“We just want to clarify, there
is no way ratepayers in our province could pay or should pay for the burden of
Muskrat Falls.” The province will be “separating the
ratepayers from the Muskrat Falls debt.” It is a “tremendous burden… a debt
issue, not a ratepayer issue.” These are
all direct quotes which the CBC attributed to the Premier in a by-election
kick-off for Liberal Candidate, Paul Antle, in the District of Windsor Lake.
say? He said, “we are not
looking at increasing taxes for people in Newfoundland and Labrador.”
be spared responsibility for the $12.7 billion Muskrat Falls debt, who is going
This Post is not seeking an
answer to this question today, though the Saturday Telegram’s follow-up to the story has Ball backtracking. The Premier indicated that his plan “does not require wholesale changes to the project’s financial structure” requiring a transfer of debt from Nalcor to the provincial government. Indeed, the contrary is true. Taken on their face his remarks were an explicit repudiation of the Power Purchase Agreement (PPA) – that’s the “take or pay” deal which hooks ratepayers for the full cost of the project.
A second issue arising from the Telegram article (kudos to Reporter David Maher) is that Ball’s comments caused DBRS, a Bond Rating Agency, to seek clarification from the Government as to its rate mitigation plans. Having done so, DBRS vice-president Travis Shaw stated that the firm “still expects the Muskrat Falls related debt to be collected from electricity rates…” This suggests that the Department of Finance told him that Ball’s promises were nothing more than election talk which, in turn, allows DBRS to maintain the fiction – for bond rating purposes – that Muskrat Falls is self-financing; in other words, that the revenue required to service the project will all come from ratepayers.
The Premier also gave some (verbal) undertakings to the public last
Wednesday which are critical to any resolution to the problem Muskrat
represents. Those may have more practical considerations than any flight of rhetoric.
That the Public Utilities Board (PUB) “will be brought back”
to set “consistent, affordable” power rates.
That there are a “number of options” on the table, which will
include talks with the federal government.
Falls] will not be known until 2021, 2022, so I just want to add reassurance to
ratepayers in this province that they will not bear the burden of Muskrat
take each in turn:
The PUB was prevented — by the Tories — from assessing DG3
estimates for the Muskrat Falls project. David Vardy and others have advocated
that the PUB should be returned the right to review the project based upon a
“prudence” evaluation — an appropriate benchmark employed by rate-setting
agencies like the PUB — to determine the amount of capital, if any, expended on the
project which is legitimately the ratepayers responsibility.
The Premier should be asked to declare in writing — before the date of the
by-election on September 20, 2018 — that when the House of Assembly opens for
the Fall Sitting, he will table legislation with the effect of directing the
PUB to perform this review. The Premier need not wait for the Muskrat Falls project
to be finished, having already confirmed that the current cost is excessively
burdensome for ratepayers.
The Premier has (finally) acknowledged that the options to
deal with the MF issue will include talks with the federal government.
been dealt with extensively on this Blog. It is perplexing that the Premier has
attempted to spare the Prime Minister from a serious error of
judgment by the previous Conservative Administration under PM Harper.
responsible for shoddy analysis and for having given Nova Scotia veto power over
the Federal Loan Guarantee, which that province used to overcome a pliant
Nalcor (see links below for full explanation).
Crosbie — ought to be able to do the math and realize that, under no
circumstances, can the Province shoulder the burden of the $12.7 billion Muskrat Falls debt
without seriously undermining basic services, and dealing a blow to fundamental
aspects of civil society in this province.
For both those reasons, the Premier’s undertaking is late but still necessary.
The Premier now should, this Fall, lay out – publicly – his plan for eliciting Federal support and agree to report to the Province by March 31, 2019 on the
progress he is making.
Federal Complicity: The Untold Story of Muskrat Falls
A Debacle and Federal Governments Role in it (Part II)
This item bears repeating. The Premier was quoted stating: “The
final cost of [Muskrat Falls] will not be known until 2021, 2022, so I just
want to add reassurance to ratepayers in this province that they will not bear
the burden of Muskrat Falls.”
words. Is the Premier suggesting — and who would be surprised — that overruns
beyond the figure of $12.7 billion can be expected? Would the Premier confirm
whether or not this is the case?
down the road consideration of the sum of capital costs which will be borne by
ratepayers. If that is the purpose of his rhetoric, I expect that the
voters of Windsor Lake will not be happy.
his Administration took Office, the Premier has not handled matters well when
they pertain to Muskrat Falls. Likely many in the Liberal Party wish he was more skilful and more forthright,
Premier was unwise to make his lofty claims directly on the heels of a
by-election. However, he can cure any cynicism that his remarks have evoked
simply by committing his undertakings to writing, complete with deadlines for
when the public can conduct its assessment of whether he has performed as he
such a written confirmation, last Wednesday’s rhetoric was likely just that.