Resources minister Siobhan Coady said she is very concerned about the
continuing problems at the Holyrood generating plant.

The new
Minister of Natural Resources is sounding a lot like the former Tory Minister,
Derrick Dalley. And that’s not a tag synonymous with political success. 

The Minister
told the CBC  that “the Holyrood plant breaks down too often.

I’m concerned that we have an aging asset, that we have an old furnace in our
house.” The CBC reported the Minister stating “the only solution is to
find another way to generate electricity.”

The Minister
would only be right if you agreed all the facts should be ignored.

she has not read the Liberty Reports which followed DARKNL; that’s the
independent group of engineering experts the PUB has looking at the causes of
the January 2014 ‘blackouts’ and the security of the province’s electrical

Siobhan Coady hasn’t read The Liberty Report, someone at the Telegram noted,
last year, the Report does not describe a group of “world-class” experts. The
Paper’s Editor concluded “there’s nothing world-class about this situation”,
referring to the management of the province’s electrical system. 

I noted on
this Blog, in April 2014: “…Liberty was not assessing the Muskrat Falls project
or the current level of cost overruns. 
The Consultants were merely assessing Hydro’s machinery, its capability
to conduct normal maintenance and management procedures, review its demand
assumptions and generally evaluate its ability to keep the lights on,
especially in winter.”

Liberty did
not mince words. It cites failures in the “operation of key transmission
equipment”, including a failure to replace transformers and maintain major
circuit breakers.

again from the Report: “Liberty found that Hydro’s shortage of generation
capacity was exacerbated by a failure to complete planned outage work needed to
ensure the availability of its full range of generating facilities as the
winter season began.”

situation, it notes, “raises questions about Hydro’s operation” that it “did
not complete recommended maintenance activities on the equipment that failed…”

Liberty said
Hydro wasn’t even using the right models to forecast electricity demand.
It stated
that Hydro relied, not on providing adequate generating capacity, but on
‘outages’ to take us through periods of high demand.   

Liberty, “Hydro has planned its system to
the same overall standard for many decades. This standard provides for lower
reliability than what Liberty has observed in other regions of North America”
added).  It noted that Hydro’s plan is
based upon “roughly twice” the frequency of supply related outages than found
elsewhere. It found that Hydro “tended to allow decisions at the margin to
favor more versus less risk”. (emphasis added)

found that a “continuing and unacceptably high risk of outages from such causes
remains for the 2015-2017 winter seasons”.

In its Final
Report, entitled Review of the Newfoundland and Labrador Hydro Voltage Collapse,
dated March 4, 2015 (less than a year ago!) Liberty had these recommendations, among others:

1. Hydro
should assign a team to implement a program to establish a more robust operational
philosophy regarding reliability. Hydro has not agreed that there is a problem
in this area. The continuation of a
reliability culture that does not place higher value on service continuity
requires as a first step an internal evaluation to understand the issue and set
objectives for improvement.
The present operational approach will become
even more problematic when the LIL enters service. Hydro should adjust it
promptly. (emphasis added)

2. Hydro
should enhance the skills and capabilities it brings to reliability engineering
and analysis. Our report following the
January 2014 outages found a number of examples of non-standard industry
thinking associated with reliability. The March 4th incident provides another
telling example.
This suggests that more conventional approaches and the
skills to implement them are appropriate. (emphasis added)

So how does
Siobhan Coady race to the conclusion, as she told CBC “I’m concerned that we
have an aging asset, that we have an old furnace in our house…. We have to get
an alternate energy capability into this province … we have to make sure we do
the right things.”

It is not
difficult to see how bad decisions get made, how Ministers, who are not astute, race to the conclusion: we need Muskrat having erroneously concluded “we have an
old furnace…” Ergo we have to spend our way into penury to get something new.

Those who do
read will want to return to Liberty’s first recommendation and the line “The
present operational approach will become even more problematic when the LIL (Labrador
Island Link) enters service.

Perhaps, as one wit wrote this morning, “the Minister is doing damage control for her new masters”.

But, mostly. the Minister reveals the EY Review is unimportant. Regardless of the cost, it seems we have to rush ahead with Muskrat Falls

Premier Ball: so far we are not impressed!

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. She was a terrible MP, completely captive to Danny Williams. She is, and will be, a terrible MHA and Minister, and she is already showing that. The one saving grace is that she, and this entire tire-fire of a government, will be one-termers.