BIG BALL PROMISES: LET’S GET THEM IN WRITING

“We just want to clarify, there
is no way ratepayers in our province could pay or should pay for the burden of
Muskrat Falls.”  T
he 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.


What else did the Premier
say? He said, “
we are not
looking at increasing taxes for people in Newfoundland and Labrador.”


As others have asked, if both ratepayers and taxpayers will
be spared responsibility for the $12.7 billion Muskrat Falls debt, who is going
to pay?


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.


Let’s begin here. 
Photo Credit: The Telegram

Again, quoting the CBC, the Premier affirmed:


      1.     
That the Public Utilities Board (PUB) “will be brought back”
to set “consistent, affordable” power rates.


      2.    
That there are a “number of options” on the table, which will
include talks with the federal government.


      3.     “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.”

Let’s
take each in turn:
      
      1 .     
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.
  

      2.    
The Premier has (finally) acknowledged that the options to
deal with the MF issue will include talks with the federal government.
The complicity of the Feds in the Muskrat Falls fiasco has
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.
Remember that the Feds were not just enablers; they were
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).
Secondly, apologists for Muskrat — including PC Leader Ches
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. 

He should also have the courage to describe the support he has received from the seven federal MPs, all of whom are in hiding on the most critical problem the province has ever faced.
______________________________________________

Related:
Federal Complicity: The Untold Story of Muskrat Falls
A Debacle and Federal Governments Role in it (Part II)
______________________________________________

      3.    
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.”
For me, an ominous cloud of scepticism hangs over those
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?
If further cost overruns aren’t the issue, he can only be kicking
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.
Since
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,
too.


The
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
promised. 

Without
such a written confirmation, last Wednesday’s rhetoric was likely just that.
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.

TEN YEARS AFTER MUSKRAT FALLS SANCTION – We will have to think abandonment of the Labrador Island Link

Put simply, whether Muskrat Falls come online or not, it cannot be relied upon. Without admitting their gross negligence at the start, Hydro is essentially saying that that we should try to salvage Muskrat Falls at an undefined cost and for for however short the duration it might operate.

THE PROOF MUSKRAT FALLS IS NOVA SCOTIA’S PROJECT

The substance of Hydro’s mission is to satisfy the contracts with Emera to get large amounts of power flowing into Nova Scotia for the betterment of that province and its ratepayers.  The Island could easily live without the Muskrat Fals project and in fact, other than for the onerous Emera contracts, NL ratepayers would be best off if it was abandoned and left to rust.

FIRST YEAR OF OFFICIAL ENERGY DELIVERY NOT QUITE WHAT EMERA BARGAINED FOR

PlanetNL52: Happy Anniversary Emera on 1 Year of Official Energy Delivery Not Quite What Emera Bargained For Despite all the bad news related to Labrador Island...

75 COMMENTS

    • Never spoiled a ballot and never will. I'll give Ches the vote this time round as I'm in the Windsor riding, see how he does for a year, and then make my decision for the 2019 election PC/NDP/Independent. Dwight had his chance and didn't live up to expectation (wasn't even expecting that much from him to begin with and he still failed).

      -not voting Liberal

    • @Robert, it was less about what Dwight was offering and more of not rewarding the incumbents. So, Dwight is currently the incumbent, and I'm not pleased with what he and his party did and didn't do, hence "not voting Liberal". Ches will have a year to prove himself, if he get elected, then I'll decide if he deserves a full term. Personally, I try not to vote for a politician more than once unless they do a decent enough job and warrant a 2nd kick at the can and the indexed pension.

  1. Yes.

    Kudos to The Telegram and also to David Maher for his recent reporting about government and our other political parties not taking on the enablers of this Muskrat fiasco.

    And the Tele reporting was not out of step with my letter sent to the Tele two weeks earlier ("We're having the wrong argument about Muskrat Falls") — and published in the same Weekend issue.

    Wherein I wrote, in part, that "While there is no silver bullet, and while there is much navel-gazing focused on the N.L. tax/ratepayer bearing the full brunt of this carefully crafted fiasco, there is no evidence that our federal representatives, our provincial government and our brightest minds are otherwise putting up a fight."

    Who is holding the federal, the Nova Scotia governments, and Emera to account?

    No one."

    Any just solution to this national-provincial fiasco requires/demands federal participation — and the this province's leaders must demand no less.

  2. One of John McCain speeches, a line like this :"My friends, it is of no value to talk about scapegoats when we need solutions".
    So, is accountability by the Feds, NS , Emera, or even Fortis,or DW and the Tories, Ball etc, or all the Nflders who favoured MFs,are these now part, or all scapegoats? How to separate scapegoats from solutions? Ball has offered no solutions. Both Ball and Crosbie talked of future discussions with the Feds,(a part solution or scapegoat?)Heracles would say all accountability is with Nfld, and not with the Feds, but suggests a reset of another 25 year extension of CFs low rates to HQ a solution.
    A solution is likely multifaceted, not a single item. If so, what is the answer? Will Ches have a big list of solutions in his platform? Or Antle, who is an engineer, I believe? Or does he hide behind the weasel words of his leader , Ball?
    And welcome back Codder, I mean Bruno. Indeed,Is a fixing of our corrupt political system a part of the solution?
    Winston Adams

  3. Ian McMaster, a Doctor of some sort, and a teacher at our trade schools, I think, (and maybe not a good one), has a letter in today's Telegram, confirming the wisdom of MFs choice for sanction. It is based on mathematics and economics. That Holyrood uses 18,000 barrels of oil a day at full load, but assuming about 67 % full load year round, it makes great sense to do MFs
    Now Vison 2041 has some wonderful colorful charts under the heading Holdrood(found by first clicking MORE). It tells a different story.
    McMaster used the same fake news as Jerome Kennedy and others in 2012. The math and economics was False assumptions then as now. McMaster seems to want to lead Leblanc and Nflders to the conclusion that the false assumptions for sanctions were mere errors that were reasonable at the time. Nothing to see there folks.
    Winston Adams

    • I just read the Ian McMaster letter in the Telegram. Isn't math wonderful. Long story short, the last line in the letter says "I must emphasize that the intent of the Muskrat Falls project was not to capitalize the cost of the project on to current and future electricity rates but to capitalize the cost on to the savings of not using the Holyrood plant. There should not be any increase in electricity rates as a result of a transfer of electricity from the Holyrood plant to Muskrat Falls." If we ignore the latest campaign ready words about no rate increase from Dwight Ball, then somebody's math is wrong.

      – not voting Liberal

    • FOR THE RECORD (based on my recollection of Nalcor emails and other data in my files):–

      Total Holyrood capacity (prior to the added 110 MW turbine) — ~ 4,000 GWh. Net capacity — ~3,000 GWh

      10-yr (2006-2015) average yearly total island energy used ~ 8,000 GWh

      Holyrood's annual average portion of total energy used —– ~ 13.3 % (~ 1,050 GWh —- ~25% of Holyrood's total capacity and 33% of its net capacity.

      So, Holyrood is a far cry from operating at capacity (18,000 bbls a day, or the 2/3rds that McMaster claims).

      One Nalcor email advised that Holyrood over a 10 yr period operated at capacity for less than 6 days a year (on average) —- 1.6% of the time. And not at all in some years.

      Furthermore, over a 10 yr. period oil cost for Holyrood averaged $92 million a year (and if I recall correctly, that included one or more years when oil prices spiked).

      In addition, Holyrood has no impact on 92% of the province's GHG emissions (by far transportation and industry are the biggest contributors).

      Mr. McMaster is certainly entitled to his own opinion [expertise (?)], but not to his own facts.

    • HRT uses 3 million bbls of oil each year on the average McMaster (not of math apparently) is off by nearly 10,000 bbls a day – did he mean HRT was projected to use 18000 bbls of oil a day due to Nalcor's insane demand forecasts used to justify the project? GHGs won't be reduced with the Liberals two-tiered rate scheme, industrial rates will still be many folds smaller V the 1000KW residential (22c kWh) cost and the 9c kWh residential rate above 1000KW a year.

    • Why did McMaster invent a new way to cost out Muskrat when the PPA is the obvious black and white cost? The real number begins at over 800 million per year and goes up from there. Gotta question whether The Telegram should print such obviously wrong info.

    • I guess it is difficult for the Telegram to be fact checkers and censor. Last year I had commented that even when the editor Russell would write a piece critical of Muskrat, the troll John Smith would write perhaps 5 comments online as to Russell's piece condemning it and saying what a wonderful project MFs was. Shortly after my comment, the Telegram blocked all comments.They got rid of John Smith but also those who agreed with Russell.
      So with McMaster, either the Telegram should fact check ( which can be difficult sometimes), or leave it to others. But too often the misleading information does the job intended:to mislead the public. This also discredits the Telegram to let such things pass. Maybe they will take notice?
      Winston

  4. Mercy, Mercy, even Andy Wells now takes to the Tely with a letter, and his 2 cents worth on ELASTICITY ( I said it was important and too long ignored, except by Dave Vardy. 6 years for Feehan to do a report, and at what cost, I estimate 25,000.00), and heat poverty that awaits us.
    Andy favours default on the 13 billion MFs fiasco. He cites Ches Crosbie Tom Orsborne and Paul Lane who makes the excuse that MFs was a mere mistake. Remember Andy and Paul almost came to blows on the PUB parking lot recently, captured by the TV cameras.
    Andy in not waiting for Leblanc to say his piece, and seems to agree with Bruno, that politics is the root cause, and all parties alike.
    Winston

  5. There we have it; Final Project cost will not be known for another 3 years or so. The obfuscation continues. Stan as Project manager is being permitted to extend contract procurement for some time to come. Any talk of rate mitigation is without "Cost to Complete Certainty". The regime is still empowered to accept added costs on the Boondoggle. Watch carefully as the General Inquiry unfolds, in particular the Project Cost forensics. The public remains in the dark and camouflage with respect to project actions and management continue. Maybe a quick transfer of the stranded assets to the Big corporation(s) will deny public disclosure forever. Who is negotiating with whom to "get er done?"

  6. Just want to make a brief comment on our politicans, both federal and provincial, that we will not engage the Feds to bear their fairshare of the boondoggle, because they already did their share for muskrat by providing the loan guarantee. Think Shamus was one of them. Like the prison guard saying we are not responsible for the prisoners death, we just made sure we gave him enough rope and tied the right knot for him. We are in the clear, even if it is all on video, including him asking for the rope, and approved by the minister of justice. That kind of assisted suisuide is still illegal in this country. If you read UG' s referenced and previously posted correspondence, between both levels of governments, documents and analysis, a clear anology can be made. It will be settled on good political terms, morally and ethically or in the courts.

    • Now is the time (and leading up to the next provincial and federal elections) for our provincial government (and opposition parties) to seek and obtain firm commitments from their federal counterparts as to what they are prepared to do to fulfill their obligations that aided and abetted, and through their collusion with Nova Scotia and Emera, enabled this MF travesty to occur.

      Do we have politicians or sheep?

    • "what they (Feds) are prepared to do to fulfill their obligations that aided and abetted, and through their collusion with Nova Scotia and Emera, enabled this MF travesty to occur"

      Wow Maurice!!! This time accusing the Feds of colluding with NS/Emera (agains NL?)!!!

      WOW, I'm really not sure the Feds knew what they were getting into when they obliged and provided NL this LG… 😉

      Just stirring the pot again (I know, you like when I stir the pot if I recall…)

    • Ex military: recently announced a road project in southern Quebec aver 500 million and the feds paying about 40 %. It was touted as road for access to Nfld, but terminates in Quebec near Nfld, but all expenditure is in Quebec. Another announcement cites 1 billion to be spent on job training etc in NL, but this over many years, and was old programs refurbished so little new money, but stated will aid rural areas for trades but including for engineers and lawyers, so a lot of PR and a lot to do about nothing.
      Now should the FEDs absorb some of the fiasco cost? Certainly, even more than the 40 % for Quebec roads.
      But also the FEDs should finance most of new capacity infrastructure for Quebec to get its surplus hydro to Nova Scotia and the Atlantic region, would you disagree?
      Winston

    • Winston:

      I believe Fed's overall spending should be fairly distributed across the country (transfer payments, equalisations payments, grants & contribution, contracting, subsidies and why not LG!!!)

      Including the examples you provided above, the Feds OVERALL expenditure in Quebec is still less than its fair share (versus its share of the population).

      Etienne explained that very well some time ago, and its figures matches the partial stats I had personally access to – from within 3 different federal departments. (FWIW by example, National Defense spends about 14% of its budget in Quebec).

      The way I see it, while Quebec is slightly poorer than the Canadian average (per capita revenues), the Feds still find a way to proportionally spend less money in Quebec than elsewhere.

      So the Feds contribute to make us poorer and more dependant – so you guys can claim we receive more equalization $ than everyone…

      I'm just saying, from a Quebec point of view…

    • Fairness in FEDs contributions is far to complex for me to assess, and just noted the two recent ones in the media.Maybe Quebec makes better use of contributions, like the Quebec roads upgrades not a boondoggle, whereas MFs is. But your roads to these remote area, and hydro power infrastructure for the Atlantic region to NS seems like good nation building projects, and all of Atlantic Canada should benefit, worthy of FEDs contribution.
      As to MFs , NS the winner, and Ont and Quebec received billions in contracts, so also a winner. So the FEDs enabled the boondoggle, surely, even though at Nfld govn request. As the antiwar song goes, as to Nfld, When will they ever learn? (Where have all the flowers gone)
      WA

  7. Colluding? Yes, I think so, so as to get what benefited Nova Scotia and Ottawa (Re cheap power and reduction of coal generated power for NS, and for the feds to cater to NS politicians and help meet its carbon reduction targets). And of course a huge business advantage/benefit for Emera.

    Didn't the feds ignore some of the recommendations of the Joint Fed/Prov. Review Panel and in that way enable (improperly) this fiasco?

    • So the Feds would have favored a financially catastrophic boondoggle so to help NS politicians meeting carbon reduction targets! (So now, the Feds believed MF would get completed and operate sufficiently to provide for the whole Emera block?)

      Interesting concept. Is so, wouldn't it 'been better to just let HQ sell NS clean hydro for cheaper, and way earlier??? NS would have met this carbon reduction big time, way faster!!!

      Or instead, maybe the Feds just bought in this "stick it to Quebec" / Anglo-Saxon route…

    • My reference to carbon reduction targets was referring to national targets (though my language was unclear).

      No, I don't think the feds believed that MF was a financially catastrophic boondoggle — they just failed in their fiduciary/due diligence duty.

      And there is no way NS could have gotten the deal from HQ that they got from NL.

    • So the Feds believed that the MF + the Anglo Saxon route would have provided overall cheaper power to NS – and not care about NL costs? It doesn't make sense to me.

      That's why I don't really believe in this NS/Emera collusion concept.

      What I believe is that DW/Nalcor just fudged MF's business case big time, and sucked in the Feds (and everyone else) under false pretenses, in addition to using the usual "victims" political pressure trick…

    • And compounding the whole mess; Nalcor's total incapacity in managing such a project.

      So I'm not really surprised the Feds got sucked in. (Plus the idea of sticking it to Quebec & Anglo-Saxon routing must have pleased quite a few more than you would believe…)

      This LG contains such pretty robust clauses that other avenues will be explored first. Including those win-win solutions we already discussed.

      I definitely don't any "free" bailouts in sights.

    • The feds also (conveniently), without doing their due diligence and without following JFPR Panel recommendations, that is, it was in the feds best interest to also buy into DW/Nalcor's so-called business case.

      But any fool's objective assessment (by a credible/responsible federal government) would have exposed the flawed premise about MF's need, affordability and risk.

      But the feds did not do their job and hence they hold a fair and just responsibility for this fiasco.

    • I agree Maurice. But who will raise the issue of Fed complicity in the House, and before the next Fed election? Lib/PC cannot be relied upon to do the honourable accountability exercise. Leaves only people like you and I, and maybe the Media.

    • Well, it definitely happens that governments/banks lend money when they should not have in the first place. But those governments/banks still don't lose their recourses, due diligences or not.

      If, in order to obtain this loan (or LG), the borrower lies and fudges the books, then we may add the notion of fraud.

      Even when adding the political dimension, I don't see how Canadian taxpayers/voters would accept to be considered "on the hook"/"responsible" for this boondoggle.

      Imagine any future federal subsidies, LG etc. that can be interpreted as having "enabled" (indirectly or not) the go ahead of a project that ultimately failed. The feds would then be on the hook for this project, without recourses? Even when the borrower/defaulter (or fraudster?) has other assets?
      ==> Well, the feds would just stop the grants, contribution and subsidies business altogether! (Which could be a good thing actually:-) ) <==

      Around here, accountability is the big thing. When it lacks/is absent, the whole pyramid just crumbles and falls apart. I also review federal grants and contribution programs – there are no ways the Feds can be held accountable for the failure of a project it first "enabled".

      Also, if we inches toward NL insolvency to the point of forcing a Fed intervention, there are no ways the Feds will let your irresponsible NL politicians repeating those boondoggles again and again. (And you know what this is called – you lived it after your terrible human/financial slaughter of WWI; the loss of responsible government)

      From an accountability standpoint, legal standpoint, ethical standpoint or a political standpoint, I don't see how this notion of MF "free" loan write-off can fly.

      PS: Despite my rather severe wordings here, I'm sure you realised my profound respect for all Nlers. (well, maybe not so much toward DW).

      Amongst other things, I'm still particularly taken by your immense contribution to both Word Wars, and all the kindness/support/help you brought to those diverted 9/11 passengers

    • Well we can only do what we can. AT least the media (Tele) recently raised the issue of discussions with feds (and thereby got Ball to make some weird/inconsistent statements), and that might be a start (even if the Tele was stoked to initiate a discussion on the issue by my letter sent to them 2 weeks earlier).

      I think as elections 2019 approach and the enormity of the MUskrat rates sink in there will more and more public/media pressure/attention paid to this mess)

    • EX, I believe the then NS energy minister is on record as saying that Nalcor knew that MFs was NOT the least cost option for Nlfd ratepayers. Also we were already 85 % green on the island then before sanction, so our problem an easy fix.
      And free power for NS for 35 years, they supply the extension cord, and give us ownership of that extension cord when it is almost in need of replacement……I have too much respect for HQ to think they would do that or offer even better terms, as you suggest HQ could do!
      Winston

    • Winston,

      Just curious, what's the total overall cost of this "extension cord" (capital costs, interests, maintenance, "cord" project risks etc.) over 35 years?

      Now divide that by the amount Hydro carried over it during the same period. Aren't those "super wheeling costs" be in line with the projected fudged MF hydro costs? Was those resulting hydro costs below market value?

      If the resulting costs are in line, then that would have been a fair deal – even when knowing that MF was not the cheapest option.
      (==>I agree however that indeed Nalcor took over the RISK of the remaining MF project portion – which it did not have the competence)

    • In others wordings, how much all this "free" hydro will cost Emera, once we take into account the extension cord TOTAL costs over 35 years (and the considerable transmission losses)?

      Is it 5 cents? 4 cents? 3.5 cents? If so, it's a fair deal when you take into account the extension cord project risks.

      Otherwise, Emera would have been better off to just buy it from HQ – without incurring any extension cord project risks.

    • Sorry Ex, the financial questions I would rather someone else to address. The Maritime Link being initially 1.5 billion then up to 1.7 I believe, so no free power, we understand,but no revenue for Nfld either, but a lot of power going out, that we may yet need here on the island, if MFs fails to operate.
      As to transmission losses: most think MF power is going to NS, but not so. Nfld low cost island power is going to NS, developed since the 1960s. Transmission losses from MFs about 8% coming to Soldiers Pond, so as to capital cost of 12.7 billion: say 1 billion dollars spent for heating up the atmosphere, this waste of energy in long distance transmission. Now to NS from Ndld west cost, about 1/3 the distance, so I assume not more than 4 % transmission loss. So about 68 million in transmission loss cost as to capital cost.
      ML at 500MW capacity and LIL at 900 MM capacity. My figures suggests ML transmission losses is about 12 % of MF transmission losses, if compared on equal capacity.
      So again, we got shafted by not shipping MFs power direct to NS.
      Maybe PENG2or 3 could verify my figures, as this a quick 10 minute analysis. Perhaps Ed Martin and Gil Bennett took 2 minutes,and signed off on it.
      Winston

    • Again Ex, would HQ or the people of Quebec sign off on such an arrangement, as to transmission losses, and then add the insult of worse reliability form Labrador power, plus now NS can add more wind being tied to our island hydro. These are 3 technical issues and for Nfld: Dumb , dumber and dumbest is Martin and Bennett, I suggest, instead of world class.
      Winston

    • Ex-Military Engr:

      Give or take, try in the neighborhood of 2.5cents/kWhr – I am going by the $2B cost and about ~200mWhr guaranteed irrespective of if/when the extension cord fails…. Qualified in that I don't have a lot of knowledge of the Emera NL contract details.

      From my POV(and I guess to be tested in the courts at some point), I don't think there is risk to NS – NL have to provide or compensate accordingly, I think it is possible we might have to buy power in the US market to feed back to NS is the HVdc lines drops so we can maintain a stable supply on the island..

      PENG2

    • Thanks both Winston and PENG2 for your replies.

      2.5 cents is indeed on the low side.
      In this extension cord, NL definitely got a much bigger share of obligations and risks than NS, and also loses the benefits associated with its current hydro stability (allowing Emera more wind generation)

      Still, despite only paying about 2.5cents, it still came with some "cord" project risks. So 2.5cents might still be fair game from an Emera point of view.

      (I agree with those depressed market rates, no ways Nalcor will ever make it up via exports – even using the original fudged costing model).

      I suspect we can also conclude that this underwater routing was never to be cost effective anyways – considering overall costs, short cord life and overall risks (even if costs were shared fairly).

      PS: Winston, I believe there are more transmission losses with this underwater line than an overland 735kv, isn't it?

      (Typed from my mobile, sorry if doesn't make any sense)

    • With the same conductor, the idea of the higher the voltage, the lower the transmission loss, I expect the 735 kv would be better and lower losses per mile, even allowing for some advantage of DC over AC, but the DC is much lower voltage.
      Winston

    • Re Ex military @ 16:53…..Nfld immense contributions in both World Wars,and also the feds never accountable as enablers of boondoggles.
      So back to the time of WW1 say: a boondoggle then underway in Manitoba, the rail line and planned terminal at the mouth of the Neslon River, called Port Nelson. THe purpose was political, to satisfy the Prairie provinces who wanted to by pass the route of shipping grain via Montreal then to Europe. So, the Anglo Saxon route out of Hudson Bay, said to be Least Cost, sound familiar?
      1000 men ( many who were Nflders) working for 5 years, a total failure, having to abandon Port Nelson and relocate to Churchill Manitoba.
      Now as I have records relating to this, this seems to have been totally a federal project, as to cost and design and construction, but I am not sure what Manitoba was held responsible for, as to that boondoggle. Yes, going back, but not like the feds have never played such games before and paid the shot, or most of it. Perhaps Ex Military would know more as to what Manitoba incurred as to that boondoggle?
      Winston Adams

    • Hi guys,

      About DC vs AC : loss is directly related to voltage and it is easier to get high voltage on DC vs AC. 735 is of the highest voltage for AC but over 1 000 is relatively frequent in DC.

      Second point for DC connections is to protect HQ's grid. Remember the gigantic blackout that hit all of North-East Amercia years ago ? HQ has been unaffected because our grid is not synced with that one and as such, is protected against such a domino effect. This is why HQ wants all its inter-connections to be DC : to be sure an incident on someone else's grid will not propagate to QC.

      Another point is that to sync two grids, like HQ's and the insulated one that is on the Rock, you basically need to stop one of them. So that would translate in powering down Newfoundland, for the time to sync their installations with HQ's grid. A DC link avoid that.

      So many reasons for a DC link instead of AC…

    • Winston, what a coincidence as I was recently interested in the Churchill rail/port history. I indeed read about the same things you mentioned.

      About why we went from Port Nelson to Port Churchill:

      "The silt load of the swift waters of the Hayes and Nelson Rivers, was deposited as soon as the stream of fresh water struck the relatively calm waters of Hudson Bay. The consequent reduction of the current resulted in the deposition of its sediment at the mouth of the river"
      So Port Nelson could never be "permanently" dredged deep enough to allow port operations.

      This was officially considered as a strategic infrastructure – to diversify our ocean accesses. But in reality, it was indeed an Anglo Saxon route out of Hudson Bay toward Europe.

      This was then strictly a federal project, and 100% financed as such. I don't see how Manitoba could be seen as having been shafted by this project. And afterward, I don't recall the Feds having committed to financially support the port forever. (as opposed to some Maritime ferries by example…)

      About the railway, its construction claimed many many lives (can't find the numbers, in the hundreds?).

      Personally (with my military background), I would still consider this port as a strategic asset. (If you recall, U-boats 100% blocked the St-Laurent for what, 3 years in WW2?).

      I'm just wondering, wouldn't it be cheaper to just shift that Energy East pipeline toward Port of Churchill instead? (and use new icebreaker tankers as the Russians are doing in their artic coast).

      We could repair that railway at the same time, and the whole thing would ensure the permanent viability of this strategic port.

      Just my two cents.

      PS: Somehow, I would really enjoy such an Anglo-Saxon routing for this pipeline… 😉

    • Ex Mil; I have advocated for some time on this Blog and elsewhere for a reconstruction of the Arctic route through Churchill. With the now obvious American strategy for Economic and Political control, Canada would do well for future protection of sovereignty and well being by investing in the northern seaport. American interests, (CXR owns the defunct rail, oil, grain, etc.), we have left ourselves vulnerable to foreign controls. Please use your experience and influence for more accountable infrastructure development. Let's buy back our resource based industries, and foreign markets.

    • Interesting indeed as to the timing of your interest in Port Nelson, little written about that.
      The project expected to be a failure from the start,(as journals I have, as to 1913-1918, starting with the expedition leaving Halifax with 500 men) say a poor survey had been done of the water depths necessary for the ships at that site, so something like MFs and the quick clay at the North Spur, to sanction without much knowledge of the site.
      At Port Nelson at least 6 large ships when around and were lost and much of their freight. The terminal was to be built at the mouth of the river, but each spring the ice break up would take away all that was accomplished in the prior years construction. So then, after several years, a clever change of design plan by the engineer in charge: build an island 1/2 mile square out further in deeper water, no small feat with construction technology at that time. They needed and built 17 steel bridges to connect out to that island, the steel much of it coming from Texas I believe, all joined by thousands of rivets! Tremendous accomplishment, but by 1918, (so one century ago this year),the work was all terminated at Port Nelson. Wonder if the same will happen at MFs. Bank then, all materials having to be transported into Hudson Bay by ship, many being Nfld ice capable used in the sealing business by St John's merchants, who also made good profits by selling such ships to Russia, then knee deep into WW1 and revolution. Access to Port Nelson, otherwise was by canoe, 200 miles down the Nelson River. A Nova Scotia newspaper, I beleive, had a reporter there undercover, this being a boondoggle, little reported on,and a Mountie Marconi station the link with the outside world. Winter time access was to walk upstream along the Nelson some 200 miles to the railroad line. This rail line is now owned by Americans, run down, damaged last year and a vital link to Churchill port etc . Robert Holmes has commented on that.
      Winston

    • Hi Robert; I did not realise your similar interest in developing our northern infrastructure, including Churchill!

      FWIW, for a specific catchment area (Manitoba and northern Saskatchewan?), it was cheaper to ship grain via Churchill than elsewhere. This overall efficient logistic was properly applied (via the Canadian Wheat Board) for many years and indeed kept Churchill going.

      When that board disappeared, well… CPR and CNR market power just drove out Churchill of the equation, and directed all the grains toward their respective systems. (So I would not blame totally US OmniTrax here…).

      I consider this shift of traffic away from Churchill a total infrastructure/logistical waste as both CN and CP currently run close to capacity and can't really handle much grain on many choked routes.

      Agree with you, Robert and Winston, that we must find a way to economically divert traffic toward Churchill, and why not, think outside the box (like shifting Energy East toward Churchill, a much shorter route…)

    • Ex-M…in reference to the port of Churchill, and the Feds building the port but not supporting it forever as opposed to supporting ferries. I could say you are comparing apples to oranges, but rather will say you are comparing two ingredients in my breakfast this morning. Bacon and eggs. I could say an hen was involved, but the pig was committed. So it is with ports and ferries. The port or highway can give a continuous stream of eggs or flow of goods for years with just a little maintaince but the ferries, like pigs have to be totally replaced at regular intervals. At very high and esclitating cost in today's dollars. As a military man you could appreciate that for the cost of replacing aircraft or a naval ship. The port of Halifax will always be there, but ships come and go, being replaced every thirty years or so, and same with an airforce base and an aircraft. On PE they replaced the fairies mainly with a bridge at no big cost to govt. and now basically self supporting economically. Ferries can never do that because of the capital cost and operating cost, except where the volume of traffic and short distance makes it viaiable. That is the situation on the PAB-Sydney route, it can never be self supporting unless they charge your thousands of dollars to bring you car to and from, or a transport truck 10's of thousands. There was foresight in having that as one of NL's terms of union with the nation of Canada, otherwise people could not afford to travel by ferries. As you know the ferries had railway tracks on them to link with the railway in NL, till the mid 80's where there was a rails for roads agreement, where transport trucks became the mode of transport rather than trains. So maybe the normal change for the future will be via a fixed link between NL and QC. Some say it can be built like confederation bridge to PE with private money rather than public money, and can pay for itself, and pay off the Capitol cost with the Feds contributing the amount that ferries cost until the Capitol is paid off. Maybe that's all in our future in nation building if we continue to be nation builders. Cheers, says Joe blow.

    • Wow Robert, what an interesting link you just provided me.

      You and Mike Priaro definitely made lots of leg work on such a northern pipeline (with a deep water port at Rankin Inlet)!!!

      (No Robert, I'm not a certified cost Engr)

    • But further reading Mike Priaro's concept, he's pretty convincing that such a route could be even more cost effective than Energy East (shorter route, both pipeline AND then sea to Europe). And furthermore, this routing would "run right through the heart of Saskatchewan's Athabasca Basin".

      This Mike Priaro is a genius, and we got to find a way to get that thing going.

      I'm sure there won't be any local oppositions, even more so if that allows the rail line re-opening, and employs a bunch in Churchill

      (My earlier interest was more into finding ways to save the port of Churchill, but apparently this pipeline can actually pay for itself, and then some)

    • AJ;
      I really enjoyed reading your post; don't change your style!! 😉

      I did not mean to be critical of the ferries when I made the comparison. It was my way of saying the Feds did not owe Manitoba perpetual support for operating the Port of Churchill. (But I understand your reaction, as it was indeed ambiguous).

      Cheers!

    • Can't ignore Heracles, and his comment on AC/DC. He says :Remember the gigantic blackout that hit the whole northeast America and HQ was not synced to that so not affected.
      Which backout? I seem to remember one in 1989, I think, but may be wrong on the date. It was caused by an event 93 million miles away, a solar storm, which triggers GICs,(Geomagnetic induced currents) actually DC currents in mother earth that then gets into our AC grids. It saturates the iron core of transformers and causes havoc. In my days with Nfld Hydro, I communicated with Boulder , Colorado, connected with NASA, who watched for these solar flares and could give us 24 hr warning (I involved with protection systems). Corner Bk Nfld has one of the highest GIC readings in the world, due to high ground resistance. That big outage also effected HQ and right up to Churchill Falls. After that, HQ spent about 1 billion to protect against such events again, least they negatively affect the North American grid. Perhaps Heracles refers to a later GIC event?
      In essence , whenever we get much Northern Light effects,the solar particles interacting with our magnetic field, there is potential for power grid and communication system problems. Some years ago I asked if MFs system was so protected, never did get an answer.
      Winston Adams

    • Hi WInston,

      Sorry I did not gave the date… It is the one from 2003. Google for "blackout northeast" and you will find it quickly.

      You are right about the one from 1989 : nothing to do with sync or not sync as it was from solar storm.

    • So Heracles, HQ operating as its own system,(not synchronized with others) is more because HQ was a bigger risk to others systems than the other way around. But once done, as at present, it is beneficial to other systems and HQ. This way HQ can tie in via DC but not be a risk to taking down others.
      Winston Adams

    • If that's the cost Rafus, we could do 400 inquires for the cost of muskrat, 13, 000,000,000$. Or the amount of muskrat $ that went directly to other parts of Canada was between 3 and 4 billion, so 120 of the 400 inquires could be held in other parts of Canada. Start counting.. 1… 2 …3… 4… 5… 6…. You get the idea says Joe blow.

  8. All hands have a listen to CBC Radio at noon, Nfld. time. Topic; Electricity Rates.

    Seamus on with Fred Hutton this morning beating around the bush like a professional politician about any Federal help coming. Still waving the loan guarantee banner as the billion dollars in the bank savings to the rate payers, AKA middle class and those who want to join. Almost lost my breakfast.

    • Right on Levy, just listened to Shamus, what a sham,on open line with paddy, and he acknowledged the power rates will be a problem for the average class that he represents. So paddy had him right on the hook but let him go by then asking about the serf clams. Paddy's next question should have been, "so you recognized the problem, or the challenge, what are you going to do about it". He probably would not have given a straight answer, but why should he when the media don't even ask the tough questions. Maybe they have an agreement before the interview that they promise not to ask the tough questions, or their bosses tell them not to ask tough or follow up questions. Yup, the brave fearless media, can't depend on them, says Joe blow.

  9. I wonder, does Antle have any ideas or is he tongue tied? As we know, Feehan now cites the minisplit as a danger to power demand growth. This is something that engineers should long be familiar with, althought many are not.
    When Antle ran last time I emailed him as to minisplit potential impact on our power system, and never even got a reply.I assume he was not interested or had no knowledge of the impact on MFs economic case.
    Ms Rogers, who often speaks of the cost of housing and power bill for seniors, I emailed her prior to MFs sanction, and she replied but just saying she would pass it allow to her Leader, Lorraine Michaels, who never expressed any interest. So, makes you wonder how serious they are about the impact on low income people.
    Now if Antle is tongue tied, the first comment on this piece says "not voting Liberal" That seems a good approach, and vote for someone who can at least speak and have some ideas. As AJ says, state your plans.
    Winston Adams

  10. Just wondering, I have seen WA several times mention that LED lights save little or nothing on a power bill, despite being 75 percent more efficient than the old style lights. He has asked Peng2 and 3 to comment if they agree. But Peng2 and 3 have been silent on that, neither agree nor disagree. So, is the promoted savings by Take Charge a myth or not? Is the suggested saving a sham? If so does it apply to other products promoted by Take Charge?
    PF

    • Hi PF,

      The energy saved by LED is energy that does not get transformed into heat like regular bulbs do. The thing is, if you heat your place with baseboards, heat produced by the electrical resistance of a light bulb or the one from the baseboard is almost the same. So that heat was said to be lost by some but actually, is not lost at all.

      Also, the season during which you use the lights the most is also the one when you heat the most.

      At the end, a lot of the energy that was consummed by regular bulbs and transformed into heat must now be consummed by the baseboard for the very same purpose. What you don't take on one side you have to take on the other.

      When considering how bad so many of these "efficient" lights are as for the chemical they contain, I never was in favor of these and always in favor of the traditional bulbs.

      Hope this answer your question,

    • So, you say the energy saved is then chewed up by the heaters, so the savings , or most of it is a MYTH? Would that apply to a energy efficient refrigerator to?
      Would Peng2 and 3 agree with you Heracles?
      PF

    • Hi PF,

      As for the energy saved for LED vs traditional light bulbs, yes, most of it is myth. Most of the loss was actually a desirable side effect that must be compensated once "loss" are cancelled by "efficient" products like LED.

      LED used outside would offer a real benefit because their heat was lost. But considering that most lights are inside, only a small proportion of cases actually save anything.

      As for refrigerators, that is another kind of problem. To make is more efficient, manufacturers use the smallest components possible. But because they are the smallest, they are also often the most fragile. The compressor will run at a pretty high percentage of its capacity. Efficient yes, but it will not last and will break much sooner. The bigger one does take more power to do the same, but being more robust and running at a fraction of its capacity, it will last much longer.

      Efficiency is not trivial at all. To take power is not enough to be beneficial. Is it better for the environment to buy 2 refrigerators and trash both when a single one, more robust, would have do it ?

      As for me, I never consider the "Energy Star" tags and actually, I have a tendency to move away from it. Thanks to that, I still run on the same appliance I bought 14 years and all of them are expected to last for years. As you can imagine, none of them are energy star.

      Instead, one like the dishwasher is equiped with a timer. I can fill it and start it with a 6 hours timer. As such, I do the work during peak hour but the power will not be consumed then and will be only at night, during low consumption. I consider this as much more importat than using an Energy Star, low comsumption appliance.

    • Timely proof that the feds don't do their due diligence. They gamble billions of taxpayer money on high risk energy ventures. Maybe this is a lucky break to cut their losses on the non-economic pipeline venture. It's also a Humpty Dumpty fall for the feds that hopefully makes them more accountable for absorbing the cost of Muskrat!