Telegram Article: A BIG MAChiavellian Diatribe

Talk about contrasts. The Editor of the Saturday, May 19th
edition of the Telegram must have had that thought when he situated two opinion
pieces on opposing pages containing very opposite views; one, an article by
Brendan Sullivan, a former provincial government economist, called, “Muskrat
Falls: how much are you prepared to pay?” and the other by Cathy Bennett, entitled,
“Making the right decision, a former Nalcor board member speaks out”. 

Sullivan’s item deals with the singular issue of the high
cost of Muskrat Falls power (27.7 – 40.5 cents per KWh compared with 10.4 cents
per KWh, right now), and suggests Nalcor needs to look at an on-island solution.
Bennett’s purpose is to defend Nalcor’s staff. 

Ms. Bennett writes, “I believe the work Nalcor has completed
has an attention to detail and a discipline to best practice management that
has positioned Nalcor as a world class corporation”. 

Ms. Bennett feels it is necessary to defend the professionalism
of Nalcor staff.  Why?  Could it be because someone has exaggerated
their expertise?  The fact is, no one has
ever questioned Nalcor’s passion, professionalism or commitment, to their work
or to their province.  But, some have correctly
pointed out that Nalcor’s former incarnation, Newfoundland Hydro, has not built
a major project since Cat Arm was constructed in the 1980s, which, by the way,
went way over the original estimates. That’s thirty years ago!

Surely Cathy Bennett has not been influenced by the
inaccurate belief, voiced by no less a personage than  Premier Dunderdale on VOCM’s open line show,
that it was the experts at Nalcor who built the Churchill Falls project, rather
than Brinco?  Such a claim is, of course,
a preposterous case of ‘gilding the lily’.

Is it not a legitimate question to enquire how Nalcor is
suddenly replete with the expertise for a project of the size and complexity of
Muskrat Falls?

The engineers inside Nalcor are likely not given to the same
pretense as their Board of Directors or the politicians.  It is the latter to whom the real attention
of the critics is directed. Ms. Bennett seems to suggest Nalcor is making the
decision.  That is not correct. Even if
the provincial government has deferred to Nalcor the obligation of the
‘elected’, it is still the government that is charged with the decision to

Indeed, an overly emotional defense of Nalcor is not what I
would have expected from a Nalcor Director or former Director.  It is to these people that we look for cool
analysis, insight and perspective, an affirmation that they, at least, if not
the politicians, are critical minders of the public interest.  None of these characteristics were evident in
this article.

I was looking for Ms. Bennett to comment on power options, assessment
of risk, cost issues including potential overruns.  I would like to have heard her argument for
why the hoped for new industry, to which she refers, would pay more for Muskrat
Falls power, when it could get cheaper energy elsewhere.  She could have clarified why this $5 billion
project should be constructed in spite of the fact that such new industries have
been neither confirmed nor even announced. 

As a past Nalcor Board member, Ms. Bennett would know that,
regardless of how well Nalcor staff have prepared the Board, people like her
must assess whether a particular recommendation should actually leave the
Boardroom,  in the first place.  When it does appear on the Minister’s desk, in
the end, the professionalism of Nalcor’ staff cannot be blamed for a misguided
decision on the Board’s part, nor should they be chastised, by anyone, for the
bad decisions of politicians who have failed to assess the ‘business risk’ to
the taxpayers of the province.  The role
of business risk, I submit, is solely the responsibility of the politicians.

The critics’ views are grounded in the belief that there are
better options than Muskrat Falls; options which will not expose us to the
rates Sullivan talks about in his article, nor to the serious business risk
associated with a $5 billion dollar investment and cost overruns. 

Ms. Bennett goes on to say: 
“…we will be positioned to access multiple markets for our surplus
energy”.  She does not address how that
is even possible in light of Hydro Quebec’s recent  energy sale to the State of Vermont for 5.8
cents per KWh, a sum, as Sullivan points out, is less than the cost of generation
alone, forgetting the cost of transmission.  

Ms. Bennett says she supports Nalcor’s Energy Plan, that “…it
recognizes the end of our non-renewable resources and planned for that
inevitability by replacing the revenue…from our renewable resources”.    In
fact, the opposite is true. The critics, including this one, have performed
their own analysis and believe that Muskrat Falls, rather than a source of
revenue, will actually be a financial millstone around the necks of the people
of the province; increasingly so, as the oil depletes and demand for power

This article is nothing more than a clever piece of spin

How can Cathy Bennett turn a blind eye to Minister Kennedy’s
assertion that the monthly bill of rate payers will increase by only $15 a
month when the rates are set deliberately low to avoid rate shock and when the
whole regulatory regime is turned on its head to accomplish that purpose?

Is this what Ms. Bennett wishes to tell the public: don’t
ask about SNC Lavalin and about their management fees; don’t look at the fine
print; don’t worry about the fact that rates will be set by a power purchase
agreement on a take or pay basis; don’t worry about the fact that the PUB will
be impotent because Nalcor will be unregulated; don’t worry about the fact that
the cost estimates are based on minimal design work. Just trust in the world
class professionalism of Nalcor and in their inherent integrity.  I suggest we have a right, as citizens, to
expect more analysis and less ‘spin’.

Spin doctoring is a Machiavellian endeavour which may well
serve to ingratiate Ms. Bennett with the current Nalcor Board and the Minister.  But I have to say, this piece is a BIG MAChiavellian
diatribe, if ever I have heard one.

Des Sullivan
Des Sullivan
St. John's, Newfoundland and Labrador, Canada Uncle Gnarley is hosted by Des Sullivan, of St. John's. He is a businessman engaged over three decades in real estate management and development companies and in retail. He is currently a Director of Dorset Investments Limited and Donovan Holdings Limited. During his early career he served as Executive Assistant to Premier's Frank D. Moores (1975-1979) and Brian Peckford (1979-1985). He also served as a Part-Time Board Member on the Canada-Newfoundland Labrador Offshore Petroleum Board (C-NLOPB). Uncle Gnarley appears on the masthead representing serious and unambiguous positions on NL politics and public policy. Uncle Gnarley is a fiscal conservative possessing distinctly liberal values and a non-partisan persusasion. Those values and opinions underlie this writer's views on NL's politics, economy and society. Uncle Gnarley publishes Monday mornings and more often when events warrant.


If a Big Mac costs McDonalds $10 to produce and it is sold for $1.50, McDonalds will go out of business. They would not declare a profit!


Bill left public life shortly after the signing of the Atlantic Accord and became a member of the Court of Appeal until his retirement in 2003. During his time on the court he was involved in a number of successful appeals which overturned wrongful convictions, for which he was recognized by Innocence Canada. Bill had a special place in his heart for the underdog.

Churchill Falls Explainer (Coles Notes version)

If CFLCo is required to maximize its profit, then CFLCo should sell its electricity to the highest bidder(s) on the most advantageous terms available.