It can be expensive to cut off your nose to spite your face.
As much as $12.7 billion, plus decades and decades of interest payments.
Wednesday, former premier Kathy Dunderdale told the Muskrat Falls inquiry that even if cheaper power had been available from Quebec, her government would not have taken it.
“I personally would have had the greatest difficulty — as would others in our government — in putting all of our reliability on Hydro-Québec to provide service to the people of the province under any circumstance given some of their actions. Completely outside of anything to do with the Upper Churchill,” she told the inquiry.
Dunderdale did not spell out what those “actions” were, nor did she explain why she felt that an experienced, major utility company which has successfully sold electricity under long-term contracts into many jurisdictions would sully its reputation by somehow plotting to offer up a substandard or unreliable service here.
Muskrat Falls, from its very announcement by then-premier Danny Williams, was all about sticking a finger in Quebec’s eye.
That echoes comments from earlier in the inquiry: questioned about buying power from Hydro-Québec, Nalcor vice-president Gilbert Bennett said Nalcor didn’t even approach the Quebec utility about selling power, adding that he assumed that if Hydro-Québec had surplus power, they’d get in touch.
At the same time, it was very clear that buying power was not examined seriously due to political optics.
Muskrat Falls, from its very announcement by then-premier Danny Williams, was all about sticking a finger in Quebec’s eye.
Here’s the very first quote from Williams in the news release announcing the project in 2010: “This is a day of great historic significance to Newfoundland and Labrador as we move forward with development of the Lower Churchill project, on our own terms and free of the geographic stranglehold of Quebec which has for too long determined the fate of the most attractive clean energy project in North America.”
Think about that: we’re trying to find a low-cost supply of power, building a major project, and the first quote for some reason has to have a slap at a province that wasn’t even part of the project.
That obvious and calculated antipathy may have played well at the time.
But it will cost us well into the future.
The option buying power from Quebec might have been unpalatable, particularly because vilifying that province was a tried-and-true political strategy for the government of the day.
Buying power, even as a stopgap until the Upper Churchill contract ends in 2041, would have meant paying a political price.
Imagine how hard that would have been for a government busily wrapping itself in claims about new-found provincial pride.
Instead, we’ll all get to pay a much higher price for electricity than we might have had to.
Why hold your nose and save the money, when you can cut it off and pay the price for a generation instead?
