The buzz at last week’s Pre-Conference
Hearing was the sudden change of attitude
exhibited by the Fortis Inc. subsidiary, Newfoundland Power (NP).

The Company filed an Intervener Submission to
the PUB which is investigating Black-Out 2014.   Its fifth question was loaded.  It was brief; but it was a bomb-shell.  It asked: 

                 5. What measures are required to ensure
reliability and security of power supply to
         customers on the Island
Interconnected System, including Newfoundland Power
                     and its customers, after
the Labrador in-feed and Maritime link become
                     operational? (Emphasis

 What had Newfoundland Power implied?  It lacked faith in Nalcor’s power generation
strategy. It doubted its ability “to ensure reliability and security of power…”
after Muskrat Falls is completed.

The Company had broken ranks with Nalcor.  It was a watershed moment. What may have been
imperceptible to many represented a seismic shift in the Newfoundland
centered universe, at least as far as Muskrat Falls is concerned.  

Ian Kelly, Newfoundland Power’s Legal Counsel,
summed up the Company’s position this way:

“We want to make it clear Newfoundland Power is not questioning
the decisions to develop Muskrat Falls or to build the Maritime Link … those
decisions have been made.

“What the board should examine is how reliability and security of
supply will be assured after the commissioning of Muskrat Falls and after the
decommissioning of Holyrood.”

Am I reading Ian Kelly’s words
accurately?  What did he say, again?  ”…those
decisions have been made”
.  In other
words, we at Newfoundland Power did not necessarily agree with them but you,
Nalcor, have sealed your own fate; those were your decisions!

It is well-known that Fortis Chairman and CEO
Stan Marshall would not go near the Muskrat Falls Project ‘with a barge pole’.

Fortis might have wanted to make its views public
a long time ago; after all, most residents of the Island are Newfoundland Power

But, in a politically charged environment
like Newfoundland and Labrador’s, such frankness even if uttered in the public
interest would have earned the Company a corporate bloody nose from the more czarist
of Government politicians, especially Danny Williams and Kathy Dunderdale. 

Fortis stayed mute; one of the few fully qualified
groups, boasting intellectual, technical and financial heft, didn’t as much as
file a single word with the PUB on the Muskrat Falls Application.  It was an enormous display of cowardice.

The power ‘black outs’ of early January shook
the political and commercial foundations of the Province.  There was no good way to ‘spin’ it, though
for a short time the Premier and at least one VOCM Open Line Host tried to
claim all would be fine when Muskrat comes on stream.  How could a group incapable of getting its
summer maintenance program completed by mid-winter retain a shred of
credibility for a Project enshrouded in secrecy?  

The ‘black outs’ constituted a political and
commercial debacle; they shredded the tattered remains of the Dunderdale
Premiership and ruined a long record of confidence in the security and
reliability of our power system.

I drove across the City late on the night of
the explosion in Hydro’s Holyrood switching yard.  A friend had asked me to help him retrieve
some Jerry cans. Fuel was in short supply for his generator.

I stopped, just for a moment or two, above
the Avalon Mall, on Thorburn Road.  I was
able to see much of St. John’s and Mount Pearl in virtual darkness.  The sense of isolation, of desperation, of
the entire Metro Region was palpable. 

A chill ran down my spine as I pondered the
possibility that the outages might go on for many more weeks.  How would people manage? What would such a massive
disruption do to our economy?  The
questions were imprinted on the dark sky, on the blackened street lights, and in
the clouds of cold snow that blew like white dust over the windshield. 

The Open Line Shows ran back-to-back; most
callers used the corporate names, Nalcor and Newfoundland Power, interchangeably.  People made no effort to differentiate which corporate
entity was responsible for the mess.  They
were frightened.  They had a right to be.

But, I suspect, few were as frightened as the senior people at Fortis and Newfoundland Power. 
Yes, they were only the ‘distributer’; the
company responsible for making sure that the ‘juice’ delivered to them by
Nalcor arrived at homes and businesses safely and without interruption.  How could they be held responsible, if Nalcor
failed to manage the generation system? Who could argue with such a proposition?

But, would those arguments withstand scrutiny
if the Labrador Island Link (LIL) collapsed following a winter’s sleet storm in
2018, a mere four years from now?  What about the myriad other reasons Muskrat could come up short? 

Fortis be so easily let off the hook having failed to break its silence?  Was it not a knowledgeable witness to the
conception, design and construction of Muskrat Falls? Where would it find an
ounce of credibility having deferred to people like Williams and Dunderdale, to
secrecy and deception?  

In this light, one begins to see why Fortis
had no choice but break ranks with Nalcor.  

No Corporation is insulated from its
community of interest; even in the real world of business, corporate
responsibility is not just about legal definitions or mere philosophical notions
of accountability.  Sometimes the public
interest simply cannot be disentangled from corporate self-interest. This was
one of those moments. 

Little wonder Fortis
executives had second thoughts.

silence would have constituted a relationship bordering on complicity. 

Fortis had to
disassociate itself from Nalcor.  Its
subsidiary, Newfoundland Power, could not survive another calamity like Black-Out
2014 (or worse).  The Company had to find a way to off-load its burden.  The PUB offered the perfect opportunity.  If the Agency failed to take the cue, Fortis could always take credit for trying.

That proposition may be moot, but one thing is certain, the option of Fortis’ continued
silence evaporated in those cold, dark nights of early January.

In contrast, Nalcor (the Crown Corporation
ostensibly owned by the people of the Province) and its subsidiary,
Newfoundland Hydro, do not see it that way. 
Even against the back drop of power outages in which seniors were herded
into ‘warming’ centers, where residents with no secondary heat source suffered
personal discomfort, damage to water pipes and property, against business
closures and industrial shutdowns like Corner Brook Paper and the Come By
Chance Refinery, against all the expense and suffering, what did Nalcor say to
the PUB?

It demanded secrecy again, just as it has always counted on the former Premier and the current one to guarantee. 

Lawyer, David MacDougall spoke to the PUB on
behalf of Nalcor’s Newfoundland and Labrador Hydro:

“With respect
to the fifth (issue) proposed by Newfoundland Power, regarding the potential
review of measures to ensure reliability after commissioning of Muskrat Falls
and the Labrador-Island Link, we believe that matter is beyond the
appropriate scope of this review”.
(Emphasis added).

Meanwhile, Premier
Tom Marshall, having promised that his Administration will be different, maintained
his silence.  The re-set button is as corroded as it ever

A lax media
forgets to ask the new ‘Marshall’ if he still supports Nalcor’s style of governance; they fail to ask if
he will intervene, not with the PUB but with Ed Martin, to remind him that the
damage done to democratic government must end.

The media might
get around to that sometime.

Meanwhile, Fortis and Newfoundland
Power have had an epiphany.

Even the
Consumer Advocate gave his support to an enlarged investigation.


Is this

I don’t know.

But, there
is more reason for hope.
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.


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. Des. This is a very powerful post. Perhaps one of your best, on its pure simplicity. What is Nalcor trying to hide.

    The question for me is, and always been, are we getting access to the power in winter which was assumed by Nalcor when they determined MF was the lowest cost option

  2. Fortis, by its' silence, could in fact be considered complicit with both Nalcor and the Williams/Dunderdale administrations on MF. I've been asking these very questions for at least two years. Thanks for calling them out Des.

  3. I suggest few people know the difference between Nfld Power and Nfld Hydro. Nfld Power has the public face and send out the power bills, and upkeep the local distribution lines. I suspect 90 percent of the population think they are also the source of all or most all of the generation And Nfld Power have the most to lose from customer good will, when serious outages occur.
    This crisis was so serious that Nfld Power fears the fallout of more crisis events down the road. What will happen to their surveys showing 96 percent customer satisfaction. now and post Muskrat Falls. Reliability for power is a shared responsibility. Should Nfld Power get blame for government folly, with MF power being unreliable.
    But Nfld Power have been in bed with Nfld Hydro on the Take Charge program. A program that gives no meaningful benefit to residential consumers in energy savings, But worse, the program gives no benefit to help reduce the winter peak load. Nfld Hyrdo keep building the costly new generation infrastructure, increase the rates on the public, Nfld Power just increase their profits and revenue by just being the distributor of this expensive power. Why speak up against this approach. Why take the lead in reducing winter peak loads with robust efficiency -conservation plans. Such plans, while beneficial for the homeowner, can also reduce and impact their profit .Better to stay silent. Go lockstep with Nfld Hydro on the Take Charge program, which ignores the growing winter peak load. Do nothing and hope for the best. On this they can`t divorce themselves from Nfld Hydro. The were in bed together, having the worse Plan In north America to shave our growing peak load, while having a load profile and climate others would envy, in terms of what could have been done, and needs to be done, to reduce the risk of more outages. Winston Adams. Logy Bay. .

  4. Once again, your blog has raised the disturbing spectre of corporate and government complicity, insofar as Newfoundland Power's unwillingness to challenge their rationale on Muskrat Falls and to allow this sorry state of affairs to develop. By not challenging their absurd assertions, Newfoundland Power can be considered complicit in the development of this disastrous project.

    Yet, they will be held to task if power supply is not reliable or secure in the wake of Muskrat Falls, because they knew the implications of not having a reliable stand by system once that project goes on line. After all, only a fool would assume that these power lines, extending over difficult terrain and subject to some of the foulest weather on the planet, would NEVER go down and for how long. A week or two weeks is not out of the question and what would happen then, in the event the Avalon experiences a cold snap and there is no Holyrood or other themal system in place. From my perspective, it gives the lie to the alleged purpose of Muskrat….namely, to rid the province of Holyrood…as some sort of thermal is both essential and prudent.

    Further, NALCOR's neglect of vital infrastructure makes reliability and security of supply even more unlikely going forward.

    Yes, Newfoundland Power, the decision has been made but it is still not too late to unmake it and pull the plug while the PUB undertakes a thorough review, as it should have been allowed to do prior to sanctioning. It is a scandal in the making and many of our current politicians and business elite will have much to answer for in about 5 years.

  5. As for Holyrood closing and being decommissioned…..Holyrood consists of three large generators, and the associated thermal oil fired equipments that make the steam, and the turbines that are driven by the steam, which in turn makes the generators spin, all in one big structure and the three large smoke stacks.
    It's location, on the Avalon has two great advantages; 1. It is close the the large loads at St Johns and others on the Avalon. Therefore transmission losses are likely only 2 percent versus 10 percent from Muskrat falls. The losses is power produced that never gets to the consumer, so is inefficiency. 2. Reliability, avoiding the vulnerable ismis of the Avalon, where icing can, and has taken down the 230KV lines. MF has a whole array of obstacles in terms of reliability, and so is far inferior to Holyrood, (assuming Holyrood has proper maintenance and upkeep).
    The plan for Holyrood is too keep some of those assets. But the steam generators and turbines will not be needed. But the huge generators will be needed, but not for power generation. They will be used as "syncronous condensers" These huge generators will rotate and run freely, electrically connected to the grid and at a speed of 60 hz, or 60 cycle per second. The purpose is to stabilize the frequency and voltage of our grid . It is essential that the frequency not deviate much from 60 Hz, as all the customers motors and appliances are designed to have this speed. If the speed goes to 59 or 61 it is a serious issue, and may cause a cascade of outages. The big generators are made from a lot of steel and copper and have a lot of rotating inertia. And they can run without consuming any energy, once disconnected from all the other mechanical apparatus. This inertia aids the stabilization of the electrical system, from a fault elsewhere that may change the voltage of frequency, so these big generators can use its inertia to help keep the systems together, electrically speaking. So I assune the building, the switchyard and lines in and out will stay put, and will require its own continued maintenance and upgrades when needed.
    The question of MF reliability begs the question of the wisdom of decommissioning the other components of Holyrood, which is necessary for a functioning thermal generation plant.
    Gas turbines are much more efficient and fast responding. They allow better efficiency when connected to wind generators, which in itself has proven extremely efficient in recent high wind condition, reaching 87 percent of capacity on Jan 4 instead of the average 43 percent.
    It seems Holyrood as a generation plant will be essential. The existing has about half it useful life left, but is inefficient and doesn't work well with wind generators. Past time to assess this properly, in light of the recent brown outs.
    it seems wise to have gas turbines that are fast acting in emergency conditions and add efficiencies to wind generators,and to also add more wind generators. And with increased efficiencies for home heating (essential to lower the winter peak load)….. the whole idea of a need for MF for the island seems a folly. A proper assessment a few years ago would have reached this conclusion. Winston Adams Logy Bay