Why did the Dwight Ball government wait until now to announce that it will commence negotiations with the federal government to transition the Muskrat Falls/transmission assets away from Nalcor’s escalating supply price power purchase agreement (PPA) to a traditional cost of service financing model?
My Feb. 28, 2012 written submission to the Public Utilities Board’s Muskrat Falls 2 option least-cost review — yes, February 2012 (eight years ago) and well before project sanction — stated in part that :
“...To consider and appropriately ‘evaluate’ Nalcor’s escalating supply price system planning assumption, Nalcor’s assumption must be compared to a year-by-year breakdown of costs over the entire 57-year (or 50-year, as appropriate) assessment period calculated using the utility industry’s cost of service standard — an approach or assumption other than (and different from) Nalcor’s escalating supply price assumption.
Only by providing an appropriately clear, accurate and thorough 57-year (or 50-year, as appropriate) year-over-year statement of costs using a cost of service methodology can the board (and the public) ‘consider and evaluate’ the full extent to which Nalcor’s escalating supply price system planning assumption might, or might not, be as Nalcor claims, the best (the most ‘appropriate’) assumption for the Muskrat Falls option and CPW cost comparison calculations.
“It is respectfully submitted therefore that:
“• the board require Nalcor to apply a cost of service assumption/methodology to its analyses of both options and provide both the board and the public a clear, accurate and thorough year-over-year breakdown of costs (including graphs) over the entire 57-year (or 50-year, as appropriate) reference question time period,
“• the board and the public be provided an appropriate opportunity to review the cost of service data and analyses, to make presentations and/or to provide comments, and that the board defer submitting a final report to government until receipt, consideration and evaluation of the application, impact and merit of this alternative cost of service system planning assumption is completed and compared against Nalcor’s escalating supply price assumption...”
So why, in 2012, did the PUB not conduct such an analysis? Why did the previous Progressive Conservative government not conduct such an analysis prior to or even after project sanction? And why did the Ball government wait five years (until its recent announcement) to initiate negotiations with the federal government to do what should have been done well before project sanction?
Perhaps Dwight Ball’s recent announcement of the start of negotiations with Ottawa of a Muskrat Falls rate mitigation solution was not what it seemed to be.
His words were: “I am pleased today...to announce... a restructuring of the financing of the Lower Churchill projects (plural) to help ensure that they are financially sustainable …”.
Maybe this was not merely a Muskrat Falls rate-mitigation announcement.
Perhaps, in the guise of a rate-mitigation solution, it was the first public announcement of the start of negotiations with the federal government (and no doubt, Quebec) on proceeding with and tying Gull Island hydro development into the already existing Muskrat Falls fiasco.
The Danny/Dunderdale team gave us a blue boondoggle.
The Ball/Coady team could give us a red one.
Are we, once again, “selling the shop” — short-term gain for long-term pain?
PC or Liberal? Same difference.
Maurice E. Adams,
- LETTER: Is Newfoundland and Labrador a ward of the state again?
- More details needed on rate mitigation agreement: Moody's
- VIDEO: Federal and provincial governments to reopen Muskrat Falls finances
- Hundreds of millions of dollars needed for Newfoundland and Labrador electricity rate mitigation: report