The provincial government has released the Board of Commissioners of Public Utilities' (PUB) report on its review of the proposed Muskrat Falls development. The board was to assess if the development is preferable to an isolated island power option.
The report calls for further information.
The board concludes the information provided by Nalcor in the review is not detailed, complete or current enough to determine whether the interconnected option (including the development of Muskrat Falls) represents the leastcost option for the supply of power to island interconnected customers over the period of 2011-2067, as compared to the isolated island option, it states.
Its release by the PUB had provincial politicians in a flurry Monday, yet Nalcor Energy CEO Ed Martin expressed no discomfort with the PUB's statements when speaking with The Telegram.
I think the critical pieces for me what we're trying to do here from all of these reports, we're trying to gain whatever benefits we can from the input. So I sort of look through it with an eye of what's in there that can be helpful?
There's some things that are helpful there, Martin said.
The PUB's report did not state the board was refusing to choose a power option (isolated island or interconnected) because all alternatives had not been properly explored. The board, in fact, was not asked to consider potential alternatives or Nalcor Energy's consideration thereof and, as a result, it did not pursue information on alternatives outside of the two options before it.
The board was also instructed not to consider anything related to the sale of excess power produced by the Muskrat Falls project. It was not to consider the proposed Maritime link, to potentially connect this province's power system with that of Nova Scotia.
The PUB said these restrictions caused problems in assessing the options, both in terms of cost and technical aspect.
The Maritime link was referenced during the board's review in the context of the reliability of the island's power system, system standards and overall cost. The board noted at times information regarding the link was offered by Nalcor representatives and, at other times, it fell victim to the review's terms of reference.
The PUB also questioned why it was working from dated numbers. For example, it used a load forecast from 2010, when it was told a forecast for 2011 was not going to be made available.
The board stated it felt limited information was available on the province's industrial customers, calling Nalcor's responses on the subject inadequate.
Ultimately, the sticking point in answering whether the development of Muskrat Falls was the leastcost option for supplying the province with reliable power was apparently the fact the board's decision was to be based on information from Decision Gate 2 in November 2010 the point at which Nalcor first decided to move ahead with an independent review of its project plans.
The PUB indicated the numbers now being prepared by Nalcor more current, precise numbers for a go or no decision on the project would better serve the type of review it was asked to conduct.
The board's report was initially to be filed by Dec. 31, 2011. The date was pushed to March 31, 2011, due to delays in submissions on the part of Nalcor.
An extension was requested, but denied by the provincial government.
Members of the PUB have so far refused to comment on their final product.
Meanwhile, Martin said he has no objection to another review being conducted, as the Dunderdale administration has publicly stated will happen. This time, the review is to be conducted by Manitoba Hydro International, with the go or no numbers.
It's a good thing, to have the final review, and we would have found a way to do that one way or another, Martin said.
He said the Crown corporation will now have to work towards providing the information needed.
A lot of the things have been accomplished and, you know, I talk about some of the most important things we've done, such as the final Innu arrangements, the environmental assessment work, we have the majority of the engineering that we want to have done completed and we're into a re-costing exercise now, which is taking a little time, but we should be ready. We also are in the process of finalizing our financing strategy and working with the federal government and concluding the Emera agreement, he said.
All that work's going well and it's converging at a reasonable rate. So once again, I won't give a date, but it's coming together.
Nalcor will pay the cost of the next review. The PUB's review will be a $2-million expenditure on Nalcor's books.
The PUB report notes Nalcor spent $82.8 million feeding the assessment of the province's power options in relation to the Lower Churchill from November 2010 to Dec. 31, 2011. Nalcor forecasted an additional $12-15 million to be spent per month from January 2012.
It was also noted the value of all contracts and work packages prepared by Nalcor to date, since November 2010, to be in excess of $900 million.
