(Author’s Note: After a fortuitous encounter with the anonymous, but very real “JM”, the person whose 175 page Submission to the PUB on the Muskrat Falls was frequently referenced in that Agency’s Final Report, the author and JM have agreed to write a three part Series dealing with certain critical issues pertaining to the Muskrat Falls project. Part 3 will disclose new issues regarding Muskrat which new research by “JM” has uncovered.  Today’s Post is written by this Author; Parts 2 and 3 will be composed by “JM”. Part 2 will be posted on Wednesday, September 26, 2012 and Part 3, a couple of days later .  While Uncle Gnarley is a fictional character, the issues dealt with in this Series, and in earlier Articles by the author, are real).

“Now, Nav”, Gnarley continued, “who would have
undertaken such a demanding project? Who would have made such a commitment
knowing that he could neither benefit financially nor on an academic
level?  After weeks of difficult
research, the decision to sign off on the work, under the anonymous
“JM”, had to be tough.  Whoever
JM is, Nav, I believe he left the signature of a real academic; a person in
pursuit of the truth rather than any reward, not even

That was
Uncle Gnarley, in July, long after having read “JM’s” 175 page
anonymous Submission to the PUB on the Muskrat Falls project.  That Agency had relied upon JM’s Brief to
help it with its analysis, frequently quoting him in the Final Report. 

Now, Uncle
Gnarley was sitting in my SUV, fidgeting and exhibiting his characteristic
impatience as he waited to be driven to meet the same JM, the heretofore ‘anonymous’
expert on Muskrat Falls.  Impatient may
not be the best word to described Uncle Gnarley’s demeanor; he wore an aspect
that suggested ‘agitation’; some ‘dilemma’ was clearly causing him conflict
and, on this occasion, I was not invited to assist with a resolution.  I wondered if it involved JM or if there was some
other matter causing him distress.

invitation had popped into my “Inbox”; not only had JM written a new Paper on
Muskrat, entitled, Upper Churchill: The Unexplored Alternative, to which, I
knew, Uncle Gnarley would want to give thoughtful consideration; it was
accompanied by a request from JM to meet Uncle Gnarley face-to-face.

 JM’s new Paper clearly was intended to
encourage greater public understanding of the Muskrat project, its pitfalls and
the false assumptions Nalcor had devised; it proposed an alternative course to
the Government for the purpose of ratcheting down at least some of the risk and
the high cost of Muskrat Falls.  

Last time he
and I talked, Uncle Gnarley had given a lengthy oration on Muskrat Falls, which
had put him squarely in the camp of JM.  He
had called it, Muskrat Falls: A Modest Proposal. 

Like JM, Uncle
Gnarley had gone so far as to propose that the Muskrat Generation facility be postponed,
at least for now, in favour of purchasing additional power from Hydro Quebec.  That additional power, together with the
unused 80MWs of recall power, would satisfy the on-island demand Nalcor deemed
necessary for the purpose of replacing the Holyrood Generating station. 

It would
constitute cheaper power, too, because Hydro Quebec was now signing contracts
with U.S. customers at the rate of 5-6 cents per KWh, rates that seemed in
inexorable decline as a consequence of a new paradigm shift in consumption and
conservation patterns emerging in the U.S. power market. Muskrat Falls power
was estimated by Nalcor to cost 21.4 cents per KWh and that was before the 37%
increase in project costs now making official rounds. 
Uncle Gnarley
was uncomfortable with his ‘modest’ proposal, though he did finally give it
support.  He preferred the energy mix and the controlled roll-out of the ‘isolated
island’ option, as demand was proven.  The concept involved a number of different on-island components,
like wind, small hydro project and renewal of Holyrood. 
The problem he was having had to do with
basic economics; he felt that the transmission line offered inadequate ‘economies
of scale’, given its cost, but that it would make sense if it was built to
transmit a much larger block of Upper Churchill power.  Uncle Gnarley recognized that both JM’s plan
and his ’modest proposal’ involved Hydro Quebec and that it held certain face-saving
characteristics for the Dunderdale government. 

was pleased that JM trusted him, not just for his considered analysis but for the

that his anonymity would be safe.

As the car
drove up to the lawyer’s office, where a well-known Solicitor had agreed to
play host to the two men, Gnarley seemed in deep thought as to how he would
address JM, what his opening comments would be, and how they would get on.

minutes Gnarley was seated in an anteroom and just as quickly, a stiff looking
solicitor escorted us both to the Boardroom where JM was already present.

The lone
figure in the room was a handsome, fit and clearly gifted, professional businessman.  JM quickly rose from his seat and, with a
broad smile, identified himself to Gnarley. 
I had not seen him look so pleased since I had given him a bottle of his
favourite Scotch as a birthday gift, well before the Muskrat Falls issue has
raised its ugly head. 

I could
sense his delight.  The handshake was
firm, the look of mutual respect spoke of two men who not only shared a genuine
fear that the current crop of politicians had put the province in financial
jeopardy over a small block of electric power; they were ‘cheek to jowl’, as John
Crosbie would say, in the shared belief that the Muskrat Falls project, at
least in its current form, had to be stopped.

The pair
brought back thoughts I had, many years earlier, of Brian Peckford meeting Wayne
Gretzky; both men shared a limo that organizers had arranged, as they headed to
the same Awards ceremony as recipients. The spirit, energy and enthusiasm, which
each evinced was nothing short of monumental even if those passions went in
different directions. Uncle Gnarley and JM also shared a deep passion; saving
NL from its politicians.

Said Uncle
Gnarley to JM: “I admire your work on Muskrat Falls; it is a gift to your
fellow Newfoundlanders and Labradorians. 
I believe that you are a true patriot”. JM seemed to want to return the
compliment, but Uncle Gnarley was already in stride, giving JM no chance to

“JM”, Uncle
Gnarley addressed the young man solemnly, as if he had been born to the
appellation, ”I have a great fear that in our determination to stop what, by
any measure, is a disastrous project for NL, we have become willing parties to
something that is fundamentally wrong. 

“In making
the proposal that NL purchase additional recall power from HQ and proceed with
an extremely expensive transmission link to the island, all we have done is provided
the government a chance to save face.  The
idea would likely lower the risk and lower the cost; but it only means that tax payers will be screwed less than they will be if the full project goes ahead.

“Nalcor has
already squandered half a billion dollars on Muskrat Falls under the cover of a
government that ostensibly has not sanctioned it, and who continues to assert that
no sanction will be given until the issue is debated in the House of Assembly
though, as everyone knows, construction has already begun. 

“To say to
Dunderdale: ‘it is fine to proceed with the transmission line to the Island and
to waste one-half the excessive cost of Muskrat power, as long as you don’t
waste “twice” as much, is a position I now find unacceptable.  The position holds no truth.  It rewards bad decision making.  It advances the undermining of democratic
government.  It gives arrogance and
arbitrary behaviour a seat for which there must never be room. It suggests government’s
have no need of courage to pull back from bad decisions; it promotes the worst kind
of politics.    

careful thought, I have come to the conclusion, that this government has to be
forced, if necessary, to go back to first principles”, continued Uncle
Gnarley.  “It has to have an open
discussion of the demand figures on which Muskrat Falls is predicated, it has
to complete a proper end use analysis of our power needs, as MHI has suggested;
It has to come clean about the limitations of Muskrat Falls to produce
sufficient power in the Winter months when this ‘run of river’ project will
produce the least amount of power, it has to disclose the short comings of the
Water Management Agreement, it has to reveal that Emera has made no commitment,
it has to tell people the true cost of Muskrat Falls power and a whole lot

And the government must begin this
process by behaving evenly with the citizens, the voters, to whom it owes
honesty and transparency.

“I just
don’t think it is our job to find a way to let Dunderdale, Marshall and Kennedy
off the hook; it is they who have conspired to squander the Province’s limited
financial resources.

“Many people
feel a sense of invincibility now; they believe in the illusion that the oil
contained in our few wells will never run out, that it will always be there to finance
bad decisions. 

they have to learn the hard way.  So be
it.  I am not so much into saving people
or politicians from themselves, as I am about preserving the fundamentals of
our democratic process, of uncovering untruths especially when vested interests
are at play”, Gnarley continued his rant. “People need information, they need
transparency and honesty in order to make good decisions; if they then make the
wrong choice, at least they will have shared in it. That is not now the case;
the Government has no intention of engaging the public on this decision.

“JM, we have
to battle Dunderdale and co. to the end. 
As fearful as I feel, I will compromise no longer with the bastards!”

On that
note, Uncle Gnarley arose and nodded in my direction.

JM arose
too, but only to better access something concealed inside his briefcase.  The bottle had a familiar label; instantly I
knew JM was not just a smart businessman, he was a diplomat, too. JM looked
directly at the older man and whispered, in the language of the Highlands:  “Uncle Gnarley, I understand you occasionally
take a ‘wee dram’”.  It wasn’t so much a
question as a statement of incontrovertible fact.  In honor of this meeting, perhaps we can both
christen this recent arrival, as he raised the bottle of Balvenie. 

It was his
favourite scotch. A beaming Uncle Gnarley replied: “Nav”, nodding in my
direction, “tells me you are a ‘rum and coke’ fellow”.  Replied JM, “that’s true.  But, not today! Scotch, as good as this, we
can all enjoy, can’t we Nav”, as he offered glasses for me and the lawyer,

“Of course”,
JM added, without as much as a pause: “everything has its price”.  Now, Uncle Gnarley, you must hear what I have
to say.



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.


This is the most important set of negotiations we have engaged in since the Atlantic Accord and Hibernia. Despite being a small jurisdiction we proved to be smart and nimble enough to negotiate good deals on both. They have stood the test of time and have resulted in billions of dollars in royalties and created an industry which represents over a quarter of our economy. Will we prove to be smart and nimble enough to do the same with the Upper Churchill?


  1. Great read…thanks!

    It is troubling that the local discussion about Quebec and the potential hydro opportunities and synergies…. is non existent.

    I am convinced that we can still get under the covers and dance along with HQ while sipping on a Laphroaig….this calls for something with peat!!

    The better deal to reach the "green of the week" while eliminating Holyrood…. could be achieved by dealing with Quebec. The thought of even going down that road would essentially bring the world wide TWITTER server to its knees….a real shame!

  2. "Back to first principles,–open discussion of the demand figures,–complete a proper end use analysis of our power needs, as MHI suggested" These are key points. 99 percent of the discussion and analysis and the planned expenditures goes to the issue of which type of new power source is to be constructed, when this is all dependant on the "assumption" that this large power source is needed to meet our island demand. Island demand is primarily for electric space heat and hot water. Residential and small business is almost 75 percent of our total load.And these loads are very suitable for reduction of 50 percent in demand and 60 percent in energy use with efficient heating which is very cost effective. A good staged program can more than offset the normal load growth with efficiency reductions, and thereby also reduce Holyrood oil use. The potential is 600 MW reduction , with 400 MW practical. Some consider this priority as alternative to MF: small hydro, wind , conservation. I submit it should be : energy efficiency, small hydro, wind. End use analysis would prove this. Nfld Hydro and Nalcor don't intend to use this best method (end-use) approach. They consider there is uncertainity with this approach. So why are so many other utitities using this method with great success? There is little uncertainity as to the technology achieving the results noted above. My submission to the PUB on efficiency gives the arithemic. The cost to convert all houses in Nfld to eficient heating is about 1.6 billion dollars. About 300 million to convert to efficient hot water. And of course about 40 percent reduction on household energy bills from reduction in energy use. I would like to see if someone will discredit my arithemic here. Winston Adams