Former premier of Newfoundland and Labrador Danny Williams was cross-examined at the Muskrat Falls Inquiry on Tuesday, following a full day on the stand to start the week.
Questions put to Williams covered a lot of ground, including comments he made while in office, and after his departure in November 2010.
‘Disappointment’ with the PUB
“I made the statement that it appeared to me (PUB chair Andy Wells) was exhibiting some pre-determined notion as to how this was all going to end.” – Danny Williams
The inquiry flashed back to when the Newfoundland and Labrador Public Utilities Board was asked to compare two options for meeting the province’s energy needs – an “isolated island” future and a “interconnected” future that later became the Muskrat Falls project.
When the PUB reported in April 2012 it could not give a definitive answer, given the information it had been provided was not complete, detailed or current enough, Williams called the decision was “unacceptable,” and said again this week, he was “disappointed.”
On the stand, he repeated his belief that Wells, former PUB chair and a former mayor of St. John's. had indicated a bias against the option of a hydro megaproject early on.
Williams was not party to the back and forth between the government of the day, including Natural Resources Minister Jerome Kennedy and Wells.
Just a few days before Christmas in 2011, the month after Nalcor Energy’s submission to the PUB on the options, Kennedy wrote Wells acknowledging a request for more time for the review. Kennedy told Wells the government had promised people in the province a report tabled in the House of Assembly in the spring session, so it was “of critical importance” the PUB filed a final report to government by March 31, 2012.
Kennedy said, to help things along, Consumer Advocate Tom Johnson had been told to focus on areas that might otherwise not be covered, and said the resources of government would be available to the PUB.
“It is acknowledged that the (review) process referenced in your letter of Dec. 16, 2011 adopts the process that the Board followed in 2005 when it was asked to complete a review of automobile insurance rates pursuant to Section 3.1 of the Insurance Companies Act, a far reaching activity which involved matters of public policy and an investigation of competing insurers proprietary information and loss experiences,” Kennedy wrote.
“That activity was activity that was not burdened by the same time sensitivities as the current review.”
In a separate letter, Kennedy told Johnson he expected ratepayers to have a “consolidated” voice in the review process, and there were legitimate reasons certain confidential exhibits had not been provided.
“It was not contemplated that the Consumer Advocate would complete its own independent analysis of the project,” stated the letter, made available by the province in response to an access to information request.
In August 2017, in an interview with The Telegram, Wells spoke about asking for more time for the review when it was ongoing.
He said he privately issued warnings to government officials and government members about pursuing the Churchill River hydro project option.
Wells and Johnson are both scheduled to be called to the stand later in the Muskrat Falls Inquiry.
A political mandate
“I think the election was significant.” — Danny Williams
Williams recalled his opposition to an earlier proposal to develop a hydroelectric project on the lower Churchill River, when proposed under former premier Roger Grimes.
He said Quebec had too much control, but also Grimes had not led his party to victory in a general election – that he didn’t have a mandate to do the deal.
Williams succeeded Grimes as premier in 2003. He led the Progressive Conservatives to a clear victory in the polls again in the fall of 2007, following the announcement his government planned to pursue a Lower Churchill Project the province could lead.
Subsequent premiers, including Williams’ successor Kathy Dunderdale, said they considered the general elections to be a vote of confidence, or lack of confidence, in the approach to the project.
“We’ve got a lot of expertise in our province in doing these projects. The Upper Churchill I think is probably the eighth largest in the world, the fourth largest in Canada. So this is not something we’re going in and doing in our eyes closed that we don’t know anything about.” — Danny Williams
Initially in his testimony it sounded as if Williams was saying the people who had helped build the Churchill Falls project in the late 1960s were contributing expertise to the build downriver. Later Monday and on Tuesday, he spoke about the experience now existing in-house at Nalcor Energy being from the operating (versus building) of the Churchill Falls hydro plant.
He said the province and Nalcor Energy had megaproject experience related to the oil and gas industry and projects offshore, with components built in Newfoundland and Labrador.
Williams endorsed project leaders Ed Martin and Gilbert Bennett, saying Nalcor Energy also brought in hydroelectric expertise as needed, including through engineering, procurement and construction management contractor SNC-Lavalin.
“My understanding is that we were going through a lengthy and detailed environmental review process, which I assumed would be dealing, and would be addressing, and would be questioning methylmercury issues.” — Danny Williams
The report from the joint review panel for environmental assessment of the Lower Churchill Project was issued after Williams left office.
In the August 2011 report, the provincial-federal review concluded, “it was still uncertain whether methylmercury would bioaccumulate in fish and seals to levels that would require consumption advisories,” but if people did have to warned off eating the fish and seals it would amount to “significant adverse effects” for the people in Goose Bay and Lake Melville, including Labrador Inuit who had expressed specific concern over the possible outcome.
The Nunatsiavut Government appealed for additional clearing of organic material from the Muskrat Falls reservoir and research specific to the Lake Melville estuary. Nalcor Energy did not support their proposals, but research ultimately undertaken by a team led by Harvard University did find the estuary to introduce some unique environmental factors, leading to greater concern over methylmercury amplification and ultimately exposure.
A “Make Muskrat Right” appeal was launched and public debate over methylmercury and other environmental concerns ramped up, leading to a meeting of Indigenous leaders in St. John’s in the fall of 2016 and a commitment to further review of the issue by an independent advisory committee.
With opposition from the Innu Nation, a suggested mitigation measure of clearing of topsoil in the reservoir was not pursued by the province and Nalcor. The Innu Nation were concerned the additional clearing might cause unforeseen damage.
Really a transmission project?
“I know that Fortis are interested in acquiring those transmission assets as well.” — Danny Williams
Williams was asked Tuesday about current Nalcor Energy president and CEO Stan Marshall’s comments suggesting the Muskrat Falls project as being largely a transmission project - placing the focus on the Labrador-Island Link transmission line, connecting Labrador and Newfoundland, new connections in Labrador, and the associated Maritime Link project, connecting the island of Newfoundland and neighbouring Nova Scotia.
Marshall was formerly president and CEO of Fortis and remains a shareholder, the former being something Williams noted in his response.
The former premier spoke more than once about Marshall having a changing position on the project overall. Marshall, he said, is now being “flowery” in his language, seeing how the project will fit in the bigger picture.
Marshall was already before the inquiry, to offer an introduction to the different project components, but is scheduled to be recalled in 2019.