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Government and Nalcor worked as ‘integrated team,’ former deputy minister testifies
The provincial government and Nalcor Energy worked as an “integrated team” at times, in support of the Muskrat Falls hydroelectric project, according to Robert Thompson, former deputy minister of natural resources and former clerk of the executive council.
Was it in conflict with the government’s oversight responsibilities?
“No, I don’t think so,” he said Wednesday on the stand at the Muskrat Falls Inquiry.
He said there was “no question” the provincial government was satisfied by responses to questions and assurances from Nalcor Energy as the province’s power options were narrowed down, into 2010. He personally asked pages of probing questions as deputy minister for the department responsible for the province’s energy corporation (some shown in emails and notes now in evidence), but he didn’t recall asking for copies of any external reviews sought by Nalcor Energy, or demanding the government contract its own independent studies, including studies of the Muskrat Falls costs and schedule as the project moved toward sanctioning in 2012.
He spoke to officials “lending a hand” to the corporation and vice-versa, reviewing Muskrat Falls-related speeches, letters and news releases. He acknowledged government officials consulted with Nalcor before a reference to the Public Utilities Board (PUB).
He testified some considerations like Indigenous affairs demanded the close working relationship, while there was also practical crossover.
“It’s hard to divorce those broader (government, natural resources) goals from the specific, energy-delivery goals of Nalcor. So that’s the sense in which I think there’s an integrated team. So then in needing to move in unison and stay focused on the goal together doesn’t mean we integrate personnel down at the engineering level, it means that we have a variety of roles that we try and integrate at the top and we have a lot of experience in dealing with each other in meetings, through dialogues, through deep questioning and that’s the sense in which I mean it,” he said in response to questions.
A meeting with the PUB chair
He was asked at one point about a meeting with Andy Wells in September 2011, while Wells was chair of the PUB. Wells spoke to it earlier in the inquiry, noting it was while the PUB was looking at the “isolated island” and Muskrat Falls power alternatives. Wells said he was inappropriately summoned to Confederation Building and asked about questions being posed to Nalcor Energy, suggesting pressure was being asserted by Thompson on the PUB to change its approach.
Thompson confirmed he did ask about the PUB’s requests for information, but denied pressuring Wells on how to proceed, saying it was to improve the government’s understanding.
As for calling the meeting, “I certainly wouldn’t have had the meeting if I didn’t think it was appropriate,” he testified.
Thompson said he could not recall why it was Wells who was present, as opposed to the PUB’s in-house counsel.
The PUB faced delayed filings by Nalcor Energy. The board received a three-month extension to its set deadline to report to the government, but not a second requested extension. It ultimately reported it did not have enough time or information to complete a fair review.
Strategic risk and a ‘P1’ schedule
Like other former bureaucrats and government members, Thompson testified he was not aware of a $500-million estimate tied to “strategic risk” the provincial government was to cover if the project went ahead.
An amount to cover was not factored into the public cost estimate for the Muskrat Falls project.
Thompson said he was involved in “periodic, if not regular” discussions of project risks and how Nalcor Energy would address risks, but did not recall the figure on “strategic risk” being shared with him.
He said he was also not aware of a “P1” probability factor for the schedule — one that would all but guarantee a planned date for first power from the hydro dam would not be met.
“We didn’t have this information, certainly,” he said, adding he was surprised to see it in the auditors’ report.
His testimony is set to continue Thursday.