the pomp and ceremony yesterday evening, you might have been left with the
impression that Muskrat Falls was sanctioned. I have bad news. Premier Dunderdale has less of a “sanction”
agreement with Emera than she has a “Loan Guarantee” with the Federal
Government. In truth, she has neither!
have been a paragraph of unqualified consent, Emera’s Sanction Agreement runs 29
pages plus a Schedule.
What did we
get last evening? Essentially, a statement that Emera would play along with the
NL Government if it wanted sanction now but
only if NL was prepared to pay a big price AND only if they could still be
permitted to walk away. The sanction
ceremony was a big charade.
Let’s look at
some of the ‘conditions’ of the Sanction Agreement. It includes, in part: quote
costs on the Maritime Link project from NS customers remains subject to
regulatory approval in Nova Scotia. The project partners have committed to
ensure that the Maritime Link is built under the terms of The Sanction
Agreement. These terms include:
a mechanism for dealing with adjustments to rate of ROE
words, “Recovery of costs” on Maritime Link (ML) must be recovered regardless
what the NS UARB decides. The sanction agreement
requires that Nalcor subsidize Emera if the NS UARB sets a “regulated rate” that
is less than that required to support the cost of the ML. Emera wants a “mechanism”
for dealing with “adjustments to rate of ROE” (return on equity). In short, this process is one that removes
any need for the UARB to set a rate high enough to pay for the ML. Why? Because any amount, less than that, will
be subsidized by the NL taxpayer.
following “conditions” are also stipulated in Emera’s Press Release as being
part of the deal. They are not
covered in the Sanctioning Agreement. Therefore, they are covered in a secret
side agreement which they will, no doubt, try to protect under Section 13A of
the Sanction Agreement. Section 13A
is included, by the way, to mop up anything they missed in Bill 29. These are three
more important conditions and Emera brags about them, in its Press Release. Because they are not part of the Sanctioning
Agreement, this is proof that there are
secret Nalcor/Emera Agreements out there…somewhere. These three Conditions of Sanction are:
mechanism for payment on the 80/20 true up
the conditions under which Emera’s investment in the Labrador Island
Transmission Link is assured
cost sharing of the Federal guarantee payment
safe about its investment in the Labrador Island Link? Undoubtedly, Emera’s shareholders are concerned
about their investment if the Federal Loan Guarantee evaporates. But, how much
more does NL have to give away in order to get Emera to join the party?
Emera also put the cost sharing of the “break” fee, contained
in the FLG, back on the table. How much more will that little trick cost us? Emera will
dance with Dunderdale, but only on its terms and at our expense. There’s more…
an equity investment it shall be done by purchasing Shares in Emera “or some
other entity controlled by Emera”.
Scotia. Now, we are going to buy shares
in Emera too. Where is this going?
worth reading because all it says is that Emera agrees, essentially, to talk to
people. Emera agrees to talk with the
credit rating agencies. It agrees to “initiate
discussions” with the Federal Government about the FLG. It agrees to use “commercially reasonable
efforts to complete a System Impact Studies…”. This is fluff, better suited to
an account’s and engineer’s calendar, to get done on time, rather than the
stuff of a final agreement for “sanctioning”.
Nalcor give themselves dispute resolution powers…not their Boards; Ed Martin
need not defer to the Government.
have her ‘Show and Tell’ in the foyer of Confederation Building last night and
even begged His Honor, the Lieutenant Government, to come along to lend it some
shred of credibility, few, having read the so-called Sanction Agreement,
will be impressed with Emera’s commitment to the MF Project or with the negotiating
skills of Nalcor.
Emera’s shareholders may feel better but the people of this
Province should be livid.
going to be a sufficient fig leaf to allow Mr. Harper to hold his nose and say,
yes, this is ‘regional’ even though he knows Emera is really not yet in?
How much more will Nalcor give away to get Emera to spend its