GIVE THAT MAN AN OSCAR

Nalcor’s
precursor, Newfoundland Hydro , for many years, was a quiet Crown
Corporation responsibly meeting the Province’s electricity needs. It never tried
the movie business. Management, then, were serious folk, eschewing glamour for
its own sake.

Then, along
came Danny Williams. 

Reportedly,
he had struck it rich in the ’regulated’ world of cable television.  The experience had left him marked with the
magic of guaranteed returns.  On the
public stage, he demanded a script suggesting that such profits could easily be
replicated, by public servants, applying the leverage of taxpayers’ money.  That’s the problem with ‘showbiz’; it’s hard
to distinguish fact from fiction.

In the Government’s
2007 Energy Plan, Williams’ was given such a Script.  It described Newfoundland and Labrador as a
‘vast energy warehouse’
in which
“hydro assets oil, gas, hydro, wind and other energy sources” could be
developed and managed “for the benefit and long term self-reliance of
Newfoundlanders and Labradorians”.  All
could be sold, it boasted, bringing the Province new sources of wealth.

Williams had
found, not just a script writer but an actor, too.  Ed Martin counted no Blockbusters of his own.  He was doing middle level desk work at Petro
Canada. Though he was touted, by the former Premier, it was lost on no one that
he had not reached even the level of a Vice-President. He had never managed a construction project
either, large or small, and that fact, together with a fondness for the big
screen, would remain a deep dark secret. 
Now you understand the real purpose of Bill 29.

But, who
would care?  In the world of ‘showbiz’,
actors need only…well, act!   Ed can
surely do that.  And, even if he can’t,
at least, in the movies, a script writer, good or bad, can always guarantee a happy
ending.
Still, let’s not dwell on the actors; you know how jealous, and
high-strung, Movie Director can be.

Giddy with
the swagger of one deemed so successful, Danny brooked no reviews or criticism.  Adulation would be a singularly acceptable
accompaniment to glamour.  Anyway, his adoring
fans, and there were many, demanded no detail of his energy script, how much it
cost or the risks involved.

Even the
great academician and economist, Dr. Wade Locke, one whose field of study
prepared him well for the deceptive arts, was brought onto the ‘Set’ to give Danny’s
Muskrat project an air of authenticity. 
That bold economic visionary was heard to declare to an august crowd, in
the village of Norman’s Cove, that Muskrat Falls would cease to be economic
once its price tag had exceeded $7 billion. 
When the figure of $7.6 billion was uttered, by Nalcor, he carefully
avoided more prognostication.  Just possibly, that unlikely response was a
throw-back to the silent movie era.  And,
even if it wasn’t, imagine, the audacity of anyone, trying to quantify genius!

More likely,
though, the problem was over-estimation. That’s Gil Bennett’s Department, the ‘cable guy’, at Nalcor.  Gil, no
stranger to the deceptive arts himself, is an old Williams’ buddy and not a bad Actor,
either.  Gil knows, better than most,
that the camera always magnifies the smallest of deficits.

Ah! The
Williams’ years were heady days in the politics of Newfoundland and
Labrador.   That he had given Nalcor and
Ed Martin a sizeable mandate seems clear. 
Certainly they were emboldened by Williams’ own Directing talents, especially
the histrionics which ascended to a level Peckford could never master.  Williams boasted style, too, and a sense of destiny.  For the latter, it seems, normal market
forces could easily be suspended in fulfillment of his legacy.

Likely, only
a person impervious to risk, or one all too aware he was risking someone else’s
money, would embrace such a naïve plan of economic development. Of course, such
scepticism might easily be misinterpreted. 
Who, but a well worm sceptic, would want to apply ‘generally accepted
accounting principles’ to a vision noble enough to escape the uncertainty of independent
scrutiny?

Still, the
odd few, lacking the juvenile faith of the Tory Cabinet, might have found an
early clue, not just to the magnitude of the ‘dream’ but to the size of the
egos involved, merely by parsing Nalcor’s ‘Vision Statement’.   

Two other
such visions lend perspective, to the pedestrian mind, and serve to remind us
that you have to be careful when you are trying to figure out the ‘real thing’.

Cola Cola,
for example, emblematic more of taste than smell, includes something quite
related to what it does.  It seeks to
“Bring to the world a portfolio of quality beverage brands”.  MacDonald’s, the hamburger chain, boasts a
vision “to be the world’s best quick service restaurant experience” and hence, is
forever troubled by the question: “Where’s the beef?”

Little
wonder, Kathy Bennett looks to politics for the promise of even more aroma.

What does
Nalcor’s vision embrace?  In contrast to
either Coke or MacDonald’s, Nalcor’s “Vision Statement” makes no pretense that
it has been handed a mission far larger than even the wide berth of
energy.  

“Our vision”,
Nalcor states, “is to build a strong economic future for successive generations
of Newfoundlanders and Labradorians.”

This is
heady stuff! It is easy to see why Ed Martin is a serious Actor; afterall, he
carries on his shoulders the leviathan expectations of Danny Williams.

In another
time, Smallwood invited a Latvian to write him a similar script.  NL was poor then and Alfred Valdmanis had to
be content handing out subsidies, for small shoe and battery factories, to his
Latvian and German buddies.  When that
plan failed, and Valdmanis was put in jail, Smallwood graduated to something
bigger; he embraced companies, like ERCO and pseudo-magnates like John Shaheen
and John C. Doyle, too. 

Learning
from Smallwood, Danny demanded a bolder script. 
Risk to the public purse, of course, was always a given.  Williams wanted something even more than the
impossible; he sought fairy tales and enchantment.  Let’s give away the ‘surplus’ electricity, virtually for free!  Don’t express surprise.  That’s just the magic of the big screen.

You have to
give Ed Martin credit.  He gets to shoot
his movie at tax payers’ expense and secures a ‘take or pay’ contract that will
cover distribution, too. Nalcor gets money from the Government and claims a
return on equity, without as much as an allusion, in the Credits, to the fact that
it’s the public who, for decades, will have to pay the interest. 
Give that man an Oscar!

We’ll blame Williams
when Muskrat fails.  But, Ed Martin and
Kathy Dunderdale ought to have known that, like Smallwood, Danny liked to
improvise.  Stepping off the stage, when
he did, he might have expected such a foolish Script thrown on the fire, the Set taken
down.

How could he
have known that the prima donna who replaced him would have no Script of her
own? Or that, without new lines, no one would be taking calls from the shining Star,
at Nalcor. The old lines would have to do. Always count on the element of
surprise, especially in tinsel town! 

Don’t expect
Danny to take the hit for Muskrat.  For
him, you see, unlike Dunderdale and Martin, Muskrat Falls was always ‘showbiz’.   
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.

NALCOR (Masquerading as ‘Hydro’)LIVES IN AN UPSIDE DOWN WORLD

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!

REMEMBERING BILL MARSHALL

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.

4 COMMENTS

  1. In the Government's 2007 Energy Plan, Williams’ was given such a Script.

    Passive voice alert.

    "Was given", by whom? I am not sure I agree with the characterization of Glorious Leader (May His Preternaturally Thick Hair Always Be Perfectly Parted) as a passive figure in this enterprise.

  2. What a wonderfully written piece and showing great insight. As a past employee, an engineer with Nfld Hydro, I remember that time when our work was a job. I knew no actors. The guys who forecast power needs had a job to do, and their forecasts always had an element of speculation, which set their analysis apart from that of the hard, reliable science. So there was generally a cautious approach on spending on new expensive generation and transmission assets. Now, caution is not a factor. And best practises for forecasting has never been adopted by the local power companies. The Manitoba Hydro report confirmed that. But nobody considers that important. These details don't matter to the Actors, but is one of many flaws that may prove fatal.
    Des, that you compare this Muskrat scheme with Joey's follies seems appropriate. I love your writing style and would nominate you for a Ray Guy Award for this piece. No such thing as Ray Guy Award, I know,… but there should be one. Lets start one!!!! Anyone besides me who things this is a good idea? If so, send me an email to engineeringspecialties@hotmail.com I would like to know the interest in this, seriously. Winston Adams

  3. Ed Martin's job as the CEO of the Energy Corporation is to challenge the planned developments. He is the gate keeper. He is supposed to manage risk. However, in the delivery of his legislative obligations he has forgotten the tremendous risk this project has placed on the taxpayers of this province. To be clear in any real industry, in any real company, this project would not have passed the first decision gate, let alone sanction. The project will deliver power at a cost twice what they can presently sell it for. This should have been a full stop on this project. Instead, the plot was written that it was the cheapest source of power over 50 years. This is despite we will get 5 Times what we use now, in a mere 25 years, at effectively no cost.