MW) there now,” he said, adding he’d then have added wind power projects.

His thinking is an addition to an existing hydroelectric facility, gas turbines and additional, private-sector wind power. 

“I think that would work much cheaper,” he said.

He couldn’t offer a cost on what he envisioned, and the aging Holyrood Thermal Generating Station would still need to be tackled. But challenged on the view, he insisted there was a better alternative to the Muskrat Falls project, given the risks involved. 

Looking back, Marshall said it would also have been a good idea to maintain a range on the project’s cost estimate early on. Instead of $6.2 billion, for example, it would be anywhere from $6 billion to $7 billion, to reflect the uncertainty involved.

And while he could offer no insight as to why it might be the case, he says it’s clear the estimates for the Muskrat Falls project were too low to begin with.
Marshall continues on the stand Wednesday.

Twitter: @TeleFitz


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