It’s trite to say it’s a glass-half-empty, glass-half-full kind of thing.
But the description is strangely apt — if so much money wasn’t depending on the glass finally getting filled.
Every three months, Liberty Consulting files a report with the province’s Public Utilities Board on the ongoing delays at the Muskrat Falls project. Their ninth report came out this past week, and the tone is familiar: Nalcor Energy and Newfoundland and Labrador Hydro management is upbeat about things moving forward, and Liberty is concerned that deadlines have slipped and milestones have not been met.
So far, Nalcor’s optimistic take has always been wrong, and Liberty’s pessimism has been proven right every time.
The ninth report is no different — and Liberty isn’t sugarcoating it.
“We found that the most recent past quarter continues the now long-sustained pattern of disappointment across a broad range of fronts in the transition to operations of the Lower Churchill Project,” the report begins.
That disappointment is about delays; the construction of the dam and generating station in Labrador may have brought the first delays, but now, the critical problem is with the Labrador-Island Link (LIL).
In the end, time is money. Every second that the project isn’t generating, transmitting and selling electricity, interest is piling up, increasing the project’s overall cost.
The LIL is supposed to bring Muskrat Falls power to the Avalon. Right now, several parts of the line don’t work . There are problems, for example, with three units called synchronous condensers, which essentially smooth out sudden drops in power supply so the whole system doesn’t crash. Without them, the line can’t carry the amount of power it’s supposed to.
But a bigger problem is with the software that’s supposed to control power delivery and safeguard and protect the powerline system, something that’s been under development by GE Grid Solutions for years.
Liberty isn’t sugarcoating it.
“The interim bipole software version underwent Factory System Testing, which included 994 separate tests. With all tests been performed, only 581 tests (about 60 per cent) passed. Work to remedy the causes of these many failures remains in progress. General Electric has proposed release of the software for Factory Acceptance Testing before clearing all of the underlying issues. Management has not agreed to date, but may consider this approach after General Electric offers more information about the potential impact on the transmission system and customer reliability of any remaining known issues.”
In other words, even though the software hasn’t passed its simulation testing at the plant yet, GE Grid Solutions wants to run it on the LIL.
To keep the delays in context, remember that, whatever else was happening elsewhere in the Muskrat Falls project, the original plan was to have the LIL in operation in 2017.
And how does Liberty feel about Nalcor’s glass-half-full approach?
“Across our two years of quarterly monitoring, management has continued to express optimism about improved General Electric performance. We do not find objective measures that improvement has happened,” the consultants write.
“Historical performance, the continuing emergence of new issues, continuing reports of General Electric resource availability issues, and schedules that continue to extend by large degrees so late in the project all command doubt, not confidence, in management’s expectations,” Liberty says. “For a number of quarters now, the scheduled time remaining until LIL operation has not changed, despite management’s efforts to secure its completion. Despite these efforts, each quarter seems to show completion scheduled roughly the same number of months away.”
Liberty has advised the PUB that, in its opinion, it’s likely the LIL will not be ready to supply power for next winter, and that Hydro should now prepare a detailed “plan and schedule detailing all activities required to ensure winter 2020/2021 service reliability under the assumption that the LIL will not be available during some or all of that period.”
The PUB’s certainly taking Liberty’s concerns very seriously — on Thursday, the board ordered Hydro to provide the board with details about what it will do to ensure reliable power if the LIL is not available until June 2022.
That’s not a typo — June 2022.
I’ve said it before and I have a feeling I’ll be saying it again — Liberty’s been right every time.
Russell Wangersky’s column appears in SaltWire publications across Atlantic Canada. He can be reached at [email protected] — Twitter: @wangersky