Muskrat Falls offers numerous advantages, but officials need to be more open and accountable if they want to convince the public of its benefits
Consider this: when completed, the Muskrat Falls project will add 824 megawatts of capacity to the 5,428 megawatt capacity of the present Upper Churchill Falls operation. It is a remarkable fact that our provincial government has already obtained five billion dollars in financing for this project from internationally-known financial consortiums via a 40-year term at a blended interest rate of 3.8 per cent. This financing, arranged by the Government of Newfoundland and Labrador, is to be used only for the Newfoundland government portion of the project since Nova Scotia, through that province’s utility corporation (Emera), is responsible for financing the transmission of electricity to the mainland through Nova Scotia.
Not only have large world financial concerns with world financial experience agreed to provide bond financing over 40 years at an extraordinarily low rate of interest, but teams of lawyers acting for the Government of Canada, for the bond dealers, for the Government of Newfoundland and Labrador, and provincial utility company/ Muskrat Falls developer Nalcor have all approved the arrangements for their various clients. The Government of Canada has guaranteed repayment of this huge bond financing after having it studied by their bureaucrats of finance, the privy council office and resource departments, and being convinced that this project is sound and in the national interest. For Newfoundland and Labrador, this certainly makes the risks involved much easier to undertake.
Yet, doubts and criticisms remain. Why? Because it takes too long and is too hard to get information.
The information I’ve obtained indicates to me that Nalcor CEO Ed Martin and his associates should pass on to the Newfoundland public the full details around the actions they have taken to increase investments in the assets and services they are responsible for. In addition to the electric power generation services they provide, Nalcor has greatly increased spending in recent years to ensure proper maintenance and improvement of their generating and transmission assets, as well as on oil and gas research through spending on seismic activities which has gained a great deal of new information about the province’s oil and gas prospects. I understand that they’ve found that our potential approaches the size of the North Sea reserve!
Much of this information is available to those who have the patience and ability to read complicated financial statements prepared by auditors and accountants, but I suggest that it is time for Nalcor to make this information available in terms that lay men and women can understand, so that they can appreciate what has been accomplished to date.
My past political experience reminds me of when the PC party used the slogan “The time has come” and later, that “The time is now.” I think that the time has come and the time is now for Nalcor and our provincial government to give us the facts about what this increased research spending has revealed, not only about our electrical energy resources but also about the results of Nalcor’s vastly increased seismic investments.
The preparations to complete construction of all the facilities necessary for the proper development of the Muskrat Falls generating resource are under the control of Nalcor, led by president and CEO, Ed Martin. It is very important that they improve on the speed of their responses to anyone interested in full information about the project and particularly that Nalcor responds openly and immediately to criticisms raised by critics. All criticisms or points made by critics should be answered within 48 hours.
I believe, from what information I’ve gained, that Nalcor will, within several years or so, very likely have cash flows from these activities that will enable them to transfer immense revenues to our provincial government for use in governing and improving all provincial government services and activities.
We should not ignore the fact that in 2041, the original agreements between Brinco and the Churchill Falls Corporation with Hydro Quebec will expire. This is only 27 years away. At that time, our huge supply of 5,428 million megawatts of electrical energy will revert to our ownership and control, and cease to be under the control of Quebec. It seems obvious that the planning must start now, both in N.L. and in Quebec, for how this immense change is going to be managed in a way that will not be unduly damaging to either side. Just one example is the effect on the present aluminum industries located in Quebec that are using vast amounts of energy, much of this energy from Newfoundland and Labrador so they are, or certainly will be, very much interested in what is to happen in 2041. Quebec will not be in a position to replace this huge amount of energy by developing replacement energy in that quantity in Quebec itself. The Romaine hydro electrical generation project, now underway in Quebec at a projected cost of $6.5 billion, will, when completed, only produce 1,550 megawatts of power as compared to the 5,428 megawatts of power from Newfoundland they now receive. This will cause a serious supply problem for Quebec. Meanwhile, Newfoundland and Labrador will also have immense problems with finding other markets to sell any electrical energy they no longer wish to sell to Quebec at present prices.
Much work will have to be done for this situation to be resolved peacefully and sensibly and so the plan to resolve this return to competition will have to be reached considerably before the year 2041.
One of the great problems with respect to supply and distribution of hydro-produced energy on the island of Newfoundland is that we are an isolated system, not connected to any other source for energy, neither from Labrador nor the North American continent — unless the Muskrat Falls project is successfully completed. There have been issues raised by critics that are not accurate. One example concerns the energy access agreement entered into with Nova Scotia’s Emera. This agreement makes provision for emergency power to be provided to us by Nova Scotia if it becomes necessary or vice versa.
At the present time, those who are worried about the safety of the 1,100 km transmission line from Muskrat Falls to St. John’s should accept the fact that weather conditions sometimes create trouble for transmission lines, but, of course, this is a fact now with respect to our electrical generation and transmission. The difficulties caused by weather make the energy access agreement with Nova Scotia even more necessary, especially for the island of Newfoundland to be connected, not only to our hydro power resources in Labrador but also to power generation and transmission resources in Nova Scotia and mainland systems. Concerns raised with reference to the subsea transmission line crossing under what some describe as the iceberg-scoured Strait of Belle Isle, should be relieved to hear that this transmission line construction is now well underway and proceeding in a satisfactory manner.
One of the great results of the successful completion of the Muskrat Falls project will be that the island of Newfoundland will no longer be isolated from power resources in Labrador nor isolated from the power resources of the other Maritime provinces and the mainland of Canada and the United States. The fact that it will no longer be an isolated system with the completion of the Muskrat Falls project is certainly a more than ample reason for undertaking this project.
Former premier Kathy Dunderdale, a staunch proponent of the necessity and importance of this Muskrat Falls project, decided to retire recently, having successfully led and supported and promoted and accomplished the operations that will result in this major economic advance for the people of Newfoundland and Labrador. The popularity of leaders and parties ebbs and flows, as all liberal democratic systems show. The premier felt, apparently, it was in the interest of her Conservative party in Newfoundland that she retire at this time but she will be remembered in very positive terms in our history. She certainly will be remembered for the resoluteness with which she carried on this great project, initiated by her predecessor but which she advanced most capably and brought it to its present state of completion. Her support of this great project ensures her high stature in our history and memories, for a difficult job well done with courage and resolve.