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EDITORIAL: More money for Muskrat Falls

Marshall
Nalcor CEO Stan Marshall discusses the Muskrat Falls project. — Telegram file photo

It’s a story we’re used to hearing: once again, the Muskrat Falls project won’t make its deadlines, and once again, it’s going to cost more.

The price tag is now officially $13.1 billion, which is a far cry from the $7.4 billion the project was supposed to cost when it was officially sanctioned, and an even further cry from the $6.2-billion Decision Gate 3 price tag in 2012 — by which time it was clear nothing would be stopping government’s plans to push ahead with the project.

The number itself is no real surprise; $13.1 billion has been kicking around since July.

But the one-year delay in the project until September 2021 is something else again, because the electrical grid is an interconnected thing (no pun intended) and any delays bring costs not only in increased interest payments, but in things that are not completely under the Muskrat Falls umbrella. Like finding a source of immediate cash, for example.

As Newfoundland and Labrador Hydro warned the province’s Public Utilities Board in a letter Monday, “As a result of the delay in completion of the project, there are payments due on the bonds issued to finance the project, as well as interest payments due of roughly $360 million which would now need to be funded.”

That number might make a special appearance in the provincial budget today.

It’s a story we’re used to hearing: once again, the Muskrat Falls project won’t make its deadlines, and once again, it’s going to cost more.

And not having Muskrat Falls means finding a source of power somewhere else.

Again, in the Monday letter to the PUB, Hydro points out “In light of the update to the Muskrat Falls project schedule included above, Hydro is extending the readiness to operate the Holyrood thermal generating station to March 31, 2023. This is an extension of one year of a previously committed ready to operate schedule. … (There) is a need to retain skilled staff at this facility and to allow for appropriate time to plan for completion of operating maintenance and required capital.”

So, money for labour, money for maintenance and money for fuel. It’s not on Nalcor Energy’s Muskrat Falls tab, because Holyrood’s on Hydro’s budget, but it’s caused by the ongoing delay just the same.

It’s not only in this province, either. Numbers filed with Nova Scotia’s public utilities agency indicate that, in the last three months alone, the delay in receiving power from Muskrat Falls has cost Nova Scotia Power $24.3 million in additional fuel costs.

As well, Nova Scotia Power Maritime Link is charging Nova Scotia Power $144 million to cover operational costs, depreciation and financing costs for the Maritime Link this year, and has applied to charge Nova Scotia Power somewhere between $172.2 million and $150 million next year, depending on when and if Muskrat is completed in 2021. Those costs eventually wend their way through to Nova Scotia electrical ratepayers.

More time, more money.

It’s now all too familiar.

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