Guest Post by PlanetNL

Busting the Premier’s Numbers Again

In PlanetNL12, an analysis of Government’s secretive two-tier
declining rate scheme calculated the impact on three types of electricity
customers.  The unfairness of such a rate
scheme was made clear: the less electricity you use, the more steeply your
Government wants you to pay for Muskrat. 
This approach will tend to hit the many poor and working-class who struggle
to pay their bills especially hard. 
Meanwhile at the other end of the spectrum, the few who tend to have
large high-energy homes will be pleased with little difference they’ll find on
their power bill.

How did Government and Nalcor keep this unexpected twist of
rate design?  Well, they simply didn’t
want to tell us and for about two years they carefully misled us.

and Load Forecasting
Elasticity theory has been much discussed on this blogsite so
regular readers know what it means.  In
simple terms for newbies, when the price of a specific good increases, its consumption
tends to go down.  The effect in
electricity markets is well researched and local Ph.D economists like David
Vardy and Jim Feehan anticipate a coefficient of -0.4 to result from increased
hydro rates which is quite consistent with the global literature on the
What this means is that if the electricity rate were to
double, the 100% rate increase would be multiplied by the coefficient to
predict a 40% reduction in energy sales. 
This would happen because consumers would find alternative energy
sources (mainly for heating) and they would adopt habits to be more efficient in
their use of electricity.  Overall
revenue increase on electricity sales would be only 20%.

Repeating the calculation at a 50% rate increase (about 18
c/KWh) would result in a 20% reduction in energy needs.  Net revenue increase would again be only 20%
higher than the pre-increase revenues.

As we have on the Island about $700M total retail electricity
sales pre-Muskrat, a net 20% increase would theoretically provide $140M new
revenue.  As the Muskrat PPA demands over
$800M and savings from Holyrood might be in the vicinity of $160M, the
ratepayers are coming up hugely short by $500M. 
It’s easy to see there is simply no way ratepayers can afford Muskrat –
yet all the smart minds at Government and Nalcor couldn’t see that coming.

On July 28, 2017, Premier Dwight Ball finally yielded to this
truth when The Telegram advised he said the Government would have to offer up $400M.
 So where is the missing $100M?  Well, The Premier has never spoken of
elasticity, so it seemed at the time he ignored sound economic theory and overestimated
revenue by $100M.  What a dumb-dumb,

Next, consider Nalcor CEO Stan Marshall’s first presentation
on the status of the Muskrat project. Nalcor’s electricity load forecast also
appeared to be dumb to the effects of elasticity which is quite odd because all
utilities understand it well.  In June 2016,
Stan’s first major presentation on Muskrat included a load forecast copied
below that to its credit was substantially reduced from the hyperinflated sham
of his predecessor.  

Chart 1: Load Forecast From Stan Marshall’s Muskrat Update
June 24, 2016

Chart 1: Load Forecast From Stan Marshall’s Muskrat Update
June 24, 2016

Still, there were three important problems that critics could
not grasp.  Follow the chart’s green

First, as there is a roughly 50% rate increase used in the
model, why isn’t the elasticity dip in energy sales 20% or close to it?  Nalcor’s prediction was only about a 3%
decrease.  That’s too big a difference to
ignore and struck critics as dumb.

Secondly, why is their dip delayed by two years after the rate
increase becomes effective in Q2/20? The reality is high rate increases will
have been known for many years prior to the completion date – there is no
surprise factor at all here.  Surely, most
customers with the means to do something will be ready to reduce their
electricity consumption by the mid-2020 date when the massive price increase occurs.
 Dumb stuff.

Also by PlanetNL
18 c/KWh – Warning – Not Exactly as Advertised
The Deception of Parity: Premier’s Claim Busted
Thirdly, why the heck is load increasing after 2023 at a
steady clip when the demographic and economic outlook for the island will be
simultaneously weakening?  Who will be
causing demand for all this expensive electricity that most won’t be able to
afford?  Extra dumb stuff.  If there are other jurisdictions promoting
load growth like this, this analyst has yet to find evidence they exist.

A year later, in June 2017, Stan released another presentation
that slightly modified the load forecast, copied below.  The dip was now about 4% in 2022: that’s a
hair more realistic but still a substantial way off what it should be.  The 2.2% long-term load growth remained
presumably as sheer cheerleading hope. 
The same set of questions as 2016 remained completely unanswered.

2: Load Forecast From Stan Marshall’s Muskrat Update June 23, 2017
Take note in the fine print it says, “May 2017 load forecast
is based on a targeted rate of 18 cents/KWh in 2020”.  Clearly Ball and Marshall had their ducks in
a row on using that rate by at latest May 2017 and there is no indication it
was a composite two-tier rate.

Through this entire period, the all-important load forecast
seems to be in substantial error and it officially remains so in 2018.  Or so we thought, based on the assumption of
a single rate of 18 c/KWh. Dwight and Stan have slyly kept the critics and the
public misinformed on this key issue, until now.
Declining Rates Resist Elasticity
Dwight and Stan’s secret weapon relies on the hard fact that
all homeowners and businesses have a certain amount of electricity they must
use.  Essential uses of energy for
lighting, cleaning, cooking, communicating – these things are known as lifeline
energy.  Dwight and Stan intend to make
everyone pay a high rate such as 22 c/KWh on lifeline energy.  

It’s hard to use less lifeline energy and have it worth the
sacrifice.  It is almost immune to
elasticity effects therefore the elasticity coefficient is very low.  That subtle dip in the Nalcor load forecasts
is clearly a result of the previously unknown especially high rate on the
lifeline energy block where consumers have no avoidance strategy. 

If set at 1000 KWh/month, the lifeline block makes up about
two-thirds of total residential market electricity requirements.  The balance is seasonal electric heating
where substitution threats for expensive electricity are available.  Minisplit heat pumps, oil heat, propane,
wood: all are attractive if the heating energy block rate is 18 c/KWh.  At 9 c/KWh rate, electric resistance heating (baseboard
type) will have most electric heat users sticking with what they have. 

At 18 c/KWh, minisplit simple payback was attractive at about
5 years but at 9 c/KWh that becomes 10 years which will turn a lot of people
off.  Sure, some will install them anyway,
but the numbers will be substantially reduced. 
Many of those who have already installed them won’t be happy with this

Despite the overall increase coming to their bills, those whose
income is sufficient to allow them to grudgingly pay won’t have much incentive
to turn down the thermostats at a rate of 9 c/KWh.  Neither does investing in new appliances or
changing habits for other consumption when the savings are at 9 c/KWh – the impact
on the bill isn’t worthwhile to them.

For those for whom any extra dollar on that monthly bill is a
hardship, the poor and the working-class, cuts to their usage will happen even
if they are only at 9 c/KWh.  There will
be many keeping their homes cold and dark to try and save any dollar they can.  Their hardship is substantially worsened by
this punitive rate scheme.  
Adding Up
the Evidence
Now we can see that the old load forecasts, one over two years
old, were based on this super-low-elasticity rate model.  Dwight and Stan have shrewdly duped us all by
pulling out an old and unexpected card. 

Declining rates have not been widely used for a long
time.  In the days of massive affordable
hydro expansion, declining rates were used to grow demand for newly constructed
and underutilized capacity.  Such policy
was a positive in lowering rates for all ratepayers.
The circumstance for its use this time is not for the
consumer’s well being.  It’s simply an
economic lever misapplied in a punitive fashion.  Stan and Dwight may have stymied elasticity
but they didn’t make electricity any more affordable.  Instead their scheme serves to raise rates for
many while protecting a generally well-off few.

On paper, we might estimate the scheme could wring an extra $70M
from the residential market segment. Apply a proportional increase to
commercial rates and – Eureka! – we have now found that mysterious $100M only
the Premier could see a year ago. 

But surely the Premier knows blood doesn’t come from turnips
and the poor don’t bleed money no matter how much harder you squeeze them.  It’s a certainty that Government will have to
develop a massive low-income support program, one much larger than anything ever
offered before, that will wipe out that extra $100M. 

The main effect of the declining rate scheme is to concentrate
revenue collection on the middle class, and that is the most favourable

Meanwhile, the Premier appears entirely committed to burning
$500M annually on Muskrat payback, a deficit burden that will cripple budgets
for other vital Government services and eventually bring the Province to its
knees.  Maybe the Premier should tell us
the secret of why driving straight off the fiscal cliff is the right thing to
do.  That one is really hard to solve.

The above post was prepared before the Premier’s announcement at
the campaign kickoff for a by-election candidate.  The Premier’s words generally seem to say the
ratepayer will be exempted from Muskrat payback and that the PUB shall be
utilized to set rates.  Certainly, this
is an impressive and responsible stance to take.

There are certainly plenty of details yet to be addressed
though.  In this era of fake news, often
coming straight from the mouths of powerful politicians, trust is at an
all-time low.  In Premier Ball’s case,
this post still contains clear evidence that he has been committed to an 18
c/KWh average rate for some time – there is nothing to retract here.  Ball was also clearly wrong on his statement
that 18c/KWh would be on par with the Maritime provinces – his track record is

In addition, numerous NL Hydro officials were recently on
the witness stand under oath at the PUB hearings saying they are being directed
to prepare to raise rates substantially. 
How do we know this latest announcement by the Premier isn’t
electioneering bluster and by October, Hydro is presenting much the same plan
to the PUB all over again? 

Mr. Premier, you had a great day today.  Deliver the details and clarity people are
demanding and more great days will surely be ahead of you. 


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. Excellent analysis of the on going deception of Premier Ball and Stan Marshall, and UG exposure now causing Ball to reverse course, saying the PUB will set rates, noting that rates have only increased 1 cent over the past 8 years. His suggestion yesterday is that there will be no substantial power rate increases, a sort of promise to the public to try and get Antle elected and Ches kept out. Can he continue to fool the people up to and including the election in 2019? Or be forced to show his hand at restructuring the boondoggle, or get a deal with the Feds of HQ? Politics: the art of the possible. Ball's sly self assured smile that he has a ace up his sleeve, goes hand in hand in hand with Stan's Grinch style grin.
    Who know what evil lies in the hearts of men? The Shadow knows. That from a radio series, when I was a boy in the 50s,…..frightening then, frightening now.
    Winston Adams

  2. Another spot on analysis. Has anyone looked into the numbers for generating your own power using a combination of solar panels and roof mounts wind turbines with battery backup? No looking to send excess power, if any, back to the grid just for household use.

    – not voting Liberal

    • the problem is though with that, the gov't, Nalcor, Hydro, and NL power have put into effect fines, lawsuits, and penalties for anyone that attempts to get over 10% of the necessary power to live via green energy.

    • Im pretty sure this is not true. Residential customers are now able to use net metering. In fact, I have been approved to install a 9 kW panel system. THe system would completely offset all of my power use should I decide to install it. No fines, lawsuits, or penalties.

  3. The positive news is we are having this discussion before next years election, if not face to face, then indirectly. Ball did not belly up with his plan, but he may as well have, for the sake of trust, since it has been discovered and made public in the last two post. Having been discovered, ball changed his tune yesterday, and said muskrat will not be paid for by the ratepayers, but rather by general revenue, and by talking to the Feds, where it should have been in the first place or at least in the last couple of years. And the talks should have begun. And of course we were getting some love or hush money in return for not bringing it to the Feds doorstep in earnest. But now he will have to get serious with Ottawa, and demand/negioation that they pay their fair share as the enablers. And there is no time to waste, before both elections occurs. And we want this before the elections and not after ball et al b'y, says the average joes and janes.

  4. The 25% of the workforce WILL be getting an added "Muskrat Levy" on top of their "Debt Reduction Levy". Remember the outcry that was, when most of the workforce were going to be subject to the Levy? It died out very fast once Ball changed it to the 50Grand and up folks. 75% of the workforce went quiet (can't blame them). I will soon be revising my name to "Levy's Payer"- Plural, until I can get out of here.

  5. Just recently I saw Feehan's report for the Consumer Advocate filed with the PUB.He shows results assuming an elasticity coefficient of 0.4 and for o.6. The average of these is o.5. This is what Vardy has stated for the past few years in various speeches, which got little attention.
    At the PUB I now read from July transcripts Browne questioning Nfld Hydro as to elasticity studies by them or Nalcor as to MFs. He could get no answer from them if any studies were ever done. Yet he stated that Nfld power regular do such studies.
    So, how could it be that 6 years after sanction of MF, with the expertise of Feehan and others at MUN, and also the engineering dept, who should be knowledgeable about technology improvements effecting elasticity of electricity, ……how can it be that only now, 6 years after sanction, that elasticity issue reaches serious discussion at the PUB? Why was reports such as Feehans not done for the good of the public, and to help prevent this boondoggle, before sanction? Why was it only that MUN economist Wade Locke controlled the economic agenda as to elasticity? Was it necessary that MUN, or Feeham get consulting work from Browne for this report to get done? Obviously Tom Johnson sought no such report? Could not Feehan have done this any way to counter Locke 6 years ago?
    Winston Adams

    • And where is the Nfld Power studies that Browne references? If Nfld Power had such studies that foretold the result that Feehan now states, that could have saved us 12.7 billion, did they too keep this secret? Stan should know of their elasticity studies?

    • Hi Winston,

      You have the answer to your question in this very article…. It seems that Nalcor & All had their plan long time ago on how to defeat elasticity. By using their model of high price for the first power and lower price for whatever is extra, the model is very effective to defeat elasticity because whatever saving you will do, you will save at a very low rate and still have to pay the max rate.

      MF was never meant to be the lowest cost. It was an emotional decision and not a rational one. It had to be presented as rational, but was not. Because the emotions MF satisfies are so common, people accepted the idea without much questionning.

      Newfoundland proved itself unable to learn from its own mistakes. Here, an article re-explains how the idea of cheap power was used in the past to promise wealth and prosperity :

      DW himself said that to right the wrong of UC is why he entered the political world. When an idea is rooted that deep, there is a high risk to take bad decisions…

      As for efficiency, it is the same as for so many other ideas : there must be a financial basis on which you can build the case. Without a financial basis, it will not be adopted.

      Medical treatments that are too cheap will be ignored or discarded because they do not generate enough return on investment. Yes, health and lives have their price tags too. In some country, there are people who worth more dead as they did alive because once dead, their body can be used for research, cinema / special effets and more while alive, they are considered as a burden.

      Does it make sense from a human point of view ? Surely not!

      The thing is, money is the only moderator that have been accepted by everyone, or at least such a large majority that it can act and play its role. Money is a terrible moderator, but because it is the only one we have, it is also the best we have.

      Find a new moderator other than money, that people will adopt, follow and obey, and you will save the world. Until that, reality is that money is the moderator. So for efficiency like for anything else, it must be justified by money for it to be adopted by a majority.

  6. I actually think the proposed tier system may be excellent! Why? Well, everybody pays the same rate for the first basic 1000 hours. Most of us use this amount for non heat purposes, so the burden is fair to all users. There are very few electric heat users that would be burning less then 1000 hours per month. Keeping the block of hours above 1000 hours cheaper will not discourage demand, which is of course what we want. With Muskrat we don't need/want people exploring alternative sources of heat since we all know reduced demand just increases the burden to those that are left on the grid, and increases the liability of the average taxpayer. The tiered system in my opinion has the potential of actually saving this project!

    • 22 cents for the first 1000kWh just makes solar PV look better with the grid connection just a backup. To kill that, they would have to have a fixed monthly fee for everyone (say $200) so that there was no way to avoid it. This $200 would be a take or pay kind of thing. They will also have to make it illegal for people or tenants to share a meter by insisting that every independently owned or leased space have its own meter and minimum billing.

      I am slowing going off-grid in the city. Propane is getting installed this year, I have solar thermal and quad zone heat pump already so the only thing missing is a large PV array on the roof. On sunny days I have lots of hot water at 50C. I don't expect many people to do this but I am quite sure that if it caught on that government would be looking at a MF avoidance tax for anyone that refuses to connect to the grid.

      Anyone that goes through the Amish country side in Pennsylvania will see the electric wires on top of the utility mast just hanging in the air. Think of it as a one-finger salute to modern society. You will also see a solar panel or two on their out buildings for the essentials.

  7. We have to keep this discussion going in the political realm. As we can say again, politicians only exist for one reason….to get elected, and we need their well laid out and explicit plans, particularly on muskrat and power rates before the elections, both provincially and federally within the next 12 months or so. Ball's plan is partially known, as presented in this post, and his comments in the past couple of days, that ratepayers or taxpayers will not bear the brunt of the boondoggle. So we need to hear more from him, to complete his plan for muskrat. Now, how about the other two buckoues, we need their plan on the table too, not just criticism, or lack of trust of ball's plan. If they are in it to win the next election they best buck up and present their plan too. We need it all on the table. If it is too complicated for you to present your plan, then you best tell us, so we can discard you in the next election, and just focus on ball et al, and his talks and plans with the Feds. Cheers, Joe blow.

    • What i'm starting to notice in the media, and the public in general, is the feces is starting to accumulate on the fan blades. Long over due but better than hitting full force in 2020. NLers are starting to wake up to this disaster. About time!!

  8. One thought here on how to set rates going forward assuming the provincial and federal governments end up eating most of the cost of the Muskrat Falls power.

    Nalcor has stated that the cost of Muskrat Falls energy delivered to Soldier's Pond is 17.42 c/kwh. The PUB could use this value, blended with the cost of everything else already existing on the grid, to set the rates for local ratepayers. Essentially, we pay for the energy we use instead of the entire project. What would the blended rate be? 13-14c/kwh perhaps. Higher than today, yes, but more manageable than 23c/kwh, though programs to help those who struggle to pay power bills will have to be expanded.

    That takes ratepayers off the hook but not taxpayers, I know. It's then up to the Nalcor and the provincial and federal govts to determine how they are going to shoulder the rest of the cost. Energy export revenues, capacity exports, oil and gas profits, cost cutting, and federal money are all options.

    • Maybe the analysis should be; What alternative less expensive power options are feasible on the Avalon? 17.42 c/kwh via long, long, potentially unreliable transmission lines represent the wrong choice. Complete the analysis.

    • My thought was to simply deal with what we have. To your point, if Muskrat Falls GS and the LIL had not been built it would have been cheaper to simply build a direct replacement for Holyrood, an oil fired generating station. Using diesel gas turbines like the new Holyrood CT would likely be more expensive simply because the fuel is more expensive. Anyone who suggests we could do it with wind turbines or solar panels simply doesn't know what they are talking about. Those inverter based technologies cannot replace conventional generation without storage or an interconnection to the mainland such as the Maritime Link to provide balancing services.

      California relies on a longer, higher capacity, HVDC line to provide power to LA. As long as the line and grid are well designed it shouldn't be an issue. That remains to be seen here in NL.

    • Interesting that you do not see Demand Management and Conservation and Efficiency in the future plan. To deal with what we have now is MFs that may not operate, and if so may be unreliable, and Holyrood old units that are obsolete, and gas turbines that require more expensive fuel than the old Holyrood units, and the Maritime Link that offers a little dirty coal power and quetionable if that is available when needed in Nfld,, as NS is not an exporter of power, and maybe we get a little UC power, if the Labrador link is reliable.
      Such a flimsy situation, how about a future by substantial downsizing our demand, along with modest wind addition,and some island hydro? If we put aside the debt of MFs, it seems the logical way to go, and least cost in 2012, and best for the future. Demand reduction is already heading that way. Take the demand charts shown in this posting showing a decline to 2023, but keep it going down, not turning up, and ask , how do we do that?

    • Let me answer my question: Efficiency NL, and copy Efficiency NS who are on target to reduce peak demand by almost 500 MW. And they have only a small amount of baseboard electric heat, so our situation offers vast reduction potential.
      Some day the sun will shine said Peckford. Someday, here on this blog someone else will ask why we have no Efficiency NL, taking us to a sustainable energy future. Then again, maybe a pipe dream?

    • Winston, DM and conservation do offer potential for reducing energy use but they do not eliminate the need to maintain grid stability. Holyrood, or an alternate source of generation, is needed on the Avalon just to keep the grid from collapsing due to voltage and frequency issues. Should DM ultimately reduce the need for the generation from Holyrood it is possible that the stability benefits of Holyrood could be at least partially replaced with synchronous condensers. I would like to see further study on that issue.

      Adding wind or solar to the system further reduces the spinning inertia that is on line and can make frequency control issues worse leading to more customer interruptions as happened in South Australia a two years ago.


    • Yes, voltage and frequency stability are very important issues,(Bruno would call them technobabble), which if not managed leads to customer interruptions. Like the flywheel on the old Acadia boat engines, the inertia of the large generators give stability. One or two of the old large generators at Holyrood, for future, when not needed for generation, are intended to act as these stabilizers, and called synchronous condensers instead of generators, but the same units.. I believe at first as to MFs , it was thought these would be sufficient to serve to stabilise the DC link from Labrador. Then it was seen that one new such unit must be added at Soldiers Pond, then not enough, so a second such unit added at Soldiers Pond,at very high cost, so 2 there plus the units at Holyrood.
      So technically Holyrood cannot be completely decommissoined, as those units and the building must remain, and serve a purpose.
      Yes, certainly studies as to stability for a situation if we reduce load from Conservation is appropriate, and should have been done well before now, I suggest. Such studies seem minor in cost compared to the waste on MFs. I think we should not say our system must collapse if we go to reduce demand, especially on the Avalon? Please comment, as you have insight it seems.

    • Simply put, we can all conjecture about what might have been, with regards to alternatives to the 17c power. Sunk cost and stranded assets need to be put aside. Get the professional technical work done. We can do the shift if we give our minds to it. Maybe, just maybe, 12c power is right at hand on the Avalon. Which would you rather have?

    • Winston, I agree it's not a guarantee that demand reductions would automatically lead to system collapse, I hope that is not what I was implying. Whether a generation source would be needed on the Avalon comes down to how much demand is reduced and where. Looking at the need for Holyrood, the installation of the third line from BDE to WAV reduced the need for Holyrood to support the grid as did the installation of capacitor banks at Come By Chance a few years ago. These are stability issues.

      In terms of meeting peak demand, the ICF DM studies submitted to the PUB in 2015 indicated that peak could be reduced by up to 335MW by 2029 perhaps a bit more as I believe they were conservative on some of their estimates. That reduction wouldn't mean the elimination of Holyrood or a replacement entirely, but perhaps a new generating station would be smaller in size than the existing Holyrood plant.

      So no, I won't say DM will absolutely lead to grid collapse. If anything the utilities should be promoting conservation as a means to maximize export energy potential so they can raise more cash to pay off the stranded Muskrat debt. My original post was just me conjecturing on a potential solution to how the PUB can set rates going forward. Without a plan they are simply picking a random number to charge to customers that has little bearing on what is in service on the grid.

      Small hydro would potentially add capacity and energy in the spring and fall when they have water but not in the winter and summer when water levels are lower. This could help offset Holyrood in the spring/fall but is otherwise unneeded.

      I'm also not against wind generation outright but it must be used wisely and one cannot assume it can be used to completely replace conventional generation in all cases.It's simply not true. NL has excellent wind potential and we should be using it as best we can. The best place to start seems to be isolated grids on the island and in Labrador. Wind turbines there would help reduce the use of diesel significantly, it's better for the environment, and will reduce the subsidies that the interconnected ratepayers have to pay to subsidize the isolated grids. Larger installations connected to the grid will require a market and space on the interconnections to the mainland to be useful. I'm not convinced there is a market for it at this time.

    • I would not be too optimistic on the actual alternate green generation possibilities – wind in particular.

      For comparison, to ensure its grid stability, HQ doesn’t want to exceed what, 30% of wind power? All that despite its considerable reservoirs complex/hydro flexibility, plus the considerable real time back up power that it keeps ready 24/7. (Better than flywheel inertia I guess…)

      What would be that percentage on the Rock?

      I would be more optimistic for solar thought, if we can combine this generation with sufficient individual accumulators/ batteries. Even better if you intend to go off grid… 😉

      Heracles must know way better on HQ’s grid stability requirements when coupled with alternate green generation.

      For those that perceives this as “technobabble” 😉 , I like the following interactive illustration, for wind/hydro coupling:


    • Winston, it's PENG3. Sorry I forgot that moniker you gave me in the past.

      Ex-Mil, the HQ grid is isolated just as the NL grid is now. The only interconnections to the north american grid are DC connections. Decades ago they attempted to ac interconnect but it introduced an oscillation in power that impacted much of the eastern interconnection. The ac link was broken an has never been re-connected though there is better technology now that would deal with that oscillation.

      HQ would likely want to hold wind generation on their grid at 30% to avoid stability issues and capacity issues should that wind drop off too quickly, even for the fast ramping hydro to keep up. IIRC, 30% penetration would also be state of the art at this point as not many jurisdictions have achieved that level.I don't know if their DC connections have the same frequency controllers as the ML and LIL do. Those would certainly help some of the control issues that wind power could introduce.

      HQ is also capacity constrained in the winter peak to the point of having to import capacity to meet demand at times. They have lots of energy but are capacity constrained. So adding wind for them doesn't help much in terms of capacity and adds to an already large energy surplus that they are having trouble selling now.

      Here in NL and before the interconnections were in service, a study by Hatch suggested no more than 100 MW of wind power before doing more detailed studies and up to 10% total between now and 2035 as load grew. These levels take into account stability issues as well as increased spilling at the reservoirs.

      That's changed now with the interconnections. I've heard numbers as high as 400MW of wind could be tolerated with the Maritime Link in service. I haven't seen any studies so can't comment on the validity of that or what sort of equipment, such as synch condensers, would need to be added to allow connection of that much wind energy.

      I priced 5kw worth of solar panels (no batteries) for my house a couple years ago when the net metering policy was being developed. The pay back period didn't warrant the investment.

      Have a good weekend,


    • Anon 13:40 (Well PENG3 we now know) Your post is indeed very informative!

      When you say: "…the utilities should be promoting conservation as a means to maximize export energy potential so they can raise more cash… "

      In regards to the current minimal revenues we can fetch from exports (current depressed US markets), how much money would you spend "promoting conservation" in NL?

      (I'm deleting the same post @15:24 below)

    • You raise a valid point, Ex-Mil. Any conservation or DM effort should be cost effective. If subsidizing LED bulbs or heat pumps proves more costly than the energy saved and exported it's not worth it.

      I'm somewhat surprised that LED bulbs are still subsidized. I would have thought the returns on that program would not have been worth it by now.



    • PENG3, I am not surprised at all that they still subsidise LEDs. These lights for indoor use are subject to the interactive effect that transfers the saving over to more use of the baseboard heaters. By their own numbers, they use a 0.6 factor, so 60 % of the saving is lost based on a 7 month heating season. On a 10 month heating season, this jumps to about 80 % loss. Given the inefficiency of baseboard and convection heat, and added heat loss through windows, it is likely there is no savings at all for residential, with these LEDs, except for outdoor use. Would you disagree?
      So, such measures is largely trickery and misleading, and does little of nothing for conservation or savings for customers, but keeps revenues high for the power companies. So, we remain at 2nd worse in Canada for conservation and efficiency savings.

    • Ex Mil, NS programs cost about 2-3 cents per kwh. If Holyrood fuel costs 13 cents, and gas turbines 28 cents, then it is cost effective to that. But with export power at 5 cents they say now EE is not cost effective beyond 5 cents. So, MFs deters EE.
      If a measure costs 12 cents and the customer pays 2/3, then the subsidy is 4 cents. NS spends about 40 million a year on EE, in Nfld about 5 million, of this about 1.5 million is of value, the balance in expenses and wages for power companies and advertising,TV, paper and internet ads, saying put on sweaters and turn down the thermostat, and use a clothes line! NS went big on EE in 2008.

    • Winston, if (big if) MF operates, then we should have plenty of power to meet NL needs, the Emera Block and keep Holyrood idle most of the time.

      In that case, I would rather attract/keep businesses/jobs around via lower rates – instead of getting hypothetical pennies from exports (+ paying for "subsidized" EE programs)

    • Another way to look at it is if we are to get only a mere 5 cents from exports (or even less when accounting for EE program costs), may as well lower rates to 8 cents (versus 9 cents); Nalcor would then sell more power while ensuring better competiveness for NL's economy.

  9. Did I not read a couple of days ago, that of the 12.7$ billion predicted, that only 9.7$ to date has been spent. What would have been the figure spent when Stan took over…never heard that figure… but must have been lower. I know, no point in crying over spilt milk, or water under the bridge, but no doubt, should have been haulted to evaluate then or stopped although. We had voodoo economics a few days ago, maybe we have yo-yo economics now. (a term used in a very volatile stock market) and maybe muskrat will go down to 6.7$. Wishful thinking, but maybe not in terms of our share of the boondoggle. Cheers, Joe blow.

  10. This post could have been titled "how do you know when a politician is lying?" Answer: his lips are moving.

    Ball this week has simply exercised a classic Liberal maneuver. To conform to the popular opinion. This centrist approach often wins elections but is not a true indicator of policy.

    Ball is trying to say the right things but is there truly any hard commitment in what he is saying?

    The challenge is far from over.

  11. Let's see now what we have. As Cashin said, not because we are small, we can't be smart and witty, and use ingunity, or words to that effect yesterday. The Feds have a 10 percent equity in Hibernia, probably have made their investment tenfold. Can Canadians not see fit to hand that over to the province that brought those resources into the federation? Or we have a 5 percent equity in Hebron, that won't give much return for maybe a decade. Let's do an even swap with the Feds. Our equity steak in Hebron, for their equity in Hibernia. We could collect immediately, and the Feds would wait a little longer for their return. The fish quotas in this province have been reduced to a mere shadow of what they once were. The Feds have given most of these quotas to other countries, and provinces, from a resource we brought to the confederation, as the Grand Banks of Newfoundland. Surely these fish quotas are worth something. Someone pointed out some time ago, that 3 or 4 billion of muskrat cost went directly back into the Canadian economy, in the form of materials etc. That must be worth something. How much does Quebec benifit for the jobs of shipping, railway, ports, employment etc. of iron ore from the ore mines in NL. And shipping most of our needs from the ports of Montreal, and Sydney, that must add to the economy of those shipping ports. That must be worth something to the Canadian economy. They say we produce some of the best economist from MUN, where are their young minds, innovation, wit and smarts. Kennedy said, when planning the space program to the moon, we will do it, not because it is easy, but because it is HARD. Now is the time for all good men and wemen to come to the aid of the province. All challenges for our 7 tiny MPs in Ottawa, and our MHAs. You don't need to be attending garden parties and birthday parties, the local mayors are quite capable of doing that. We are all in this together and bigger than one elected government of maybe 20 members. Where are you ministers, of natural resources and finance. Where are our leaders ask Joe blow.

  12. All of the above comments are stunned. Muscrat Falls is the problem. Why hasn't anyone suggested shutting it down? To keep it going will cost $100 million to operate and $700 million more to finance it, escalating by 2% every year for 50 years. If we shut it down the recall power will cover Holyrood and we could buy power from HQ to satisfy mainland demand. This way we could worry about repaying the loans and not worry about $12 billion plus to satisfy ENRON North, I mean Nalcor.
    Gerry Goodman

    • Not sure I follow you either Gerry, but I will try again. The bottom line is we need to INCREASE the provincial REVENUE substantially. HOW DO WE DO THAT????? As we all know we are up to our yang-yang in debt, and with muskrat being added to general revenues, we are in even deeper. We have to keep our bond rating agencies happy, so how do we do that. Can we decreased spending? With our aging demographics, it will not happen in any meaning full way. Yes, we can get a few dollars here and there but not enough to make a substantial difference. And the govt. has said the rate payer and the taxpayer will not bear the brunt of the boondoggle, so what's the answer?? I only see the combination of two possible solutions. 1) increase revenue 2) the Feds pay their fair share of the boondoggle as the enablers. Also, we are a net contributor to this federation, we do not receive equalization. So we have to make the case both morally and politically that we need the Feds support because we deserve it. With our natural resources, oil, minerals, fish of the seas, and other economical factors, like being importers from the rest of Canada, we are not getting our fair share. If our politicians can convince Ottawa of that, then they will take their fair share of the boondoggle as enablers and morally and politically as well. Can we increase our revenues from oil, maybe, but we cannot control the price. Can we increase our revenue from minerals, tourism, and other resources like fish, maybe, but difficult. Can we increase our revenue from muskrat, or the buying of hydro power from HQ and giving it to Nova Scotia, unlikely. As for shutting down muskrat, that has been suggested for several years now, before completion as well as after completion, by many on this blog and elsewhere. So guess that one remains to be seen. Will muskrat shut down after completion or operate, a good question, but you can tell us. Will holyrood be shut down? All good questions? I don't have the answers, maybe others do, but we certainly need these discussions, not only about muskrat but all segments of our economy before the next election, and even after, says Joe blow, average Joe, AJ.

    • Hi Gerry,

      300 million from ratepayers is way beyond the realm of possibility. Your numbers and assumptions are not stated so here are a couple of key issues.

      First, the difference in MF generation station operations cost and CF recall cost is only about 20 to 30 million. There would still be over 600 million in costs to eat after Holyrood savings. Substituting the generating source is trivial.

      Second, the LIL is the lion's share of total project costs in the first couple of decades. The rest of the project is backloaded more or less after 2041. Nalcor must have thought they could hide those increasing costs better after 2041 when they could apply assumed high CFLco earnings.

      I'll keep these issues in mind as a post focused on such an alternative may be beneficial to ensure there are no such misconceptions as to any fixes within provincial self control.


    • In essence, your letter, key points says: hard to get the fat cats to pay their fair share, as low rates benefit them more, and they are good at avoiding taxes. That we need to plan and move to an energy efficient future. That our problem is more complex to be solved by the PUB alone. That the enables :the Feds, NS and Emera needs to be held accountable. That appointed people to solve the problem may not work, at least MHAs can be voted out.

    • Maurice your letter "We’re having the wrong argument about Muskrat Falls" is spot on target. The shell game being played by the NL government, will the ratepayer or taxpayer or magically restored PUB make the MF testament to vanity and corruption disappear? You, the innocent dupes in this scam, will pay for the unneeded, most expensive hydro ever built–if it ever works–.

      The fruitless attempts to dodge the cost increases coming has led to a bizarre suggestion of making wasteful consumption (primarily from the rich) less expensive while those consuming less pay higher rates. This is wrong and is backwards. Those using less should pay less to reward conservation.

      Don't be fooled. This is just another attempt to mop up surplus power from MF.

      It is time to clear the smoke and mirrors and pay attention to the political process that short circuited regulatory oversight.

  13. WA / Maurice:

    The way I see it, government revenues and personal incomes are relatively fixed – expenditures external to our economy are not. If the government cant recoup the costs of MF via external sales, we the people are going to pay – its irrelevant how it is shared between someone making $50k or $200k annually, rates, taxes etc. The net result is we as a group get reduced services for increased taxes/fees; though I do agree that greener living is always worth a good exanimation.

    Extending this concept to a national level if we were to approach the Feds for relief, it would then reduce services on a national level.

    I guess my end thought is we need to find a revenue source external to the Canadian economy to partially offset some of the wasted cash – then the argument is why didn't we find that external revenue source before?

    Lesson is that we should always consider the long term effect of spending our money – otherwise we are in a vicious circle. MF should have never been executed, the money sunk into MF is lost to our economy (ie paid to external persons) and I offer that there is no good solution now other than to reduce costs going forward and accept we are going to get less for our tax dollars.


    • PENG2… No, no argument, …."why didn't we find the external revenue source before" . The question is where do we find the external revenue now, I. E. To the Cabadian economy?? I have no idea, in substancial amounts. Yes, can see a little here and there , but minor amounts. What did you have in mind, or a rethoritical question?? Are you talking sales of hydro power in US…I won't bet my paycheque on that…says Joe blow, but there are wiser men and wemen than me.

    • If we look at money leaving or staying, consider:
      For transportation, we are fossil fuel driven. Oil leaves Nfld valued at about 70 us dollars a barrel, then processed elsewhere, and comes back here and retails for about 6.30 a Canadian gallon, so about 235 dollars, so we get a little royalties but much more going out then coming in to the Nfld economy.
      Now what if our transportation was converted to electrical power instead of fossil fuel? We get out royalties but also make use locally of our our own power resource, for which we have no profitable exports power. And as a side benefit, less green house gas production from transportation. Does it make sense? And so too use the carbon tax to enable that transformation?
      Winston Adams

    • Joe:
      I have no idea how we find an external revenue source – my statement is simply based on looking at the provincial and national economies as closed systems. Sorry I cant offer more.

      I will be the first to say provincially the cheapest fuel nationally should be in Arnold's Cove, unfortunately politics gets into that as well. Traditionally, we have sold our resources for the quick buck of construction – I think we need to change our mindset as to where the real economic drivers are, as our endemic problem with politics is pandering and even a laxing of the EI qualifier rules gains votes.

      We are our worse enemies – or so I think. And I really don't know how to fix our problems – though I can identify what they are.


  14. DBRS bond rating agency says in its latest report recently that a positive rating in future for the province will depend on continued fiscal discipline, downward trending of debt to GDP ratio and clarity around how costs related to Muskrat Falls will be absorbed by the electricity rate base and/or tax base.
    The Ball government could defer a decision on the split between electric rates and taxes for cost recovery at least until Muskrat is commissioned and starts power production.
    When is that now, 2019 or 2020?

  15. Let me see: a few engineers comment on this blog: from Nfld, Peng 2 and 3, (#2 a civil guy knowledgeable about quick clay) and Peng3 (probably a Nfld Hydro engineer, electrical), W Adams, ex Nfld Hydro, electrical,then from Quebec: Ex Military (civil?), Heracles (IT, information technology), then Jim Gordon, from Montreal? , civil; and 1 or 2 more single time comment or piece.
    MFs is mostly a Nfld engineering failure, but because it has been led by politics, not engineering. Indeed, power company engineers, whether Fortis, Nfld Hydro, Nalcor , Nfld Power are, I guess, forbidden to speak freely to the media, or via UG. Oh, I forgot the anon Nalcor UG source that stated the falsafication of estimates for MFs.
    So, a black mark against engineers, thought perhaps not their fault. But their general silence sort of paints them as enablers, does it not?
    And engineers most in the spot light? Gilbert Bennett and Stan Marshall. Gil has been silenced, perhaps because he knows where the bodies are buried? Since Stan arrived, Gil has disappeared from the public.Gil, who mocked the Swedish quick clay expert, least we forget.Gil, electrical, but not power systems, but the cable guy, DW's pick, was it not? But Gil has never commented on UG, has he?
    But what of the hundreds of other engineers locally who are silent, who might give words of wisdom to this blog, as to the past and to our future?

    • PF:

      A couple points:
      1) I will state I am a SM supporter – he did 'politely' say MF was not going to work pre-sanction, though most didnt read between the lines and were blinded by DW bs then
      2) few NL engineers actually work at MF – most are imports and for the first number of years didn't even bother to register with PEGNL – a number of complaints and cease/desist warnings finally got that straightened out. I do strongly protect my profession and its right to limit those who claim to practice here am glad PEGNL stepped up.
      3) GB is finally neutered – he was in over his head from day 1 and never had the experience for what was being done
      4) NL Hydro as a whole don't have the experience basis for a MF or any other construction – Cat Arm, Salmon, Baie D'Espoir, Granite etc were all done by external forces. There is NO construction experience at NL Hydro beyond minor maintenance and they were in over their head the second DW won the election in 2003. Reliability aside – I am not convinced that if a HVdc line was dropped that anyone in Hydro Place even could grasp the task necessary to get the gear in to raise it again.
      5) review the org charts at Hydro and LCP – not a stellar bunch to say the least


  16. I listen to the many attributes and praise of the character of John McCain on CNN, which puts to shame Trump, who 5 times avoided service for the excuse of spurs on his foot, yet I think of one McCain flaw. A few years ago, the son (also a military man) of General Clarke, I think, sought McCain's assistance. He wanted to undo the medals of honour that were handed out to a dozen or more American soldiers who mowed down Americans Indians, men, women and children, at, I think Wounded Knee. One can Google the photographs of the slaughtered, scattered here and there. McCain held up military honour as a virtue, but could not be persuaded to pass a bill to withdraw those medals. Locally we witnessed last year the jailing, at HMP lockup, of an Inuit woman for protesting Muskrat Falls, and now calls to change our Coat of Arms negatively depicting the Beothic. The First Nations remain the last nations to receive true justice from the white man.
    Yet, much to admire about John McCain, especially his stance against Trump. His death just as justice seems about to close in on Trump.
    Winston Adams

    • Amen; people like McCain and Kofi Anan, ( who looked for peaceful solutions to the weapons of mass destruction war), represent the better qualities of mankind. Do any of our existing breed of politicians and public officials actually know what these two outstanding people gave of their lives to humanity?

  17. Thanks Bruno.

    Great to see you in good health and back on this blog.

    It is confusing at best to see how Ball on the one hand can say that NL rate/taxpayers will not be burdened by MF costs, that MF costs will be treated the same as other government debt, and at the same time seemingly suggest that the PUB will be brought back into the picture and set the rates (excluding Muskrat, the PUB does that now).

    So in that respect, what changes?

    All as clear as mud.

    • Good point Maurice, but my understanding is that's what ball meant that the Pub will set all rates including muskrat, otherwise if it doesn't then as you say what has changed. And these are the kind of points that need to be raised, clarified, ambiguity removed so that we know exactly what all our politicans are saying or what is their, plan, strategy and policy. Policy and changes should not be made on a whim, like a by election. But I also would say, that policy can change and modified as circumstances change. No point in making a policy and digging one's head in the sand, as circumstances change around them. But, again it is questions like you raised that must be continuous raised, especially by the media so that we can see where all our politicans and parties stand before the next elections. Yep, as usual most of the questions are raised here rather than by our brave useless media. Keep on truck'en says Joe blow.

  18. And if the PUB includes Muskrat in its rate considerations, then when the PUB has to approve high rates to cover the cost, government can avoid the blame and say —- it's not us/government. Government has done what was asked for — brought the PUB into the process.

    And how would such higher rates be consistent with Ball's statement that ratepayers would not be held accountable?

    There is clearly a need for some straight talk (and to bring some integrity/clarity/understanding and cohesiveness to the quandary we find ourselves in).

  19. True, but ball et al, and most likely chess and jerry will be long gone and the after effects of the boondoggle will still be around, and how best to deal with it in paying it off. And I guess the Pub has been around for a long time, and if it is the way all governments should operate with a body setting the rates, then that becomes a part of how we govern ourselves. It was at Danny's whim, that the pub was by passed, otherwise muskrat would not have seen the light of day. So it's not really all about a current government, and who gets the credit/blame, it is about all future governments, and integrity/clarity/understanding/cohesiveness etc. as you say, and the people knowing their policy and allow governments to do only what the people say, rather than being bamboozled, misled, lied to, swindled and told what's good for them. But guess in the final analysis a government is only as good as the people that elected them and then as a people to prevent them from riding rock shod all over us. Cheers, Joe blow. I had better shut up for today, as UG would say, I have had more than my 2 cents worth.

    • No disagreement. However, it is not the PUB's job to take into account "…all future governments, and integrity/clarity/understanding/cohesiveness…" etc.

      Not do they have the duty and even the expertise/authority/obligation to do so.

      This Muskrat fiasco and our other debt obligations go beyond that.

      That's in part why I question//caution putting the PUB back in the picture being put forth/seen as an answer to the quandary we are in.

      I do not doubt that it may be part of a more comprehensive 'process', but it concerns me that government is using it a a political ply — one that is being used to get it past the next election —– and that is far, far from what is needed.