CONSUMER ADVOCATE SHOULD BE TAKEN TO WOOD SHED

The
Consumer Advocate to the Public Utilities Board (PUB) is not on your side.

What other
conclusion can be drawn from the actions of an Office that gives so much energy to
providing cover for Nalcor’s devotion to secrecy?  Newfoundland
Power, another paragon of conflicted loyalty, is also unsure of the
constituency to whom it owes the greatest duty.  It, too, needs a comeuppance.

What is
going on?

The PUB has
convened a “Paper Hearing” to deal with a request from Newfoundland Hydro (NLH) to quash the requirement that Nalcor answer a list of
questions submitted by the Grand River Keepers (GRK) of Labrador and Danny
Dumaresque.  Both GRK and Dumaresque are interveners
in the PUB’s investigation into DARKNL. 
The PUB is compiling information for Phase II of its Report dealing with
the “adequacy and reliability of the Island Interconnected system over the
short, medium and long-term…after the commissioning of Muskrat Falls”.

Nalcor does
not want to answer GRK’s and Dumaresque’s questions.  It is telling the PUB that they are not relevant
to the issue it is investigating.

What is
wrong with those questions? Let’s take a look.


The GRK is
seeking proof that Nalcor’s latest cost overrun of $800 million will result in
“average electricity bill increases of $8 per month over what was projected at
sanction” as CEO Ed Martin stated.  Ed Martin does not want to show
the public his arithmetic!

The Group
also wants a final version of the Power Purchase Agreement which includes,
among other things, the schedule of power capacity available to the Island
electrical system from Muskrat. Nalcor has made big “firm” commitments of power to Nova Scotia and, lately, to Alderon.  Nalcor can’t have its cake and eat it, too; GRK rightfully asks, how much is available and when.

The GRK demands
information on the Water Management Agreement; in particular data regarding the water flows at Muskrat Falls and irregular production at
Churchill Falls.  

The GRK points out that
in, in the absence of the WMA, which is now being challenged in the Quebec
Superior Court by Hydro Quebec, Nalcor would lack advance knowledge of the
flows from the Churchill Falls facility; at Muskrat Falls, it would
have to “chase the flows”.  That means Nalcor is forced to produce energy as water becomes available, as opposed to when it is required; possibly spilling water, at Muskrat during the Spring run-off.  Such an outcome would impact Nalcor’s
capacity and commitments, especially during the peak demand winter period.

The GRK asks
Nalcor how it will deal with an extended outage in the event of a failure of
the Labrador Island Link (LIL) and how it will replace the power in such
circumstances. 

The GRK
seeks answers regarding the North Spur “Quick Clay” stability problem, which
would be potentially catastrophic for the entire electrical system and for the
residents who live downstream, in the event of a dam break.  (“Let’s Hear From A Real Expert”, is a recent Letter to the Telegram Editor by Engineering Consultant P.C. Helwig It is a well argued view that Nalcor V-P Gilbert Bennett is not the person to whom we should be depending for expertise on the North Spur.)

The GRK is hardly off topic when it asks Nalcor if it has an Emergency Preparedness Plan for
the North Spur, either. Do you really think the residents of Goose Bay and Mud Lake want the PUB to scratch that one!

The GRK
also wants critical information released regarding the design and construction
of the LIL. Should we not be concerned that, in the midst of the Alpine conditions that prevail over the Long Range Mountains in winter, the LIL might fail in a storm?

None of the
questions are superfluous or lack sound intentions. Most relate to the
reliability and security of our power supply in a fundamental way. 

Indeed, Mr.
Dumaresque’s questions are equally compelling; many deal with issues similar to
those raised by GRK.

What has
the Consumer Advocate so frightened that he needs 8
pages to support Nalcor’s contention that the PUB should dismiss questions raised by the few citizens willing to stand up to a secretive Crown Corporation?

It is not
as if the Consumer Advocate has been a vigorous champion of the public interest.  Indeed, it is not as if he proposed, in the
first place, that the PUB broaden its investigation into the adequacy and
reliability of the power system in the post-Muskrat period or offered any but
tepid support to those interventions.

The Consumer Advocate argues, in defence of Nalcor’s Motion, the interveners’ questions “…would
prolong and complicate…and prejudice the inquiry and those participating in
it”.



“Prolong”, yes. “Complicate” and “prejudice”? No. But the questions might bring some much needed clarification to specific on these matters; the truth would be good.

The PUB is
the only independent Agency mandated, by law, to require disclosure from our utilities.  The Consumer Advocate’s
intervention is terribly unwise and raises questions as to just how badly the
Office is conflicted.

The Advocate
should be seeking to expand the PUB’s Inquiry. He should  be demanding that every issue, under the sun, is exposed in order to limit the prospect that DARKNL is ever again repeated.

Did he not
read the “JM” post on this Blog, Monday past entitled, THE SNOW JOB
JM offered solid evidence that Nalcor withheld vital information from
the PUB, of its intention to commit of 167MW
power capacity to Nova Scotia, including during the peak winter period.  JM revealed that Nalcor had also failed to reflect that obligation in the determination of
Muskrat, as the lowest cost option.  

Among
other things, it failed to disclose the requirement for 300 MW of power over the
Maritime Link to meet local winter peak demand or who will be held responsible for paying
for that power.  



The DG-2 Reference to
the PUB, in 2011, was a charade; if the Consumer Advocate is not prepared to hoist Nalcor on its petard for this deception, how can we assume that the Consumer Advocate’s Office is anything but complicit in Nalcor’s games?  

Why would this important Office continue to insist on secrecy for a Crown Corporation that cannot be trusted?
_________________________________________

Related Reading:            THE LAP CAT HAS NO CLAWS
  
                                         THE SNOW JOB
______________________________________________________

What of Newfoundland
Power?  The Utility’s leadership screwed
up a modicum of courage, earlier this year, siding with Pre-Hearing interveners,
including this scribe, who asked the PUB for an expanded Inquiry.  Now, it has gotten cold feet.  NP feels a need to be ‘cheek to jowl’ with Ed
Martin, once again. 

Is the
Company worried because, just as the Government “mistaken;y” expropriated the Abitibi assets,
including the Star Lake Hydro dam (partly owned by NP’s corporate parent “FORTIS”), it can as easily confiscate the
assets of Newfoundland Power “by design”?

If
Newfoundland Power does not possess the fortitude to insist, publicly, that Nalcor’s
claims regarding the “adequacy” and “reliability” of the Island’s electricity
generation should be evidence based, that
the customers’ interests are paramount, on what basis does it merit our loyalty
and support, in return?

This week, the
PUB, an Agency that demonstrated its capacity to recognize a “Snow Job”, during
the DG-2 Muskrat Falls Reference, will continue its “Paper Hearing”.

As the under appreciated
and vital Agency that it is, the Chair may wish to give the Consumer Advocate  a lecture about his public duty and, to Newfoundland
Power, a reminder of its responsibility to those for whom the ‘bill’ tolls. 

I am
hopeful the PUB Chairman’s long recognized bark still has bite.

_______________________________________________


Note: Look for PART II of THE SNOW JOB by “JM” on Thursday, under the Title 
“A VISION BUILT ON DELUSION”.
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.

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2 COMMENTS

  1. A little simple arithmetic shows that an $8 per month increase as a result of an $800 million overrun is not including all the costs. It works out to $96 per year and at 280,000 customers including all the tiny one room connections, it is $27 M in revenue or 3.36% of the capital involved. The cheapest money is the loan guarantee at 3.8% and each bit of overrun obtains a higher interest rate so the best rate for this $800 M would be in the 5.8% range. Considering the principal has to be repaid pushes it to more than double the $8 per month. The average family household is a lot bigger than the tiny one room connections so expect it to cost you about $20 per month at least. The next $800M overrun will cost you a lot more as the risk increases to the lenders.
    The lame Consumer Advocate thing, who is really nothing more than a patronage appointment, was well known from the early days when he endorsed the Muskrat project with little info request.
    It looks like we have this project for better or for worse so the bigger issue to me is how do we plan to deal with Quebec if and when they win the Water Management Agreement. Quebec will dictate when MF operates so there will need to be arrangements to ship power out through Quebec and also buy back or just spill water at times and operate thermal at other times. Gilbert Bennett, in his article on Canadian Energy megaprojects, talks about the increase in energy storage capacity from 2.5 TWH (island storage) to 22 TWH including the Upper Churchill. That is correct except that Hydro Quebec may control 90% of that storage so who will make the money on what is in the "energy warehouse"?
    The only benefit that I can see of hiding the full disclosure at this time is that it will certainly hurt the sitting government more. It maybe time for a Plan B and I can't think of anything else other than to start dealing Hydro Quebec.

  2. This particular consumer advocate has not defended the interest of the Consumer. One just has to compare our own CA's performance to that of John Merrick in Nova Scotia. John Merrick defended the rights of the consumer. He asked indepth and challenged questions, and was capable of independent thought. Our poor CA has not demonstrated this last characteristic.

    A strong CA in Nova Scotia was able to secure additional concessions by Nalcor in the securing of additional surplus power into the future.

    Our CA in Newfoundland spends taxpayer money and repeats others arguements. He should be pusing to be asking these same questions which are now he is attempting to suppress.

    This would only occur in our banana republic.