Guest Post Written by David Vardy

Puerto Rico Financial Control Board
Puerto Rico is a US
Territory which has for decades been autonomous. It is not a state. But it has
had sufficient independence to build up a debt of $70 billion. Its population
is just under 3.7 million and has been declining. This amounts to a debt of US $18,919
per capita or $24,935, in Canadian dollars. RBC’s financial projections 
place the per capita debt of Newfoundland and
Labrador at $27,542 by the end of the current fiscal year, or 10% higher than
that of Puerto Rico.
Without federal
intervention Puerto Rico faced default on its debt, which would have made further
borrowing impossible. The US Senate on June 30, 2016 passed the “Puerto Rico
Oversight, Management and Economic Stability Act” (“PROMESA”) and it was signed
into law by President Obama. The Act enables the government of Puerto Rico to
restructure its debt and to regain access to capital markets.

A financial control board
(the “Financial Oversight and Management Board”) will consist of seven members
appointed by the President, of whom at least one must be a resident of Puerto
Rico. It is interesting to note that, prior to appointment, the members of the
Oversight Board “may not be an officer, elected official, or employee of Puerto
Rico, a candidate for elected office of Puerto Rico, or a former elected
official of Puerto Rico.” The Governor or his/her designate will be an ex
officio member of the Oversight Board but with no voting rights.
The Board will have broad
powers to control the financial and legislative activities of the Government of
Puerto Rico, which will continue to function. See the attached article from the
Harvard Law School Forum on Corporate Governance and Financial Regulation for
more information.
This bears some
similarity to what happened in 1934 when the UK appointed a Commission of
Government to replace the elected government of the self-governing Dominion of
Newfoundland. The debt of the Dominion had grown to the point where 60% of
revenues were going to pay interest on the public debt. While the burden of
servicing the debt had been growing,  revenues were declining as a result of the
deepening Great Depression and the collapse in the world price for salt fish,
our staple export.
The government of the day
voluntarily surrendered sovereignty to a non-elected government. On February
16, 1934 six non-elected commissioners were sworn into office. The Commission
consisted of seven persons (including the Governor) appointed by the British
government. Three commissioners from Britain were assigned responsibility for
the three most important departments while three commissioners from
Newfoundland were appointed to the other three departments. The Governor
chaired the Commission, which governed the country, without a legislature and
without elections, for 15 years.
How Long Can we continue to borrow at the current level?
Our province is borrowing
more than $3 billion a year. How long can this continue? For three to five
years? Or just a matter of months? The Auditor General
recently gave a public presentation, from which the following chart is copied.
It compares the current account deficit for all provinces as a percentage of
Gross Domestic Product. Our deficit, compared with the deficits of all other
provinces, is 13 times as high! 

This does not include our huge capital account
deficit, inflated by the borrowing needed to inject provincial “equity” into
Muskrat Falls. Nor does it include the federally guaranteed borrowing by Nalcor!
It shows a deficit of over seven percent of GDP. If capital borrowing were
included it would exceed ten percent.  The
gradual reduction  of  the deficit, as shown in the chart, depends
upon  the willingness to make deep
spending cuts and upon decisions that have yet to be taken. Without such
decisions the deficit could continue and perhaps balloon even higher. Is there
a political will to make these draconian cuts? Where is all of this leading us?
Is there any hope for us?

Looking to the hills for outside help to avoid the Apocalypse
“I will look to the hills
from whence cometh my help” (Psalm 121:1). Will there be help? Will it come
from rising oil prices or reinstatement of equalization payments? Or will it
come from the negotiation of an omnibus deal with Quebec?
Government is dealing
with the following three wild cards, a veritable Unholy Trinity:1) the price of
oil, 2) the return of equalization payments and/or 3) a New Deal with Quebec. I
will take each in turn.
The price of oil will be kept in
check by shale wells that will return to production when Brent hits $60 US.
Reactivation of these wells will invoke the law of supply and demand. With
increased supply the price will fall or hit a ceiling. There is limited potential
for royalty revenues to rise and to rescue us from our overspending.
Our fiscal capacity exceeds the
national average so return of equalization payments is unlikely in the next
five years. A new equalization formula will be implemented in 2019 but it is
improbable that it will pay equalization to a province which continues to enjoy
relatively high revenues, due in part to our oil revenues, albeit reduced.
A New Deal with Quebec: Is Gull
attractive to Quebec? I do not know. The cost estimates for Gull are outdated
and neither Ontario nor Quebec is short of power. My hope is that we can do a
narrow commercial transaction with Hydro Quebec, one which supplies us with a
small amount of power (250-300MW tops), at Hydro Quebec’s opportunity cost. In
other words we pay them slightly more than they can obtain in other markets in
order to obtain power to meet our commitments and to supply provincial load
growth, if it materializes.
If instead we are going
to enter into another grand imperial set of negotiations embracing Churchill
Falls, Gull Island and Muskrat Falls then we will be negotiating from a
position of weakness and Ottawa is unlikely to be an ally. We should first
attempt to do a simple commercial deal with Quebec before engaging in high level
negotiations which will open up all past wounds and grievances. If we cannot
first consummate a small commercial agreement with HQ for the purchase of power
from Churchill Falls then the prospect of some kind of Grand Alliance, perhaps
encompassing both hydroelectric development and transportation, would seem
remote. Certainly we should not agree to set aside the Court Cases as a
pre-condition to a commercial purchase of power for Muskrat Falls.
Federal Control Board
What will happen if none
of these three “solutions” materializes and if we do not put our fiscal house
in order? The inevitable answer is bankruptcy and the loss of our ability to
borrow, or else some form of Commission of Government, following the model of
the Dominion of Newfoundland in 1934 or the similarly draconian model of Puerto
Rico in 2016.
Is the loss of our
sovereignty a real threat to the province of Newfoundland and Labrador? Will
the federal government appoint a control board similar to what the US
government did for Puerto Rico, and which bears a chilling resemblance to
Commission of Government, which ruled from 1934 to 1949? If the federal
government intervenes then to what extent will they insist upon the deep
spending cuts which provincial legislators were unwilling to make? Our own past
experience and that of Puerto Rico suggest that if we cannot take charge of our
financial destiny on our own that we will face a bleak outlook for a protracted
period of time. Better that we take the medicine ourselves than having it
forced down our throats by a Federal Control Board!
David Vardy


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. David you ignore the fact that your regulatory system is captured and this essential component of a democracy is ignored in NL.

    How can you propose negotiations with HQ when the debacle unfolding on the Churchill remains cloaked in secrecy? Is not transparency and accountability for the lies that underlie MF not an essential first step in finding solutions? MF was never the least cost option. The PUB and JRP being denied the financial info to determine the need is all the evidence needed to establish this FACT. To find solutions you need to put your regulatory house in order. To refuse to do so just provides comfort and cover for the authors of the looting of the treasury.

    David you conveniently ignore the political dysfunction, self dealing and corruption that led to the Commission of Government. You again ignore the same issues playing out at MF. Without transparency, cracking open the Nalcor black egg and disinfecting the operation with democratic and accountable oversight, how will things ever be different? If you continue to fear the truth and protect the authors of this unnecessary vanity project how can you pretend to have solutions?

    It was the unwillingness to confront native sons for their excesses in the 1920's that led to C of G. Nearly a century later why is sheltering the perpetrators of this undemocratic looting of your collective future still tolerated? Without the courage to confront these truths no solutions can be found.

    Politeness to a fault has aided and abetted your fiscal disaster. The solution begins with a full and brutal accounting for decisions that hid the truth from the outset. Continuing to absolve native sons for undemocratic, destructive vanity projects will only ensure failure and C of G 2.

    Pretending to offer solutions while fearing exposing the ugly truth is not the way forward.

    It is time to stand up and ACT UP!

  2. Unless the general population supports an uprising to purge the swamp, we are doomed. The whole system is rotten to the core. I work within the beast and believe you would have to fire the entire management structure (DM,ADM,Director,Manager) and start over. Everything is so contaminated with nepotism, sycophants, incompetence and dysfunction that it is beyond reform. This would have to apply to crown corporations as well. I work for a department that could be eliminated and nobody would notice.

    Isn't it amazing that not a single leader in any of the political parties is willing to consider halting Muskrat Falls? Are they all compromised somehow? We need a #NewfoundlandSpring movement to force change.

  3. Unfortunately, Dwight Ball (like Danny, Dunderdale, Marshall and Davis before him) is as blind as a bat when it comes to this Muskrat Falls travesty.

    All are putting the boots to the people of the province — the people they have been sworn to serve.

    We don't need the power. Yet we keep pushing the province toward bankruptcy and once again toward a no-win negotiation with Quebec.

    Dwight keeps wading into the deep end of the pool with his lead boots on. If he didn't have the remaining 500,000 Newfoundlanders and Labradorians chained to his million ton concrete ego, then I wouldn't give a damn.

    But he (like those before him) have no moral right to drag the province down with him.

    Step one, period, is to put a stop to this damn dam (and then see where we need to go from there). Maurice Adams, Paradise

  4. David your measured, incremental support for negotiation with HQ on development of Gull Island as a way out of the morass is ill informed.

    Please read this report by the leading energy industry think tank "Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business.

    They outline that this is no time to invest in large capital intensive electric energy projects due to the disruptive changes in energy production and distribution.

    Looking to a dead past to remedy future problems is a fools folly. 2000 km extension cords are obsolete. Getting in bed with HQ who are in denial about this fact also, despite a glut of hydro that they cannot market profitably is destructive self delusion.

  5. "…a narrow commercial transaction with Hydro Quebec to supplies us a small amount of power at HQ's opportunity cost…"

    That's probably the most efficient alternative right now.

    And if we're still not ready for those "grand imperial set of negotiations" with HQ, we can keep this small purchase going on until 2041.

    Past 2041, CF(L)Co will be able to sell all this power at market value – including exporting it to the US via HQ's grid!

    • In case you have not noticed the wheeling fees through PQ and New England are higher than the retail value of the energy.

      In other words you will LOSE money selling the block of power. Surely your engineering mind can grasp this fact.

    • Wow, I was not aware that those fees were higher than the retail value!

      You do realise that Nalcor is (was?) currently exporting some CF power via HQ's grid (while paying those fees) right?

      That would be great to know more about those actual fees (and the actual calculating formula) that bind the north-eastern utilities.

    • Bruno, it would be nice if you had a source for your contention that Nalcor is losing hundreds of millions of dollars wheeling energy through PQ. Why would they do that? As far as I can tell, total revenue of Nalcor is only about 700 million. If HQ is gouging NL, complaints should be lodged with the FERC which has strict guidelines for network access. Nalcor's 2013 Annual report states the following:

      To access export markets, Nalcor has service
      agreements with Hydro-Québec for 265 MW of long-term
      electricity transmission capacity from Labrador through
      Quebec to the Canada-United States border and in 2013,
      Nalcor renewed those agreements for another 10 years.

      How can they lose hundreds of millions of dollars on 265 MW of power? Why would they willingly decide to sign a 10 year agreement for the opportunity to lose a very significant fraction of their total revenues.

      What am I missing?

  6. We never needed this project and the business case for it was based on untruths and perhaps insanity. There was no referendum on this multi billion dollar mega project and many have tried to stop it. Contracts are shrouded in secrecy, some were sole sourced, and corruption is to be expected especially with players like SNC.

    From the Globe and Mail: "A preliminary hearing over federal corruption and fraud charges against SNC-Lavalin Group Inc. has been set for a 50-day period starting in September, 2018."

    From Nalcor: "SNC-Lavalin Inc. is the engineering, procurement and construction management (EPCM) contractor for Muskrat Falls and the Labrador-Island Transmission Link."

    When does this massive debt become "regime debt" or "odious debt". Does the local population really have to pay it back? The regime in this case is perhaps a dozen powerful people pulling the strings behind the scenes and who collectively own all three political parties. It doesn't matter which side of this two headed puppet we vote for.

    "In international law, odious debt, also known as illegitimate debt, is a legal doctrine that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable."

    • Solar PV and solar hot water doesn't make much economic sense in a cold cloudy climate like ours when grafted onto existing, energy hungry housing stock. We have to start with demand reduction (primarily extra insulation and air sealing)and heat pumps. We also need to build new houses differently, see (Cold Climate Housing Research Institute). If we had our heating demand under control – no north facing windows, home oriented south with double insulated walls, minimal glazing and complete air sealing then the bit of electricity you'd need could be supplied with a small solar PV system.

      If you want an energy efficient house that costs almost nothing to heat, it is worth looking at this study: , and then at some of the homes that have been built in Alaska using this concept. One of these homes used a large water reservoir to store summer heat from flat plate collectors for heating several months later. If you compare this with our existing stock, we have the opposite. Random orientation. Minimal insulation. Low quality glass windows, far too much glass in general — even picture windows facing north. Poor air barriers and low quality HRV units don't help either.

    • Anonymous, solar might not make much of a difference in Newfoundland.

      It will, however, make a big difference in the U.S., just as shale did. It will make big hydro in the north not feasible as a way of powering the south.

      The coming global solar power grid will finish the job of abolishing large hydro.

  7. Bruno, you amaze me to your lack of engineering knowledge, especially as to certain technology being very suitable to some location and climate but the same technology not suited to other location and climate. You need some ABCs on this. Some of your views are on track, but some just crazy (well, lets be kinder and say way off base)
    Winston Adams

  8. Winston,
    You deny that the US market is moving to widely distributed generation and distribution? The implication is NO Market for overpriced power unless you take a 20 cent or more per KwH loss on all the power like at MF.

    You doubt the "radicals" at the Edison Institute and their warning to producers. Unless you can make money selling power at 4.5 KwH your technology and those long power corridors are obsolete.

    What exactly am I missing? Besides your offbeat sense of humour?

  9. Good work by Mr. Vardy.

    I am actually an advocate of Dave Vardy becoming premier. For the past 4 years he has provided the most sensible opposition. He is reasoned, articulate, experienced, and most of all principalled. He has seen former premiers (ie; Williams) try to bully him into submission, but David Vardy has continued to speak. What he speaks of makes a lot of sense.

    We are in a mess in this province. We hear the union leaders warn of austerity? They are idiots… it is the government stimulus of the past 4 years which has put us in the predictament we are in.

    It is time for NL to pay the pipe.

  10. Bruno, my son……… are you from Nova Scotia? Not Sure. What type of house and heating do you use. What are your technical qualifications?
    I read the Edison report about 2 years ago. A good report. Disruptive technology is and should b a concern. 40 years ago I used telex, then along came the fax, then the internet……one must be aware of the impact….that is your point and valid. But compare solar PV panels for Arisona to Gander , and then Argentia………. do you get my point. And do the same for battery storage for these locations, and the cost effectiveness. Think we can go off grid and not need our hydro? Lesson one!

    • You do have your blinders on Winston! You miss the point. The rest of the world won't need your megdam proposals. Has MF taught you no lessons?

      As for local generation have you missed that NL has the best on and offshore wind regime in the world?

      If only you could get over your fixation with building buggy whip factories!

    • Buuno, Bruno, Brrrruno. Who has the blinders. First you answered none of my questions….so you pivot to wind.
      Have I supported MF this last 4 or 5 years?
      And yes, NL has great wind resources, and it has a place for Nfld needs. We have only 54 MW on now and it aids reduction of oil consumption at Holyrood. So, again, you are on tract while being off track. Do you know the limitations for wind for the island? And why those limitations exist?
      And what whips do you refer to?
      And my sense of humor is offbeat……..only your opinion……and better off beat than none at all. And don't get me started on Ashley again……I might quote from her emails to me. And then I might get in more trouble.

    • I live in a 115 year old wood frame house. it is (now) well insulated and I heat with renewable active carbon hardwood (beech and yellow birch mostly). I used less fossil fuel than you did with a mini split (as if that is relevant).

      That you must cling to pretension of technical competence when the MF boondoggle still confuses you is very telling.

      I told you before MF was sanctioned what the problems were fiscally and ecologically including the terminal threat of spur collapse. My first visit to the spur terrified me when I saw the facts first hand. Have you seen the beast Winston?

  11. I am playing catch up as Des keeps moving the conversation forward.

    The similarities in Newfoundland's current financial state and late 20's to 1934 are astonishing.

    How many here know that at one time, (late 20's), Nfld the colony offered to sell Labrador to Quebec for a few million, and Quebec refused the offer?!

    a) What would Quebec bid today to take this lodestone off the backs of the Avalon Government's hands forever?
    b) Does anyone know what the current government has placed to bid in Quebec negotiations?

  12. Bruno, we are making a little headway….. glad to see you burning wood. You say say you used less fossil fuel than me with a heatpump…. maybe….. do you rely entirely on wood for heat?
    I purchased a wood pellet stove 6 years ago, calculated i could save 30 percent on heating over baseboard heaters. Upon investigating mini-slpits I calculated a 60 percent saving, so my stove is sitting here not installed…..but I plan on it for backup. I have achieved better than 60 percent reduction on heating costs by the way. Holyrood used to supply 30 percent of our needs, but now only 11 percent. So, you are correct that my heat is still part Holyrood.
    As I am achieving about 70 percent reduction on heating, my use from Holyrood is now only about 3.3 percent, making my heat 96.7 percent green. How do you like them apples! So are you entirely wood? And what fossil fuel goes into your wood supply….power saw, transport , ATV maybe? Not to mention your time and labor to keep the fire going. Who is greener?
    And your reference to whips ……… you mean mini-splits are old technology, or you being naughty as my relationship with Ashley? I assure we are purely platonic. So she emailed me from new York at 1 am. And I invited her to my house and also my cottage. But that was merely to inspect some of my special techniques, for mini-split installation I mean. I told you….fine girl…….and I look forward to actually meeting her when she gets time , as she is very,very , very busy, she assures me.
    But you have pivoted again. Switched from solar to wind and now to wood. Do you have trouble with tangential thinking, too? And you bring up the Spur, without you and I agreeing on the other topics. Boy, you jump around a lot, and since my stroke, I try to avoid jumping.
    Are you being naughty again? To you like western movies? You mention whips and now spurs, and some kind of beast. A spur…a hard projection on a cock's leg, or a pricking instrument with a point worn on a horseman's heel. Where are you going…..nothing very frightening about spurs. How big is this spur….lets agree that PV solar is not a great idea for Nfld, but does have a little value. Agreed?

  13. To make my position perfectly clear I am not advocating Gull Island as a solution to this problem. I do not see rising oil prices, development of Gull Island or the return of equalization payments as the solution to our economic and financial crisis. Public spending must be brought under control and this includes spending in health and education. Public sector salaries must be reduced. Muskrat Falls should be suspended and its assets preserved for future development while a cost benefit of the options is undertaken, including the termination of the project versus its completion. It is timely to undertake such a review now that the schedule has slipped and winter has set in. The future costs of completing the project need to be weighed against the costs of stopping it. As part of the cost benefit analysis there must be a determination of how much we should be prepared to pay in order to purchase power from other sources, including Hydro Quebec, and to wheel this power through the newly constructed transmission lines. While the amount of expenditures incurred and committed is large we have to be governed by future costs, not past costs. Bygones are bygones and the only costs that matter are future costs.
    David Vardy

    • A laudable and coherent plan David.

      What political forces can you mobilize to bring sanity to Nalcor in particular. You are correct that sunk costs (money already spent) does not matter only future spending is relevant to the debate.

      Wishing sanity will prevail is no political strategy. What will you DO David?

  14. "MF should be suspended and its assets preserved while a cost benefit of the options is undertaken"

    Agree 100% with above! That's the most responsible move to do until we realise the full magnitude of this disaster, the different possible scenarios, and the actual effectiveness (if any) of a completed MF facility (even without operating coordination with CF).

    Also, as you are saying, we shall determine how relevant/cost effective would be purchasing power from other sources.


    And about those "grand imperial set of negotiations" with HQ, we can keep purchasing electricity until we are ready to strike a deal with HQ. Otherwise, then keep purchasing it until 2041 (We'll have plenty of power afterward!)

    • Great! Thanks to Bernard's facts finding on wheeling power thru Quebec, I bring back the following:

      "Past 2041, CF(L)Co will be able to sell all this power at market value – including exporting it to the US via HQ's grid!" ��

    • Ex-Military Engr – there is a catch – CF is over 5,000 MW (to put that into perspective, MF is 840 MW. HQ obviously has the capacity to bring that power to markets in Quebec. However, it has almost no spare capacity for export to the US. Moreover, it is very hard to convince American states to construct high voltage transmission wires through their pristine wilderness. These wires are ugly, noisy and pose a health risk. Over the course of discussions over MF, HQ told NL that wheeling the power through Quebec would require improvements to transmission capacity that would cost about $3B. Premier Williams claimed that estimate was too high. It comes down to who you want to believe. If challenged by NL, HQ would have to justify its estimate to the FERC, which controls competition in the US market. My guess is that any deal with Quebec would be political suicide in NL, and I think that is a shame. I think that mentality can lead to bad decision making in NL, though I am certainly not impartial. So it is not clear what happens in 2041. Some energy could be wheeled through Quebec to the US. I suspect it would be very costly to take 5,000 MW through the so called 'Anglo-Saxon' route. Moreover, I doubt that NS has the transmission capacity to wheel that much energy through to the US. NL and Quebec are joined at the hip like Siamese twins.

    • Mr. Lahey, I like your phrase `NL and Quebec are joined at the hip like Siamese twins`, it points to the logic of working together for mutual benefit.
      MF has a rated capacity of 824 MW and average capacity of only about 550MW. When delivered to the east coast of Nfld , this is only about 500 Mw. I assume that HQ existing lines, when working with HQ, could handle that, if you could comment.
      Also, as to the endless court challenges: I have long held the opinion that Labrador aboriginal groups may have had success in the courts if they had collectively challenged both NL and Quebec parties, as they were left and, not consulted and had no benefits from the Upper Churchill.Can you comment. With MF, and their New Dawn agreement they have abandoned that avenue for something like 2 million a year compensation.
      I recall that the Cree had issues for James Bay development, and had a struggle to get appropriate compensation. Can you comment on benefits in Quebec for aboriginals as compared to NL.
      Winston Adams

    • Dear Mr Annoynmous and others,

      I am afraid I will have to disappoint you. My experience at HQ was in finance and management of the pension fund. CF has always been a passion of mine. I knew a few old salts who provided a wealth of knowledge on the subject and I read quite a bit on the subject. However, my knowledge of the core business is woefully inadequate. I wish it were not so.

  15. This just in:
    Last evening I received a call from my technical assistant saying: "It dropped to minus 11 c last nite, colder than forecast"
    "What was the load" I asked, expecting about 2.8 or 3 kilowatts.
    "2.1" came the reply.
    "Total for all 3 units" I asked, somewhat surprised.
    " Yes, but there was no wind" he stated.
    "But we saw 2.5 kw at minus 8 back in April.Now it s lower. Interesting, but good news." I said.
    " At this rate, we're not going to see the units go to full load at all, even at minus 15 or minus 20" my assistant said, sounding pleased.
    "Seems that way" I agreed. I reasoned that the ground temperature is now warmer than in April. We likely had higher wind in the April reading.
    For readers who may wonder what to do to address expected future high energy costs, and now use electric heat,or other heat source, this conversation would be of interest, it is what is termed "end-use research"
    "End-use" means what you the customer, at the end of the transmission line, does to consume electricity, whether it be for heat , lights or to toast bread.Research means to actually test the items where they are actually used to see if they conform to expectations, if manufacturers are honest in their ratings, if installation, sizing and operation can impact the performance.And if best practices can be recommended to customers how best to save energy, and also for the power company to reduce costs for new generation and transmission assets.. only by such research can you be assured. Otherwise there is a lot of guess work. Climate can make a dramatic difference. What works well in Boston may not work near so well in St. John's. What works in St. John's may not work so well in Gander.
    Most progressive power companies do such research. Nfld does not, despite being advised of the benefit of this for accurate forecasting.
    I have been waiting for colder temperatures since April, when we managed a few nights at zero to minus 8C. We want data for minus 15C or colder.
    So we have now encountered -11C.
    I wondered if there was an error in my assistants reading of 2.1 kw as an average load.
    This evening I accessed online his data recorded.
    For each hour from 11pm Tuesday nite to 9am Wednesday morning these are the loads:2.07, 1.83, 2.06, 2.23, 2.04, 2.42, 1.37, 2.75, 2,42, 1.95. The average for these is 2.114 kilowatts. This is the average load to heat the 4000 sq ft house, which includes a garage. The house is in Mount Pearl, and includes a full basement main level and upstairs, all heated to 21 or 22 C, with the garage just a little cooler.
    As we had some sunshine yesterday, the daytime load dropped . The 24 hour average for the full day was just 1.5 kilowatts.
    The house is being heated with 3 identical Panasonic dual head units, each with a rated input of 1.85 kw (total input of 5.55kw)
    At conditions reaching -11C , this means the units are using only 37.8 percent of the rated load. This is good news, and is a good indicator they will not max out even under -15C or -20 C conditions. Time will tell, as the weather gets colder.
    Under sizing units is likely the biggest pitfall impacting best energy and peak demand reductions.
    This house has 18 kw of baseboard heaters that is now shut down for the last 3 years. Programable thermostat as recommended by Nfld Power take charge assures that all 18 kw of heat kick in in the early morning, causing an increase in system peak load and more oil burning at Holyrood. It seems that at worse conditions this systems will not exceed 5.5 kw. Should all defrost at the same time, which is almost impossible, they could reach 6.87 kw total'
    This is a prime example of a demand management measure, to avoid fossil fuel burning, and less need for the expensive Muskrat power, and less backup thermal generation.
    Winston Adams

  16. I agree with Mr Lahey that Bruno is incorrect to say Nalcor is losing hundreds of millions of dollars wheeling power through Quebec. Bruno shoots a lot of nonsence, which is not helpful. If Bruno cannot back up what he says then he should at least say he is in error. It perhaps is support his theory that long distance transport of energy is obsolete. Because Muskrat is not cost effective that does not mean that many others are not cost effective. The figures Lahey quotes is what I understood was the case.Not gigantic profits, but profits and not losses as Bruno says.
    Winston Adams

    • I am not incorrect. two years ago Nalcor lost about 120 million wheeling through PQ. Their incompetence knows no bounds.

      Trolls are very boring. Saying black is white, ignoring the facts and ugly politics and cheerleading for the incompetents that are sending NL to C of G 2, resorting to ad hominum attacks in lieu of informed debate disqualifies your opinions.

    • Bruno, I seem to remember that Nalcor did better with HQ in charge of our power sales into the USA, and was profitable to Nalcor. When they did it , it resulted in less profits, but as I recall, not a loss. I stand to be corrected. Can someone clarify this? As to trolls, if aimed at me, when have I cheerled Nalcor, Hydro or Nfld Power or politicians. Lighten up. Uncle Gnarley has a check list whether his pieces are funny, informative or interesting. This blog is very serious, but a little fun now and again………not so bad, is it. AD HOMINUM? My latin is stale…….does it mean "to you personally"? Recall your opening salve "Winston, you have a stroke….your racist rant" . I take it with a grain of salt, can't you? We're on the same side I believe.

    • Bruno, I am not saying you are wrong. It would be more believable if you had a reliable source. Call me a doubting Thomas. Losing $120M on such a small amount of energy is pretty amazing – especially since the Energy marketing group which is responsible for energy exports lists $40M in profits on the Nalcor website (p30 of the 2014 website).

      Without référence to a source the reader has to choose between your word and Nalcor's annual report.

  17. Bruno, a new day, more fresh snow, and an engaged mind, on MF. Yes, my comment to you was somewhat mangled…..see if can be more simple. I would like to think we are the same side :MF is no good, chop it up for fire wood.
    Renewable energy is good, good for the environment. If no MF for the island, then what: how to meet our needs.
    We agree that MF was not the least cost. So far so good, you agree, I assume.
    The Rock is now 89 percent renewable, some 11 percent from thermal, oil fired. How to take that 11 percent to near zero:that is the question.
    Least cost is combination of things. Some new renewable supply from island resources, as well as reduced demand through conservation. Are we still on the same page….. I think so.
    Renewable local supply can be hydro, wind, solar and storage. We still agree I assume. A cost and technical analysis would determine the best options.
    In many jurisdictions, energy efficiency is considered a resource. It is not technically conservation in the traditional sense, but leads to conservation.It can be very important, and many would argue, the most important, as being a big part of the least cost approach. I hope you agree.
    Conservation results in demand reduction and reduces the new generation supply quantity, as well as improves reliability, and less demand on hydro resources, and reduces transmission losses etc, through demand reduction. Therefore conservation is very important. There are many measures for conservation, some 100 different measures, some are much more cost effective than others. A cost effective and technical analysis would determine the best options. Are you still with me…I hope so.
    Our differences may be as to which option and measure is better than another, I expect. This is not easy to agree on via a chat like this, but should be subject to evidence based data….I think we would agree…
    This is a general outlook of what is needed if MF is put on ice.
    Do you agree, or disagree,with some or all of this.
    Winston Adams

  18. This to advise Maurice Adams that Mr Lahey responded on Dec 14 to Maurice`s comment on the 12 th. Perhaps Maurice has not seen it and may wish to respond……. in this piece, as older posts are harder to search.

  19. Every one gone Xmas shopping, I guess
    Bruno, I thought you might find this interesting, as to winter temperatures
    For St John's area :average for 30 years:coldest month is Feb. These are Feb data: Source is Gov of Canada records.
    Daily avg is -4.9C
    Daily avg high is -1.1C
    Daily avg low is -8.6C
    Extreme low is -23.8C

    Are you in Nova Scotia…inland or by the sea?
    We have rather mild winters, due to the Gulf Stream. We have had +16C in Feb. If you are inland NS our weather is likely tropical compared to yours!
    Winston Adams

  20. BERNARD,

    (My reply to your earlier Dec 14th comment):

    Our leaders' are pushing us toward a self-created fiscal cliff — created in no small part by their continued blind-as-a-bat fixation on this Muskrat Mess.

    Step one is to stop this self-created Muskrat Mess.

    Now is not the time to add to our debt and to further negotiate away Labrador's resources.

    As to the feds…..

    With the additional $2.9 billion loan guarantee, they continue to be enablers of the mess we are in.

    "Friends" (whether they be federal or provincial) do not encourage and/or enable friends to take actions that are not in their own best interest.

    Maurice Adams, Paradise

    • Seems most all are in agreement of the need to halt MF. But how? As to inquiry into wrong doing that got us into the mess…. that can take years. And we don't have years. As Dave Vardy says, with the schedule setback and winter setting in, this is an opportune time to put this on ice for a proper review. With the House closed, even a formal request would take some time. Seems the only ones with real clout is the water defenders. They risk all….and are insufficiently supported from people from the island. The stability of the North Spur should be a major concern for them, and is. But the so called main media has chosen to ignore this situation. Shame on them. If there is a failure and fatalities, they will be all over it.The local media there, The Independent, the journalist has been both charged with a crime, and nominated for a human rights award. I expect them to again bring up the stability of the North Spur, but have seen nothing on it recently.

    • Maurice,

      Interesting comments – I have already explained this but federal guarantees had two effects – it comforted the average NL tax and ratepayer that the project was legit

      It also allowed Premier Williams to avoid scrutiny.

      The question of whether NL is better to proceed or stop is a surely a legitimate question

    • Maurice, we must not discount the considerable political pressure Nfld/Williams did put on the Feds.

      Plus, I'm affraid, any contributions to "sticking it to Quebec" is politically beneficial, including for the Feds.

    • No question, we are, ourselves, principally at fault (and continue to be). However, that does not excuse the federal government from its complicity and enabling role, without which we likely would not now (re Muskrat) be in the mess we are in.———- and the tragedy continues. Maurice

    • We have no revolutionaries in Nlfd. We suffer the abuse from the British, from Canada, from the merchants, from the politicians. We have a few brave souls in Labrador who get charged for the purpose of intimidation. The main media is part of the elite who ignores the seriousness of the situation, the subject of this blog.
      Revolution is what Bernie Sanders called for, but revolution in thought, and by peaceful means.
      The tragedy continues:Muskrat Part 2, each part 7 billion. it amounts to 280,000 dollars for energy to fire up each new house needing 25 kilowatts total load, for Muskrat Part1, another 280,000.00 for Part 2, and there may be a part 3.

    • Any and all who have elected a Liberal MP, (All ridings?), have a direct pipeline to the Federal Government, including one cabinet member; What are the Feds actively negotiating (Que/NL) and what is justification to continue financial backing for the Boondoggle? This is on your watch now.

    • So the Feds "fooled/helped mislead/hoodwink" Nfld in providing (partially) the requested loan help; therefore they now bear responsability for the whole MF disaster… Not sure the feds knew what they were in for…

      (I'm just stiring the pot here, I do agree with the term "enabled" tought)

    • The feds had responsibility for the environmental assessment. The recommendations (with federal complicity) were all but ignored.

      Clearly, I said that we (not the feds) were/are principally at fault.

      Let's not misrepresent what is being said.

      Stir the pot, yes. But there is a right and a wrong way to do so. Maurice

    • Maurice, I agree that the word comfort is not well-chosen. However, I think you know what I mean. The feds lulled the NL citizen into a false sense of security, not just then, but recently as well. How could Harper provide $5B in debt guarantees while basically ignoring the conclusions of the federal-provincial environmental assessment and above the objections of the PUB? More recently, how can they provide an additional $3B in guarantees without any idea what the total cost will be and how long the project will take to be completed?

      All too often we hear that debt guarantees are free. Debt guarantees include an implicit promise of financial subsidy in the case of difficulty.

      NL has its share of responsibility but as it stands, the poor NL tax and rate payer is left with the bill. As a Quebecer and a federal taxpayer I don't like the idea of the feds turning guarantees into subsidies. However it is the right thing to do. The feds bear a significant share of responsibility for this mess, why should NL bear the full cost?

    • The 'subsidy' issue is, at least somewhat, from my perspective a different and less important matter than the very fact that the feds enabled this mess to happen in the first place (and to that extent, the feds continue to share both the blame and the responsibility). Maurice

    • With all this said repeatedly folks ,your own MP is the only avenue you have left to STOP the funding which is taking you the citizen/ratepayer, further down the path of no return. I am a Newfoundland "colonial boy", retired in BC. I have contacted my NDP member to intercede in the continued Fed Lib financial support of the Muskrat. Good Luck and Seasons Greetings to you all.

    • Maurice, I am not 100% sure you understand my point. I know what you mean about the subsidy being acceptable under certain circumstances – for example in the case of a well thought out, thoroughly vetted project in which you believe in. The federal guarantee will reduce the cost of the project. If things turn sour then at least you can point to the extensive due diligence that justified the initial investment. The problem is when the federal guarantee enables an ill-conceived, poorly evaluated project to proceed. I think that is the case with MF. Let me join Robert Holmes in wishing you good luck and Seagrams greetings lol.

    • There are also other negative implications with subsidies…

      US electricity producers have been
      scrutinizing HQ costs structure very closely for possible subsidies / dumping (in regard to HQ's US export sales). They are looking in anyways to shut the border to HQ.

      Not sure how Nalcor will fare when it'll attempt to dump power in the US market, at 20% of its costs…

  21. Vardy says to assess the economics of bringing (Churchill Falls) power through on the newly constructed transmission lines.
    Assess, yes, but they are not yet constructed. What percent is complete, and no solution on the popped wire on the conductor, And how much of Soldiers Pond is Complete. That is a major station, And there is the convertor stations on both ends. And at Soldiers Pond, two large synchronous condesners to go there. These are like the large generators at Holyrood.
    Synchronous condensers are needed to support the voltage that is necessary at times. The existing large generators at Holyrood are needed for the same purpose. These are not to be retired.So we need 4 or 5 of these large suckers for voltage support for the DC line.
    This is a complex system and considerable expense yet to finish….and questionable reliability according to Liberty, also, and for what purpose if little of this power is needed.
    I very much support what Vardy says, but assess the need of that transmission line before assuming we need it and keep spending on that. Whether we need it depends on what we do to reduce energy use. Up to now, do nothing is the plan.
    But Russell at the Telly is now on to the wisdom of demand management, as per his Editorial today! So watch out…. plummeting demand will bring them to their senses quicker than our MP… would wish……Takes a while for Russell to get his pen in gear. He plans to take the lead in this debate from Uncle Gnarley, just watch.Nothing like competition for what is newsworthy. Expect big editorials from Russ in the new year. We are at a tipping point, and Russ,(the elite) according to Hollett, has been sitting on the fence, silently watching this sinking ship.
    Winston Adams

  22. Ontario now buying power from Quebec for 5 years at a rate of 5 cents per kwh. Muskrat costing somewhere between 51 and 62 cents delivered to the Avalon. And Quebec is our enemy!
    Who should we thank for Muskrat…..what a wonderful plan. Well thought out!

  23. David Vardy suggests that Russell at the Telegram is perhaps the only one who can take the issue to the main media. The issue being whether Muskrat should be put on ice subject to a comprehensive review of the wisdom of proceeding now or at a later date if appropriate.
    Can Russell do this…..maybe yes and maybe no.
    True, the delays on schedule, the continuous problems, the escalating costs, the reduced demand forecast, are all reasons to say this is an opportune time.
    The questions to whether this is practical , to halt the project raises serious questions;
    1. Just what tare the legal implications, especially the committments to Nova Scotia.
    2. What are the unknowns and knowns as to reliability of the transmission from Labrador, as mentioned by Liberty Consulting. Also, the stability issue of the North Spur.
    3. If the project is halted, what is the way forward to address our energy needs, especially the potential of demand reduction.
    4. What is the implication for rates to the ratepayers with the options of halting Muskrat now, or spending another 6 or 8 billion for completion.
    5 What is the implication of very high rates on driving energy consumption very low, because customers DO have alternatives.
    Can Russell make a logical argument to the people on the complex subject without having sound advise on the various issues. I would suggest he cannot. He can raise the questions, but not give sound conclusions. Does the Telegram have the resources to pay for such advise. Maybe not. Are there professionals out there who would offer their advise for free to Russell, legal, engineering etc…… maybe so.
    Is Russell up to the challenge……he has been a frequent commentator on Muskrat, with concerns early on. As Russell is a respected journalist, I would like to see him take up David Vardy`s suggestion.
    Winston Adams