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Nalcor Energy didn’t report in full, Jerome Kennedy tells Muskrat Falls Inquiry

Former natural resources minister Jerome Kennedy at the Muskrat Falls Inquiry Monday in St. John’s.
Former natural resources minister Jerome Kennedy at the Muskrat Falls Inquiry Monday in St. John’s. - Joe Gibbons

Former minister testifies he believes important information did not reach his level

Former natural resources minister Jerome Kennedy says, looking back, he would have done some things differently with respect to the Muskrat Falls hydroelectric project.

But he also said there are related reports he believes should have been provided to the government by Crown corporation Nalcor Energy.

On the stand at the Muskrat Falls Inquiry on Monday in St. John’s, Kennedy was asked about the fact no provincial government department, including his own, had an independent and detailed analysis completed of Nalcor Energy’s cost estimates. He said he was “surprised” with that finding, but the questions quickly moved on.

In terms of the “cold eyes” reviews often mentioned by the government, he wasn’t aware of details. He said he wasn’t aware at all of the “Independent Project Review” (IPR) team working for Nalcor Energy. He had not seen its report, commenting on project risk and reserves. The IPR report, by evidence at the inquiry to date, was not included in full in information packages transmitted to the corporation’s board of directors and to the government.

Kennedy was asked about work by Westney Consulting, and a report suggesting roughly $500 million in strategic risk the province should be prepared to cover. In years of his notes now in evidence, he made one reference to Westney as “West nave,” misunderstanding the company name when it was mentioned. The company was doing risk analysis, he noted.

He testified the results weren’t brought to him.

“I think the first time I’ve seen any of these reports, Mr. Learmonth, would have been (when) you asked me during our interview. I was quite surprised, sir, by some of the information you provided that day."

— Jerome Kennedy

He said he couldn’t recall any conversations with Nalcor Energy relating to “P factor,” to probability factor, affecting estimates. There was one reference in his collection of notes, where he wrote the figures “P50” and “P90.”

“It meant nothing to me. I’m writing down what I’m told. And it’s totally in reference to Emera,” he said in reference to that note.

He said he never heard the phrase “hit squad” in reference to House of Assembly debate and he doesn’t know why it was found by the inquiry on Nalcor Energy letterhead.

“The terms that are in here, they’re not terms that I would use,” he said when asked about the notes.

Kennedy was also asked about a review of the proposed power project by the Public Utilities Board (PUB) in 2011-12, alongside an alternative. The PUB found it did not have enough information to make a proper conclusion about which option was cheaper for the province. Kennedy — at the time — said the PUB decision showed a “lack of respect” and was a failure to meet its statutory mandate.

Asked about it on the stand, he said the comments then were “inappropriate.”

His testimony is scheduled to continue Tuesday. He is set to be followed by Charles Bown, who was working under him in Natural Resources at the time.

Twitter: @TeleFitz

Related story:

The Muskrat Falls Inquiry

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