Paul Harrington, project director on the Muskrat Falls hydroelectric project at sanctioning, said if consultants from Manitoba Hydro International (MHI) were going to look at “strategic risk” in provincial power options, Nalcor Energy would have needed to have numbers at the ready for both options under consideration.
Harrington was questioned Wednesday morning at the Muskrat Falls Inquiry by Helga Van Iderstine, representing MHI. MHI review team members Paul Wilson, Mack Kast and Al Snyder appeared as a panel at the inquiry in October.
The MHI team testified they were not aware of a report suggesting an estimated $500 million ($497 million, being a mean value) should be available from the province in a reserve to cover “strategic risk” for the Muskrat Falls project, above and beyond existing cost estimates.
At the time, the MHI team was reviewing and updating a “cumulative present worth” (CPW) analysis, placing values on each of two, primary options put forward for new provincial power development. One option was the Muskrat Falls project and its interconnection between the island of Newfoundland and the mainland, while the other was an “isolated island” option, focused on smaller renewable developments and the island’s continued reliance on thermal power to meet main grid demand.
Their final report offered statements on the “least-cost” option for power.
Van Iderstine confirmed with Harrington his understanding was the “strategic risk” for the Muskrat Falls project was going to be dealt with separately by the “gatekeeper” (being Nalcor Energy president and CEO Ed Martin) and shareholder.
Harrington said that’s the position he would have conveyed to other project team members when MHI’s team was coming for meetings for their review. He said it’s also what he would have told the MHI team, if it were raised.
MHI’s lawyer asked more about the CPW analysis. Harrington said a “strategic risk” value was not available for the isolated island power option. If the CPW was for the comparison of the two options, he agreed it would have to be assessed to assure the comparison was fair.
“Apples to apples,” he said, following up on comments by Van Iderstine. “Exactly.”
As for any changes to their final report, the MHI team had already testified they were not pressured to change their report. Harrington testified he suggested some changes and some changes were made, but not all suggested changes were made and he did not pressure MHI’s team.
He also said he had a chance to review the MHI report when it was finalized in October 2012 and he was aware it did not include information on the “strategic risk.”
The MHI report to the provincial government was used by the province in offering the Muskrat Falls project as the “least-cost option” for meeting provincial power needs, while seeking public support for the project at the end of 2012.
Harrington finished on the stand Wednesday morning.
On Thursday, the inquiry will hear from Nalcor Oil and Gas president Jim Keating, who is expected to speak about natural gas as an energy alternative for Newfoundland and Labrador.
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The Muskrat Falls Inquiry
