Guest Post by PlanetNL
Muskrat Dividends Will be Negative
While megaprojects have huge costs, their promoters love to
talk about the benefits. At the Decision
Gate 3 (DG3) final sanction stage in 2012, Nalcor developed cost and benefit
models that predicted not only that Muskrat was going to be billions cheaper
for ratepayers than the Isolated alternative but that the Province would reap many
billions in dividends. Key Muskrat promoters
heard from at the Inquiry so far still seem to cling to expectations of positive
dividends from the project.
rate affordability and revenue risk before sanction. As a result of one of the key risks becoming
realized, Government’s anticipated dividends will be greatly exceeded by
subsidies and mounting debt servicing costs.
These two-way cash flows must only be considered together in finding the
true dividend or net loss on the project.
Government and taxpayers will struggle to subsidize high Muskrat costs
in every year of the 50-year project payback term leading to massive new debt
growth far larger than the original capital cost of the project.
Dividends in 2012
to contribute equity of $1.6-1.8B.
Applying an 8.4% return, a fairly typical rate for Canadian and US
utilities over the 50-year financing term, Nalcor indicated Government would
get a $22.2B return on their equity. These
figures are nominal dollars, undiscounted for inflation or financial risk – it’s
these big unadjusted numbers that the promoters have frequently relied on when
talking about the return on Muskrat.
Nalcor calculated net Dividend gains of $4.5B.
The Muskrat “Interconnected” option (Muskrat Falls) was, by comparison,
$17.7B or 4 times better. The term
“better” should be qualified however: all this extra cash was to come from
ratepayers so it isn’t as though such extraction of capital should be
considered a simple given and without risk.
There is little evidence that Nalcor and Government considered actual affordability
to end-users in their pre-sanction studies – it’s almost as if ratepayers were
viewed as ATMs always ready to churn out more money on request. Assessment of this vital risk to project
payback was neglected.
Increase With Muskrat Cost Increase
2017, Nalcor recalculated Government’s equity investment at $4.0B. Not surprisingly, when Nalcor revised Power
Purchase Agreement cash flows in 2017, return on equity to Government was
scaled up accordingly. After all, the
contracts were written to guarantee 8.4% return on equity: in effect, Government
would simply be investing more money to make more money without any concession
or consideration for the impact on ratepayers.
this fashion for management incompetence is not unique. There are critics throughout the industry who
have eloquently expressed that wherever regulatory authorities tend to pass
costs onto ratepayers, public utility companies tend to be eager to build
expensive projects of questionable need.
On top of that, they are not afraid to incur cost overruns if they are confident
their regulator will pass on the costs.
consider two key revenue risks. One is
that the regulator could deem some of the costs were not prudently incurred and
therefore the ratepayers would not be responsible to pay back those amounts. In the case of Muskrat, Government chose to usurp
the local regulator, the PUB, with legislation holding the ratepayer responsible
regardless of cost: Nalcor and their shareholder aggressively mitigated this
aspect of their risk.
from post-project shock pricing. The shock may cause a dramatic elasticity
impact as consumers use less electricity or the most cash poor among ratepayers
simply can’t afford to pay their bills. This
latter category of risk presently poses great threat to Nalcor’s revenue
projections. They planned inadequately
to anticipate it and they have no viable plan to counter it -except to hand off
the looming losses to their shareholder, the Government.
Over a year ago, Premier Dwight Ball realistically spoke of Government recognizing that most ratepayers can’t afford a doubling of rates. Ball indicated a rate ceiling of
about 17-18 c/kWh that would require rate mitigation of around $400M annually. On the Uncle Gnarley blog, we think the
number will run higher, possibly in the $500-600M range but we’ll use the Premier’s
number for the moment.
revision of the PPA numbers shows Government receiving $151M as its return on
equity. However, if Government is
simultaneously doling out rate mitigation measures of about $400M, it is
obvious that Government will incur a net $250M loss. This is money it must raise from taxpayers or
it must borrow. Based on the Premier’s
heady and incomprehensible claim during the fall byelection that neither
ratepayers nor taxpayers will pay for Muskrat, it seems 100% certain that the net
cost of mitigation will be new debt.
and steadily increasing: rates need to rise significantly to keep pace. Just this October, Nalcor released new unmitigated cost projections starting at 24.2 c/kWh (HST incl.) in 2021, rising
to 33.3 c/kWh in 2038. The 9.1 c/kWh
increase represents at least $600M of additional revenue requirements.
return to below 8.4%. This would do absolutely
2021 is reduced by $100M which looks initially like a pretty dramatic
concession. The problem is that any
adjustment is applied to both revenue and cost simultaneously – they offset and
eliminate each other. Government has
$100M less income and they have $100M less subsidy to pay: the end result is
the $250M subsidy is unchanged.
dry. There will be a net public subsidy
lasting the entire 50-year term of Muskrat project payback. Return on equity is gone – it will always be
a negative, a subsidy. Government will
have to contend with the high costs of subsidizing the market every year to
ensure everyone can receive electricity.
These perpetual losses will hammer Government through the accumulation
of many billions in new debt.
considered an unrepayable dead loss. This
money was borrowed by Government with a series of bonds requiring annual
interest payments that won’t be serviced by the Muskrat return on equity that
was supposed to pay them. Each year,
Government will borrow more money to pay the interest, creating new debt that
will demand more interest the next year. It is a scenario that will repeat and compound
threat. Annual losses in the hundreds of
millions are bad enough but the new debt will also grow interest servicing
costs that will compound and grow exponentially.
debt spiral, review PlanetNL3 posted over a year ago. The bottom line worked out at that time was
that Muskrat could accumulate net losses exceeding $100B over 50 years. Even if half that or quarter that amount,
it’s still shocking to think that Muskrat is going to continue to waste huge
amounts of public money for decades to come.
troublesome problem. Very little of the
project’s $7.9B debt financing is extended to the full 50-year term. Substantial parts of the first $5.0B are due
on significantly shorter terms and much of the $2.9B second round of debt comes
due in the 2020s and 2030s. The notable
problem here is that Nalcor or Government won’t have the cash to pay off the
maturing bond issues. New bonds will be
taken out on terms that are surely not going to be nearly as favourable as the
bond markets quickly wise up and seriously degrade the Province’s bond ratings. The result will be significantly higher
interest costs than are forecast in the PPA.
Besides that, the same effect will hit all of Government’s bond
replacement activity, not just those related to Muskrat. This trickle on effect attributable to
Muskrat will impact the Province by many billions more.
Promoters Still Promote
Several of the biggest promotors at Nalcor and Government are
still to be heard from in the coming weeks at the Commission of Inquiry. Could they possibly still tout the originally
expected $22B in benefits that was supposed to flow into Government coffers as
though it were still going to happen? Could
they even talk of greater benefits such as the post-overrun $40B, meanwhile
ignoring the larger ongoing costs Government will incur? Will they refuse to acknowledge there was any
revenue risk in their plan at all? Will they recognize the absurd level of
increased debt that threatens to destroy the solvency of the Province?
could they possibly rationalize the issues now.
"….to build expensive projects of questionable need." Beyond that there is no questionable need, the facts are we did not need Labrador power for our minor needs. We have lots of water and wind on this island for more than our needs and at a much less cost, any iodit knows that. So can anyone get their head around what has been written by PlanetNL for a boondoggle we didn't need. And give away the power for less than production cost to NS. And the silly buggers claimed they would sell power into the New England States, yes, on the spot marker they said at much higher rates than normal. Dreaming in Alice and wonderland. I used to throw up when I read articles like this, now I get angry, the next stage is to become belligerent, and no doubt the next stage is to become violent. I have always been a law abiding citizen, but I cannot become held responsible for my actions when this finally kicks in and we begin to suffer the consequences for those buggers. What do you say, the people, when this hits home, will you become violent too, ask average Joe.
This. We could have fixed up the plant in Salmonier and been better off, sitting on the money we had accrued and just spent the interest in public sector upgrades like health care, roads and the like. But Danny needed his "legacy'. The irony isn't lost on me how the Sir Richard Squires Building and the courthouse named after Danny here in Corner Brook are in literal spitting distance – two architects of our squandered prosperity and grossly mismanaged finances.
I feel your pain Joe. Think of real things you can do to reduce your own, your neighbour's, and family's energy needs. Act locally. Think of of how energy is wasted in your community, and help change policy at municipal level to reduce dependence on non-renewable energy sources. Become a Land Protector. Love your neighbours as ourselves, This pain will pass.
Right on Joe. Violence has already taken place against NLPower with several poles taken down by a truck, on Beachy Cove Road. Just read VOCM news. Can't see it being an accident, must be deliberate.
There is no such thing as "NLPower".
Why does no one in Newfoundland know what "NL" stands for?
Puck off by…no ..no one only you. It is NEWFOUNDLAND POWER, a fortis company…..says right on my power bill…but anyway…what were you saying about NLPower. Says Joe blow. But here is one for you. Is NL ….Newfoundland/Labrador, or is it Newfoundland and Labrador. And what do you think about the 12$ billion boondoggle, is that NL.
Yup. Newfoundland Power.
Not Newfoundland and Labrador Power.
NL doesn't stand for Newfoundland.
Newfoundland Power doesn't serve Labrador.
Right on buddy..you know your stuff. You must work for Nfld power….maybe you are one or . the orginator of the scallogwags, or maybe a scallogwag yourself. You deserve a medal. Now must get back to where I was about NL power. I am like Alice in wonderland and will make words mean whatever I want them to mean. Cheers, Joe blow.
Heavy duty pre-sanction project planning work being outlined by M. Harrington. Has anybody got a handle on the manhours/subcontracts/costs incurred prior to sanction? $250MM – $500MM range? Was this rather intensive high level participation and cost carried in the Gate 2 estimates? Certainly a part of overall project development cost. Harrington had authority for $35MM.
It all started at a meeting at the Governor Pub way back in 2005/06 with Ed Martin, Gilbert Bennett, Paul Humphries and others. I am beginning to get the sense that the organization was way more complex than the project itself. Too much oil and not enough water from the very beginning.
The gov and some leaders have been running the province into the red, since the 1980's, applying Mobil methodology, (Such as sold by people like Harrington). We're rich byes, Hibernia will bail us all out. Muskrat was just an outcome from hydro engineers trained to think and act like some of the Calgary drillers, module yards, dirt movers, pad builders, tank farms and pipeliners.
My comment below is not directly on PlanetNL's up to date, detailed, and expert fleshing out of the travesty that is facing future NL generations, but in my own layperson's way I tried in the early 2nd half of 2012 and as best I could to make the argument that Muskrat did not meet the criteria for "sustainable development".
Below is my 2012 attempt (copied from my website)
Sustainable Development ? —- You decide.
"…development that meets the needs of the present without compromising the ability of future generations to meet their own needs" … (socially, environmentally, and economically).
United Nations, Brundtland Report, 1987
To obtain Muskrat Falls power, NL Hydro (our 'regulated' company) will be required to sign a 50-year power purchase agreement ("take or pay" contract) with its parent (unregulated) company — Nalcor.
This power purchase agreement will provide Nalcor a yearly cashflow (from year 2041 up to year 2067) that totals, for the 25 year period past 2041, $21 billion — $21 billion that comes from back-loading unnecessarily high electricity rates on our children and grandchildren.
This back-loading will NEGATIVELY impact our children's and grandchildren's future economic condition, their potential for economic growth, and in turn, NEGATIVELY impact their social well being.
Forced by contract to pay very high (New York City level) Muskrat Falls electricity rates for 25 years past year 2041, our children and grand-children are thereby prevented from benefiting from our already fully paid for, NEAR-ZERO COST Upper Churchill power.
Since Muskrat Falls imposes unnecessarily very high electricity rates (and continued debt servicing costs) on our children and grand-children (and thereby hinders their future economic growth well past year 2041), Muskrat Falls does not by definition meet the social and economic criteria NECESSARY for sustainable development.
By relying on a 50-year power purchase agreement that back-loads high electricity rates and debt servicing costs on future generations and that effectively prevents our children and grand-children from availing of the benefits of NEAR-ZERO COST Upper Churchill power, Muskrat Falls compromises (both economically and socially) our children's and grandchildren's future.
Accordingly, Muskrat Falls FAILS TO MEET THE CRITERIA FOR SUSTAINABLE DEVELOPMENT — and should not be sanctioned.
I have two questions. Will the questions in your summary (the second last paragraph) even be posed in this faux inquiry? If not then what? The commission will become truly Le Blanc!
Secondly your informed calculations assume that the 12.7 billion price that has been quoted for years now is correct. What if the evidence eventually shows that the price has escalated to 15 billion or more or will before the dam is filled and the MF energy is integrated into the Nalcor system, should not your calculations consider how a 15 billion cost will be paid for? At this point at least 15 billion is likely.
Bruno, the Judge strikes me as a no-nonsense guy who will not be afraid to say what the key mistakes were and who committed them. The Judge won't require teary eyed breakdown apologies from anyone and its unlikely we will get one from anybody.
I think the Judge is going to get a lot of it right. What he is yet to discover is truly just how bad the project estimates were. Will he rely on phase 2 findings to determine that? Sure would like to see a thorough estimate done by a strong third party estimator to provide an accurate baseline.
Sorry to burst your bubble Anon 15:57 but if you read the TOR you will find the inquiry is firing "le(Blanc)s
In short he cannot point fingers, assign blame, lay charges or generally do anything that resembles justice.
Da Judge has a rubber chicken! Here come da judge!
As illustrated here again, there is not enough money in Newfoundland and Labrador to survive this reality. The recurring structural deficits combined with the highest debt per capita of the country was already a terrible combo. The MF fiasco will double both the yearly deficit and the amount of debt.
As a normal self-protection, the most economically capable citizens fly from that environment and 0.1% of the population left already in the first 3 months of the year. This self-protection will keep going as long as people will not be re-assured that their government will be able to handle the situation without ruining their entire life and future. The thing is, here self-protection and common destruction are just the same reality.
But what hope can we give to Newfoundlanders when even the most aware about the situation like UG keep depicting Qc and HQ as the devil ?
Even if such help and support is provided, that mentality will have NL add it to its tradition of anti-Qc thinking and NL will just be seeking for more revenge when there was no harm at first.
That seek of revenge is the only cause of the entire MF fiasco. If NL does not die from MF, it will die from its next anti-Qc move until one is big enough to actually kill the province. Is that the faith you wish for yourself and your province ?
NL, you can not base your existence on hate. Free yourself from the anti-Qc brainwashing you have been victim of for decades. Indeed, many readers on this blog improved their understanding of the situation, but the author himself did not yet.
As long the leader does not free himself from this curse, he can not blame others for what he does himself. He can not envisage proper solutions because they all go straight against his mentality. And if the leader can not do it, then the ones following him will not do it either because by definition, they go to the same place and in the same direction as that leader.
So many here ask for proper leadership. You can have it, but you must make your leaders accountable for that. Here, your leader keeps protecting and propagating the root cause for MF. You told him in many comments in a past article, but he did not answered you. So ask for answers. Ask for a reply to your words.
Ask him to provide the factual basis for his opinion. Challenge him when his answer to this situation is to fight the contract with Emera in court the same way NL does against Qc. Offer him support and motivation to achieve such a revision about his own actions and words and show him how doing so is to be strong, honest and right.
As a support for this, I offered UG three 1 250 words texts about UC and how none of the blame against Qc, including his favorite one about the renewal, are unjustified. He did not downloaded the documents yet, but I sent them only 3 days ago.
The only way out for NL is to receive help and support from outside. The most capable one for providing such a support is Qc, so let works together, but for that to be possible, NL must acknowledge that Qc is trying to help.
You have an axe to grind and are making an ass of yourself.
There is not a wiff of anti anti Quebec bias. Grow up please.
This is a detailed analysis of the economics and has nothing to do with Hydro Quebec.
The only bigot here is you with your anti NL bias.
Bruno, your comments (above) fully reflects the thoughts I had after reading Heracles31 post.
Better said by you ( I have over the years often worked with citizens/reps from Quebec, found them sound/strategic in their thinking and wished we were more like them).
Never did feel the way Heracles describes.
Give it up Heracles for Christ sake! And don't be so condescending. We have heard all of that before. I have heard more NL bashing on this blog in the past two years, than I have heard in my entire life of QC bashinging. Cheers, Joe blow.
Maurice Adams, Joe Blow (17:01)-
(I shan't acknowledge Bruno's presence here until and unless he apologizes, regular readers know what I am talking about).
Gentlemen, you are arguing yourselves into a corner.
On the one hand you agree A- That MF is a gargantuan mistake, an instance of fiscal mismanagement which may well prove fatal to the future of NL. And on the other, you also agree, B- That anti-Quebec sentiment had nothing whatsoever to do with MF, as a project, going ahead.
Okay then. Suppose I accept both A and B. There then remains the question: why did MF go ahead? In terms of any Canadian province shooting itself in the foot, economically, MF is very much in a class of its own (The Keeyask Dam in Manitoba comes a very distant second), and thus its having been approved does appear to be a fact which needs to be explained.
So: If anti-Quebec prejudice indeed had nothing to do with it, what did? Over the course of reading Uncle Gnarley I have never once seen any hint of an adequate explanation given. Yes, instances of wishful thinking and corruption have been repeatedly identified and denounced, but the deeper question (Why should those things which caused MF to be approved be worse in NL than elsewhere?) has seemingly never even been asked, much less answered.
So I am afraid, gentlemen, that if you wish to convince me that anti-Quebec sentiment had nothing to do with MF being approved, well, you will have to explain what factor(s) -other than anti-Quebec sentiment, since you all so stoutly affirm its non-existence- account(s) for NL being the only one of Canada's provinces to have given birth to a single project which is liable to bankrupt the province in question…
Now Etienne, I am not going to get in any long winded discussion with you, but will briefly point out a couple of things, then it is up to you to accept it or reject it, and to be honest I don't give a fiddles f…k if you do or not. And I will just mention muskrat and not stray all over God's creation. As You and I know, and most Canadians, there are a few in this province that have used QC bashing to justify muskrat and all that that entails. And of course the first one that comes to mind is Danny. And let's add on another couple of per centage, like 1 or 2 percent of the population. So that leaves 98 percentage of the population that are no more anti QC than they are anti ON, or BC or NS or any other province. And I have lived here basically all my life but have travelled and spent time in all the provinces. Now if you have been following the inquiry and comments made here we blame the oil people, yahoos, lackeys and the whole nalcor group for being sleevenes and having self interest, and to follow the little dictators wishes. Now if you are not willing to accept that simple basic stuff, then that's your problem, not mine.,so keep on listening, to comments made here and the inquiry. Cheers, Joe blow, average Joe, AJ.
In short, and in my view, Muskrat went ahead because Danny wanted it to, and the decisions (and fake justifications) were taken to make it happen.
So that had nothing to do with either your (A), i.e., it was not made by mistake as such, or your (B,) that this province's citizens have a particular negative feeling toward Quebec.
It was a conscious, planned initiative that if properly assessed could never have been rationally justified (could not have been grounded/based on reason/evidence) — yet here we are.
This comment has been removed by the author.
Etienne Your self indulgent arrogance and NL bashing is getting boring. Why should anyone take you seriously when you have no insight and cant get through your head that MF is a testament to arrogance much like the arrogance you display. Fortunately you do not have the power of the principals of this boondoggle.
You are simply a fool.
As you just wrote yourself : "if properly assessed could never have been rationally justfied". You are 100% right here. Should the decision have been a rational one, MF would have been discarded right away. The thing is, the decision was NOT rational, it was emotional. So what are these emotions that pushed MF to the reality against all rational thinking ? Even in Nalcor's document, they had to use a P1 to make their number! Is that not clear enough that the prevision is wrong ? I mean, 99% of being wrong vs 100%, any real difference here ? It was written everywhere that the decision was not rational. Numbers were crystal clear about it like that P-1%. Still, the project moved on.
Now, another leader keeps acting on these very same emotions. Why should that produce a result any different ? If you do not want a second MF in the case NL survived this one, then you have to deal with these emotions that push people to the crazyest things possible.
I acknowledged in my post that many readers on the blog improved their global understanding of the situation and moved away from that anti-Qc. The thing is, the leader and author of this blog did not.
You asked for proper leadership. Here, you have one leader that is still guided by this anti-Qc thinking that yourself, like others here, discarded. So why don't you do more to keep your leader accountable for his actions and words ?
If indeed you would like better leadership in this province, you have here an opportunity to work on your own case. But from what I see, neither you nor many others are that interested to work on that case. After I asked for people to express themselves against UG's post, some did. But should we let that fall in the abyss, the anti-Qc content that was there will survive and come back.
You freed yourself from that anti-Qc ? Good! Now help others to do the same.
These emotions must be dealt with. So bring them on UG! Write here your evidence about how Qc is not your friend. Explain to us how the very goal for HQ is to abuse you and everyone in NL. Let us deal with all of that. Should you be short in time, just start with the texts I sent you in private.
But the root cause for MF being emotions, the case can not be fully covered before these emotions are dealt with.
OMG Etienne… You proved it again…so my one and only response is to simply echo Bruno….."you are simply a fool". Cheers, AJ. And my earlier comment to you was just a man to man chat. The same as I would say to my next door neighbour, some guy in BC or any point in between. So don't see why I should respond any differently to you.
And Average Joe Blowhard (aka Waldo) you are a tool. The misery inflicted, and which will be continued to be inflicted, on NL for the next 50 years stems back the poisonous toxins of those who blamed the UC debacle on HQ (QC). "The Big Lie" became fact and every premier used it to enrage the locals; and of course to get elected. Muskrat Falls is simply the Rosemary's Baby of the Big Lie. The inquiry has already shown that Nalcor, along with a "hit list" for MF critics, was ready to prime the pumps for more HQ/QC bashing. NL's Marie Antoinette (Kathy Dunderdale) embarked on such a crusade aided by bootlickers such as Bill Rowe.
Waldo boy , Eric, spout you venom any time you want, but it will just fall on deaf ears.. Cheers, AJ.
Au contraire Waldo, I think he speaks the truth
On the contrary, I don't think Bill Rowe would take kindly to that. He was not involved in that no more than your were. And when Bill Rowe was on open line, which he was at around 2010-12, if memory serves correct, he was at least one guy you could depend on, to tell it like it was, but I would say, not necessarily those that followed on open line, as they had a direct line to Eddie and he told them what he wanted them to say. In other words he fooled them. Cheers, AJ.
Chris Hedges in Wages of Rebellion (p. 84) quotes the Stephan and Chenoweth 2008 article ‘Why Civil Resistance Works: The Strategic Logic of Nonviolent Conflict’ , “… with as little as 3.5 percent of the population who are organized and disciplined, it is possible to bring down even the most ruthless totalitarian structures.”
He also quotes Emma Goldman (p. 82), “The mass clings to its masters, loved the whip, and is the first to cry Crucify.”
Once again, and to take nothing away from Mr. Learmonth's smooth effectiveness, and not to suggest that the inquiry TOR is designed to get at the root cause of this mess, Ms. O'Brien is dogged, effective and doing a fine job on behalf of ratepayers.
Just wondering why Etienne, Hercules, and Ex-Military (whatever that is meant to impart) insist (perhaps as anonymous trolls of something deeper routed) to continue to get their jollies weekly by stirring up the anti-NL/Quebec sentiment. They do not add any value at this stage to following the Inquiry other than to stir up s..t. N’est pas? Fred.
Hey Anon 00:10,
The only thing I would like to see is that anti-Qc way of thing disappear and I will do my best for that.
First thing to do is to provide people with proper information about UC so they can see that all they were told about was not true. As an exemple, once Tor Fosnaes acknowledged that the explainations I gave him were appropriate and that he was wrong blaming Qc – HQ for the way they do business. Despite this, at the same time, he also admitted that he still had ill feelings about the entire situation.
So that leads to the second thing to do: try to stop that anti-Qc speech. Unfortunately, UG himself keeps pushing that anti-Qc mentality. He did not for a long time, but did it again recently in the article about the decision from SCoC.
As long as Newfoundlanders will hear anti-Qc speeches, from UG or anyone else, it will be harder for them to deal with these emotions and stop that hate mentality.
That hate mentality is the root cause for the entire MF fiasco. If Newfoundland is about to learn the lesson for not doing it again, it must understand that unjustified emotions like that must not be relied on for governing the province.
Also, because NL is now too deep in it, you need help. Qc is in a good position to help you and I am pretty sure Qc – HQ would be ready to help you. But for that to be, people in NL must understand that Qc – HQ is trying to help and for that, they must not see them as ennemies, abusive, etc.
Many here claimed that the anti-Qc mentality did not exist or dissipated. Unfortunately, nobody proved it and we still here the anti-Qc speeches. So clearly, there is still a lot of work to do.
Heracles31 you have become an idiot troll. Noone but you brought up the UC. UG is not anti PQ. You have zero evidence and you make wild unsubstantiated accusations.
I suggest everyone ignore you.
Let you in a little secret Bruno…been there before, they write a comment under their handle, and then reply to it as anonymous…I used the Mr. Bean anology….. Of mailing themselves a Birthday gift or card, and then appear surprised they have mail…lol, cheers, AJ.
It would be appreciated if we could avoid (cheaply) attacking the messengers but rather debate the points that they brought forward.
When I first contributed here about a year ago, my motives were to help find ways to get out of this mess (looking for "win-win solutions" if you recall). But also to correct many misconceptions feeding the indeed considerable Quebec-bashing on this blog. Most of my observations came from reading the different court cases. I just wished more would have taken the time to read those, particularly the historic backgrounders which were very informative (and "proven in court")
Since then, Heracles and Etienne came on board with (IMHO) extremely valid arguments, and way better English skills than me 😉
Furthermore, the local coverage of the UC contract still keep using wordings like "one-sided", "notoriously lopsided", "stark imbalance in profits" and what not (I'm excluding the less diplomatic terms…). Bien sur, no mention whatsoever of HQ's contribution.
And all those reports are re-used as is by our national English speaking medias. Which in turn are also re-used "as is" the US medias – when they bother to cover UC. This negative coverage of HQ/Quebec has a cost (and I must admit, pisses me off utterly) but we must admit, it definitely doesn't improve NL's image either.
The anti-Quebec has indeed decreased in the blog, but we are still far away from presenting / endorsing the whole reality of that 1969 UC contract. I guess it feels so much better to be perceived as the victim.
Basically, HQ took ALL the risks pertaining to CF the same way NL took ALL the risks for MF – thought with way different motives / level of expertise.
The big sell-off occurred when NL gave away the whole Hamilton river water rights to Brinco for 99 years, for peanuts. THAT WAS THE BIG DISASTER. But somehow, nobody complains about this – nor any NL historians. I guess British investors (Brinco) are by definition honorable, as opposed to your neighbor…
I really messed up above paragraph order, but I'll refrain from deleting / correcting as it might be perceived as suspicious by the previous poste… 😉
I forgot to mention the superb/professional contributions of Bernard Lahey. I also admired his diplomatic tone –
eventhought I disagree with his appreciation of the Feds "enabling" role ;-).
Anonymous20 November 2018 at 17:30 I was coming to that conclusion that these trolls are masturbating by posting anon to their bigoted posts. We have a good example here!
Tweedle Dee (Bruno) and Tweedle Dumber (AJ) don't like comments of people from QC or NL unless they fit their Malonesque views of HQ/QC conspiracies. MF is the poisoned fruit from those theories.
Again signed Eric.
I think the point raised by most Quebec based contributors to this blog is that we have the impression that NL considers that collaboration with Quebec is political suicide We don't think that is fair but we are not unbiased either. Certainly, Ron Penney, a former senior civil servant in NL seems to agree. In his guest post of October 2018 on this very blog, Mr Penney claimed that "When Mr. Williams became Premier, any suggestion of dealing with Quebec was anathema and our energy policy became one based on revenge for the inequities of the Upper Churchill project and the obstacles placed in our way by Quebec to restrict access to export markets". I will never forget one anonymous comment to my blog post of December 2016: the reader explained that NLers had a responsibility to their grandchildren to plow a highway around Quebec. I replied that perhaps he should feel a responsibility to his grandchildren to make the best deal for the future of NL. As Mr Penney points out, ex-post at least, collaboration with Quebec on Gull Island certainly would have been in the interest of Mr Anonymous' grandchildren.
You miss the point Bernard. Collaboration with anyone to develop Gull is folly. Remote generation is dead. It cannot compete with sun wind and battery storage. Let the NL PQ bickering go! It is not the issue. Your bigotry is the issue and it is high time you let it go.
Maybe read it before responding – I was talking about the 2002 Gull Island deal that would have been much better than MF. However, I am surprised that UG allows you to insult people liberally. People like you are turning this blog into something resembling Youtube comments
Which is worst to call someone a bigot or dumb? Bigot…intolerant of others opinion. Dumb…stupid. Are they in the same catagory? Have to ask Trumpie..I guess…
Bernard, it is too simplistic to say that Gull would be better than Muskrat. In all probability, Gull would be a huge money losing mistake had it been developed. Maybe not as big a loss per unit of energy as Muskrat but a very big loser. HQ must be glad it did not develop that project and NL should be as well. Must agree with Bruno on this one. I also agree with him that the 3 Quebec regulars here are trolls for continually whining on as they do. All they do is make the rest of us wary – their own alienation is a self fulfilling prophesy.
Hey Anon 12:47,
Please, allow me to use your post as an example for UG. As long as you will not hear the proper story from -HIM-, you will stay on your actual typical NL position. To hear the story from someone in Qc like me can not do it for you because, by definition, that source is corrupted, of bad faith, etc.
So come on UG. Bring your elements to the table so we can set them in order. You said that Qc was not your friend, that HQ plotted against CFLCo / Brinco to get the renewal and more. So bring your evidence now. Let us talk about this. As this is at the core of the politics that produced MF, it perfectly fits what you described to me as the very purpose of your blog. You told me how you regretted that your blog often ended up limited to power efficiency when your goal was politic.
So come one. Eat your own dog food. Bring your politics and lets talk about them. As you see, despite some here broke free by themselves, many will not do it before you. You told me that you did not believed your blog was that powerful. Yes it is. Your blog is way more powerful than what you imagine or expected at the beginning.
So come and talk about this. Only good things can come from such an open discussion. To heal such a wound may be painful, but it is desperately required before the infection grows beyond control and proves itself fatal.
Think Heracles is shadow boxing UG. Be careful, UG will get you with his cane.
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Anon 12:47 – I felt it was a fairly uncontroversial statement to say that the 2002 Gull Island deal between HQ and NL would have been better for NL than MF. I think it is safe to say it would have been better for HQ as well because we would not have developed the expensive project at La Romaine. In any event, I was quoting Ron Penney, former senior civil servant in NL who wrote an excellent post on this very blog in October. I suggest you read it. However, I find the level of discourse in the comments section of this blog has deteriorated significantly and the number of personal attacks and insults is getting out of control. I have deep roots in NL so I wish you well. I think I have always treated others with respect in the comments section but I have no interest in engaging in the type of childish name calling that I have seen in the comments section recently.
In any event, I hope you figure this out.
Please help me, Inquiry, to understand where pre-sanction costs for front end engineering for MF are buried? That is, all costs prior to December, 2012? Are they part of MF capital costs? Are they buried within Nalcor’s oil (and gas sector) statements or on the books of Gov-NlL consolidated statements? How are they accounted for? These costs are substantial and have been been for several years. Recall that a false start on Gull Island (Lower Churchill) occurred through 1973-75 and was shelved due to marketing and financial failures. How much and how was that cost written off? Beyond the purview of the present Inquiry, no doubt. And, how about cancelled, stopped projects such as 73-75 Lower Churchill; what were lessons learned from that exercise? We are not alone in stranded costs on electrical developments over the years. There was Kermano Completion project in BC; the Roddickton wood chip fired steam turbine in NL; Lepreau nuclear had its difficulties in NB, and Ontario Hydro is rift with many failed politically inspired energy plans. As others on this blog have already pointed out, have a look at what’s happening currently in Manitoba and also in BC. The theme seems to be that, in the past 6-8 years, remote site hydro developments have lost their shine, largely because of southern markets being served by emergence of natural gas and other alternatives. Will the Inquiry question this about considerations prior to MF sanction? Or was it known and taken in context as to last chance to develop LC to fulfill a previous bias? Fred
Main reason why remote hydro sites lost their shine is that the most attractive sites have been developed long time ago. The result is that still unexploited sites are not as good as the ones that got developed.
LC can be an exception to that. LC should have been developed long time ago, but NL always refused to do it. Doing it would have require working with Qc and the typical anti-Qc mentality prevented that. As such, LC remains today as a good enough site to be developed despite there are not that many anywhere else.
Also, previous developments of LC that failed and got stopped tried to route the power through the Atlantic provinces. As we know, this route is so more expensive, it makes the project non-viable. As a reference, HQ answered to Nalcor that a power line over Qc for 3000 MW would cost about 3 billions. MF said it was too expensive and went for the 3.7 billion price tag of the actual 500 MW link. Price per MW as offered by HQ was about 14% of the price for the anglo-saxon route. 7 times cheaper. That helps a lot to understand how and why developing GI with the anglo-saxon route failed. Fortunately for that one, it failed when it was still time to fail. Here, MF failed but way too late.
Nice to talk with you,
You raise some important questions Fred. The Inquiry to date paints a very heavy work up from say 2005 to sanction. I would guess between 0.5 – $1.0Billion spent on consultants and related expenses in development costs. This seems unusually high by comparison to historic similar project cost models. Westney could provide a better analysis, if asked. As Bruno and others have commented, the age of mega remote Northern river hydro development is near exhausted. Fools rush in…
All good points Fred, and focused in the right direction pre-sanction decisions/assumptions/costs/forecasts/methodologies/planning/comparative time frames/options (selections/dismissals), etc., etc.
Maurice, mistakes on infrastructure investments are common. Quebec also made a major mistake with the Romaine project. BC has site C. However, it seems to me that the main problem with MF is that it is so big relative to the NL economy that failure would mean disaster. This is especially true in the context of a Province such as NL which is already heavily leveraged to energy prices.
PlanetNL here to report an error in the posting, thanks to the astute eyes of David Vardy:
About midway down, the PPA return on equity to Government NL was indicated as $151M in 2021. This is incorrect. $67M of that is flowing to Emera. GNL will get just $84M. Therefore the net loss to GNL is roughly $320M rather than $250M as written.
Obviously this only worsens the long term scenario for GNL losses. The intent of this post was to ballpark the long term losses rather than put a precise number to it. This increase in annual losses certainly pushes the total long-term negative return on the project billions higher.
Can you ballpark the economics if MF comes in at 15 billion?
12.7 Billion is already enough to bankrupt the province. So why should one minds 15 ?
If there is no way out at 12.7, there will be no way out at 15.
So instead, tell us what is your way out that would do it at 12.7 B but may not should MF rises to 15…
Have to be careful with weasels. They engage someone to do a study, and they give them the information and direction of what they want to do, and say a honest report. Then if it does not suit their needs or thinking, then they say we are paying you good money for the study, so can you change your report to including what we were thinking and what you are saying to reflect what we want in the report. In other words tamper with the report to give us what we want to hear. That is unprofessional, the only think that is professional is the report writers stick with their findings. We have seen that a few times now, as the world class experts try and change a final report or as I see it says Joe blow.
Bruno, taking from the Commissioner's lecture on "relevance", I can see Anon's point that it should no longer about the magnitude of the economic penalty NL has incurred. Eventually, the true cost of the blunder will be known. Maybe, we dissenters, concerned citizens, or bottom-feeders can do our bit in keeping a broadened examination of policies and actions which got us to this very unsatisfactory result. I am more focused by age, on wrong paths taken by successive NL governments, since the OPEC crisis of the 70's. Why was untrammelled economic growth on the Avalon permitted to proceed based on unlimited supply of cheap Labrador hydro power supply? Let's keep the Shadow Inquiry broadened. The fact that NALCOR blew their pre-construction budget to hell, and still promoted sanction is now academic. Why were they allowed to do this to cause financial and environmental hardship?
Robert we all know the genesis of MF. We have all along. It has nothing to do with the need for power and yet everything to do with power of a political bully with a Napoleonic complex.
The LeBlanc inquiry is a farce by design. Our informal shadow inquiry is the only useful analysis taking place.
To be useful means that it can be applied and beneficial to something. So what this discussion can be applied to and how is it beneficial ?
Consider the benefits if there is consensus to modifying NL Energy Policy to result in more passive consumption of non renewable fossil fuels. Sustainable urban planning may occur which would also be beneficial.
For that to be a benefit, NL must be. With such a debt, deficit, demography and more, no need to have an energy plan for the soon-to-disappear province of NL.
Eric your cynicism stuns even me! Win lose or draw our "Shadow Inquiry" has changed energy policy in NL forever. The madness of letting Napoleonic politicians squander public resources to slake their egos is over!
The genesis of MFs says Bruno is DW with his Napoleonic complex. For Heracles and Etienne,it is all on account of hatred by many or most of Nflders toward Quebec and HQ. Others might say it is just a mistake or due to incompetence.
Let me suggest an alternate explanation. It is due to our CULTURE.
So our culture permits all of the above and more to be factors, but none by itself was sufficient to cause this fiasco.
Our culture for centuries has allowed us to go from one blunder to another, and nothing has changed.
Perhaps one could even put a percentage on which bad parts of our culture permitted this blunder. For example : hatred of Quebec people of PQ or HQ by average Nflders, I would say 2 -5 % . SO this leaves plenty more for blame.
Now recall how Liberty was consistently critical of Nfld Hydro and their attitude of poor maintenance of the power grid and power infrastructure assets which led to DarkNL, and of the use of rotating outages as a method, seen only in 3rd world countries.
CULTURE! It is part of who we are. It has good aspects and bad. We must define the bad, root it out, and change for the better. What does other UG and our PQ friends think?
Liberty used the word CULTURE in describing the porr attitude here of how our power assets were neglected and operated. Does not the many Nalcor witnesses show such a sick culture: the polar opposite of world class experts.
Considering that it is pretty rare for the worst and most terrible of all things to be from a single source, I see a valid point in your argument. It is true for airplane crashes and so many other things. In these complex systems, it takes a mix of circonstances to push the system out of its limits and crash it that bad.
The point I would not agree is about trying to measure each factor and to attribute a weight to them. Saying that one factor is 2 to 5 % is risky. It risks to hide the importance of the factor because at the end, as all of them were required, all of them were of similar importance. Quantitative analysis is not always better than qualitative. In fact, I think I witnessed more bad quantitative analysis than qualitative ones.
As for the rest of NL's culture, I do not know enough about it specifically to express myself. I am happy to trust you on that one.
Nice to talk with you,
Heracles: I think we can assign weights, but like polls would have a range of how accurate, example: the anti Quebec factor, if 2-5%, and if we say 3.5 % as a reasonable number ( we do not see much anti Quebec on this blog in comments, except a couple of people who aim at you and Etienne), but now also for our culture we get the DW factor, and KD, and Nalcor PR strategy to increase that anti Quebec feeling for their purpose. This can say increase the antiQuebec feelings from 3.5 say 4 fold, to 14 % of our population, for political purposes. For elections this can be significant. So Bruno puts it all to DW, and he can increase the antiQuebec from 3.5 to 14 % to help with the Muskrat sanction. So Bruno sees the DW only, and you see the anti Quebec only, but they have synergy,and varies, and together say about 14 % of the cause of this fiasco. So then we need to assess the other culture factors.
And as a fan of Ray Guy, we can include the anti First Nation factor as part of our culture. Consider the impact of Labrador First Nation people and Nflders turned a blind eye to that for many decades and too for MFs impact on them. So the Shanawdithit(she the last of the Beothic, died around 1829 I think) curse, due to our culture against the Beothic and present day First Nations. For now, put that at 10%, others may suggest more or less.
That our culture finds it "acceptable" to have poor quantitative analysis, I suggest as much as 40 % the cause of MFs. The quantity of the power demand forecast,0.8% for 50 years, the 18,000 bls of oil burned per day, The price projection for oil cost, the housing demand, the future population, energy reduction from technology improvement, the quantity of power reduction from elasticity, export market revenues, and other quantitative factors, like chosing P1 for construction schedule, P50 for risks. Beyond imagination to get so such totally wrong, unless one ignores sound quantitative analysis.
Let me throw in a figure of 20% for our culture having the Frog problem, as in the Frog and OX fable told by Heracles. So DW wanting Nalcor like HQ. And DW calling Nalcor people "world class", and now we see them all as frogs, they now bursting before this Inquiry, starting with DW and Wade Locke and a steady parade of little frogs who wanted to be an ox. But our culture is such that we little questioned them. Most saw them as ox,to vote for them, now we see them as frogs. Why did we not see them as frogs? Unless our culture changes more frogs will misleads us. Heracles says Quebec people would not put up with such people, but we do. So, a culture problem.
Apathy: I would assign a figure of 10% as to describing our culture. Nothing can change for the better , so why try. Robert Holmes talks about a sustainable energy plan. We abandon our environment and fish resource and other resources and see only petro dollars. We do not hold politicians accountable. We are too content with the status quo. We have little that is world class and seek little as to improve value from high competence. Apathy is a feature of our culture, perhaps from the days of the fishing admiral rule and the governors under the British Empire and colonialism. Is remains a big part of who we still are. UG called for a revolution. Little sign of it.
And too, we have a culture of living in fear. Dave Vardy has spoken of it. Most commentators on this blog acknowledge it. That is why they are anonymous, because their relatives will suffer financially if they engage in their freedom of expression. Indeed, DW uses his clout to threaten law suits, such that even Judge Leblanc was critical of him. SO the fear is real, caused by those in positions of power. Such fear is part four culture. It was used by priests, but not only by priests. Priests and politicians, and the justice system wield the sword of fear on those who speak up against injustice. Assign 10 % to our culture of living in fear, to speak up against Muskrat Falls. Some were jailed remember, and many charged with crimes.
A culture of accepting nepotism / cronyism / corruption.
Carla Foote was gifted a well paid job at a mueseum. “I had made the determination that Carla Foote was deemed the most qualified person to fill the role,” said minister Mitchelmore.
The school board (documented by the auditor general) gave two expamples of unqualified people being given jobs, receiving rapid promotions, and being given higher saleries because they were the only candidates in secret job competitions.
We elect people with a grade 11 education and wonder how important ministerial positions got filled with clueless people.
We see from the testimony at this inquiry that many senior public sector people are either plying dumb, or really are incompetent. We also see people like Dr. Bruneau and Dave Vardy that clearly are excellent. Good people are not welcome in positions of power.
After years of patronage appointments to boards of directors and senior public sector positions, the public sector has failed and beyond redemption. It is so rotten and incompetent that you'd have to fire they all and start over.
The biggest failing is that we accept this yet do nothing about it. It is like after a long history of bowing down to our colonial masters, we automatically accept our fate and willing take the punishment from the oligarachy and assorted sociopaths.
Anon @ 10:04 While I partially agree with your point about "electing people with grade 11 education and wonder how ministerial positions are filled with "clueless" people"
I would say 2 things:
1. Just because a person has a grade 11 education does not make them "clueless"
2. You must realize that a very large portion of the voting population in NL also have a grade 11 education (or less)
Just to clarify my thoughts on grade 11. Grade 12 didn't exist when I went thorugh the system and I felt it was a great education overall. Some people don't continue with formal education but never stop learning and become very smart and wise as they age. These people would make competent elected officials. On the otherhand, there are lots of ignorant and unwise people with university degrees.
Never the less, someone that has no formal training is at a disadvantage. If you are head of the treasury board or minister of finance and don't understand international finance, then you are unlikely to be able to provide much guidance to the department and are really at the mercy of the DM. If you are fortunate, the DM is a professional like Dave Vardy. Same for health or natural resources. Had Dr. Bruneau been DM of Natural resources or Mr. Vardy been DM of finance, Muskrat Falls would never have been sancctioned.
I think that if the senior public service (managers, directors, assistant deputy ministers, deputy minister) were there by merit, it wouldn't matter if the ministers were randomly assigned to portfolios. I think it would be ideal if the minister of fisheries had a degree in biology or great knowledge of the fishery, the minister of health was a medical dictor or a nurse, the minister of finance had a related degree and banking experience, etc.
Perhaps a bigger question is this: What is the role of an elected politician? Is it just to symbolically head a portfolio and bring up issues affect his/her constituents? Should we expect more?
I think Ray Guy defined it best when he suggested that our history springs from a curse laid upon us by Shanawdithit. We blow ourselves up as something very important ("world-class") until we ultimately burst, over and over again.
I have yet to see anyone from Nalcor on the stand who could be considered WORLD CLASS with respect to HYDRelectric projects. Not even close.
Nalcor should NOT have had OIL Project guys IN COMMAND of a hydro job !! By all means put them with Jim Keating on the OIL side.
Nobody would let a world class dentist perform heart surgery – not even Danny Williams, in fact the NL doctors were not good enough for him – he went to Florida !!!!
WORLD CLASS by ass
Wow PF, you got her all sized up. Lol. But do not necessarily agree with all your points. I think most of your cultural points apply equally to NS or any other province in a general way. We are a people that settled here a few hundred years ago, and the same origins as other Canadians, mainly Europeans. So why should we be any different? And basically we are not. Agree with you on letting holyrood deteriorate, as I have said before that was sabatobagd by the nalcor crowd to prove we needed the power. Maybe our isolation as an island has had some effect on our cultural and has not allowed us to grow as most other provinces, and we should have fixed that soon after joining Canada, with a fixed link. Yes, that would have been a better project than Joey fiddling with hydro power. Maybe hydro power later in collaboration with QC would have been much easier. And who really wants to live on an island with such harsh climate, I would suggest only those wildly independant, brave souls, and of course some net wits. Will also comment briefly on Bernard's comment of earlier today. Yes fine to Quote Ron Penny, we all know him. But Bernard, come on, to quote a single anonymous who wanted to bull a road around QC, you wil find a few crazies everywhere, yes even here in NL. They may even burn down their neighbours house or shoot you between the eyes, and they exist everywhere. As for Danny's followers, yes to some he was the messiah, so they would follow him anywhere, March on Ottawa and seize it. Now I don't know a lot about QC politics, but have always followed most Canadian politics, but was not Lucien Bouchard, And Jasques Pazarrio, (apologize for spelling, didn't look it up) messiahs as well, Jasques just need a few more votes, ethnic votes he said, and it would have been a free QC, but not sure free from what. But do agree with Benard there is bias on all sides, the nature of man, but think it has also been blown way out of proportion. And agree we should all cut the crap, and admit I some times do it for laughs, or if someone elbows me in the corner, I will elbow them right back. Ask Gordie Howe, and AJ. Lol.
Heracles and PF's discussion (anti-Quebec sentiment, NL culture, or both?) is very interesting and just the sort of thing I was hoping would be brought up in the comments.
Before I continue: I hope everyone sees how important it is that the root cause of MF be correctly identified? However MF ultimately plays out for NL, economically, is frankly not that important: if the root cause remains untreated, it is inevitable that other MF-like projects will arise. If the root cause is correctly identified and, as a consequence, remedied, then at least no other MF-type boondoggle will burden NL's economy again. After all, as the saying goes, when you're at the bottom of a hole, the first step is to stop digging.
On this note, let me explain why the "Newfoundland culture" explanation is, to my mind, completely unsatisfactory. Quite apart from the fact that nepotism in politics is not exactly a specifically NL problem (If anyone here thinks that Justin Trudeau or Doug Ford got their present jobs on pure merit + competence, well, leave me your contact info, I have a bridge and a coffee plantation up in Northern Quebec I'd like to sell you…), there's a much more serious issue: chronology.
That is to say, it is undeniable that NL has seen its cultural distinctiveness erode over the past several generations. So if MF indeed is first and foremost the product of an unusually corrupt/authoritarian culture, we would expect to find more manifestations, indeed more blatant manifestations, of this culture as we look back over the past generations.
The trouble is, I cannot see a shred of evidence that NL was ever more corrupt/authoritarian than other Canadian provinces. Really. I know that the end of Responsible Government and the birth of the Commission of Government in 1934 is often used by some regular commentators here as an argument to support the claim that there is something uniquely dysfunctional about Newfoundland culture, but not to put too fine a point on it, this is nonsense. In the thirties *all four* Western provinces went bankrupt and had to be bailed out by Ottawa: had they been separate Dominions they would probably have ended up under a Commission of Government very similar to what ruled Newfoundland. All five went bankrupt for the same, strictly economic reason: heavy over-reliance on the export of raw materials as a foundation for economic development: once the Depression destroyed demand for whatever raw materials they had been exporting, and revenues collapsed as a result, bankruptcy became inevitable.
Furthermore, I have already quoted Newfoundland premier Walter S. Monroe (who served as Premier from 1924 till 1928) who, on the subject of Labrador, told the Provincial Assembly that “this country (Newfoundland) will never be able to develop it.”
The above does sound like a more sensible sort of politician than what NL has had recently, wouldn't you all agree? Yet this sensible-sounding politician was Premier of Newfoundland at a time when its isolation and cultural distinctiveness were FAR more pronounced than today.
So: How could MF be some kind of manifestation of a primordial, corrupt-to-the-marrow Newfoundland soul today, when Newfoundland politicians of yore seemed utterly uninterested in massive spending to create ego-gratifying monuments to their megalomania in Labrador, or indeed anywhere?
Marcello Ferrada de Noli is a psychiatrist and amazingly accomplished person. He sometimes refers to the "duck pond", something that I believe also applies to Newfoundland.
Here is a brief exerpt followed by a link:
"One of Sweden’s big problems in reference to political debate is posed by the small size of the country’s cultural elite. At the end, there is no real debate. This is possibly because in Sweden everybody within the political-cultural elite seems to know each other, or is related with each other for one reason or the other. All this produces a high “internal” mobility of journalists among publishing employers. Also, there are not many employers in Sweden. The consolidation of ownership in Sweden’s main newspapers reduces the number of owners basically to two:
The result is that a significant number of Swedish journalists, together with other important segments of the “cultural-elite” manpower, transfer from one point to the other within a reduced perimeter in job availability. Also, the consolidation of ownership in the media results in a quite monolithic ideological perspective under which employed journalists would produce news-articles and columns."
In Newfoundland we have a about 500,000 people with similar origins and it is quite common to ask people where they are from (small town) to figure out if you are distantly related to them or went to school with them. If you are in a position to hire, there are always people asking if you can get a job for a relative. There is only one real employer, government. If you took away core government, Memorial University, the health authorities and crown corps like Nalcor, there wouldn't be a middle class to speak of. It is common to see powerful peole (say a judge) with family holding top positions in other parts of government, sort of like how Carla ends up with a senior position because her mother is governor general. It is very dificult to avoid conflicts of interest.
I think there is more nepotism because of the small population and lack of jobs. Families take care of their own. As for cronyism, that goes on everywhere except that we have little other than government. If our economy was dominated by business it would be less noticable – business is profit oriented and need people to make a profit so you could hire friends, but they'd need to be productive or would come back to bite you – especially if the new hires were not qualified. With government dominating the job market, getting a job via connections is often the only way in. In some departments, all summer students and work term students have a parent in government or they got the job via a politician's constituenty office. Rarely have I been able to hire a student based on merit (like good grades and an interview).
I have certainly seen a lot of corruption and don't know how we compare. I remember hearing about kickbacks on contracts in Montreal, and SNC has been in trouble for corruption. Perhaps we are no worse than average.
Ask around the STJ Firehall,HMP, RNC for those who got helped by Tom.
June 2011: The Honourable Kathy Dunderdale, Premier of Newfoundland and Labrador, today announced two senior appointments … Janet Vivian-Walsh has been appointed Assistant Deputy Minister with the Department of Education.
August 2012: The Honourable Felix Collins, Minister of Justice and Attorney General, today announced the appointment of two individuals to the position of judge of the Provincial Court of Newfoundland and Labrador … James Walsh has been appointed to Provincial Court in St. John’s effective September 3.
Was it pure chance that Janet was the best candidate for ADM and Jim was the best local lawyer to become a judge and they are also married? Or is it more likely that they are well connected politically. Jim was born 1981 so only 31 years old – were there no more senior lawyers that had proved their wisdom and would have been more appropriate?
You can find these things all day long in Newfoundland — a small group of families handsomely profiting off the public trough, collecting the largest salaries and doing each over favours.
I'd love to see a government wide org chart of management with links that show (director was Kathy's campaign finance manager), or governor generals daughter (Rooms), Dwight Balls brother Dean (municipal assessment agency) etc.
Another great chart would be the network of people associated with a certain former premier. (hockey buddies, former emploees, business connections etc.)
/rant — my point here is that family and personal connections get you appointed to high level jobs in Newfoundland. This means that judges, assistant deputy ministers, deputy ministers and board members are there because someone appointed them for political or social reasons. They aren't there as a result of any kind of professional job competition. And it shows.
How do we fix this?
There is a common saying in Nfld, that I have heard all my life, over 60 years: "It's not what you knows but who you knows". So certainly with government incompetence with the right connections gets you further than high competence without such connections.
Anon 8:56, as for the crazy who wanted to plow a road around Quebec I totally agree – that is just one person. My family arrived in NL during the potato famine and my father left in disgust in the 1950’s. My father never returned and I have never been to NL. I was trying to give you an idea of how NL is perceived by people like me. We read what Ron Penny has to say and we wonder if distrust of Quebec affects decision making – If that is not the case fine. But the main challenge for all of Hydro projects in NL is that they are so big relative to size of NL’s economy. Infrastructure mistakes are common, Quebec has made lots of mistakes as has BC and, well, everyone. The problem with MF is that it is too big to fail, especially in an economy like NL which is heavily leveraged to energy prices.
Well spoken. Fred
Hi Bernard, since you singled out my comment to you, I will reply..but right now I have important things on my agenda…and have to run. Cheers, AJ.
Devil is in the Details. The internet of things (IOT) provides more paper than one individual’s capacity to research. For example, the Inquiry is now pushing into ?.. volumes of submissions; a tremendous number to absorp. I am trying to look at power contracts (and catch up) relating to all Labrador related ones (both UC and now MF). I like trying to simplify things. I need help here on interpretation of facts.
1. In 2014, the Twin Falls block (225 MW) ended; to be renogiated. It seems that IOC and Wabush Mines pay currently around 5 mills (0.005 cents per KWh) for their power. Is that correct? What are the terms?
2. In 2041, CFLCO own the controlling interest in UC. It is not exclusively NL at that time; being approximately 2/3 NL and 1/3 HQ.
3. A few years ago, HQ gave up its clause to require 3 years notice to change recall block (300 MW) for (Labrador?) use to NL. There are clauses in this block that it is not to be used in Quebec. It seems that, currently, this entire block has been spoken for, by NL. Yet, only 170 MW of that amount is actually being used on possibly some take or pay agreement. Feeding off that that 170 MW, I can say fairly confidently that HV-GB on that previous long 138 kV line from Churchill only accounts for about 40 MW of that amount (purchased at 2 mills per KWh at the busbar). Where does the other 130 MW go to? Is it the townships of Labrador City- Wabush? Plus, I believe the mining loads there. The accounting is not transparent. Perhaps, there is some double accounting in this to write off the Twin Falls hydro development that was absorbed in a way that may be unfavorable to one of the parties in the UC contract. I don’t think so because there have millions of $ spent pouring over contract details by both parties?
4. So, moving forward, of the 300 MW block with only 170 MW being used in Labrador, we are led to believe. Does the contract allow for the remaining unspoken for 130 MW to be used only in Labrador or Labrador/Newfoundland? It seems so to be the later and, as long as it none are used in Quebec.
5. So, again, the 300 MW block can’t be sold in Quebec. Or is it? The guaranteed winter availability clause amended in the UC contract seems to be creative for both CFLCO parties to gain from demand (MW) but on the backs of essentially selling more energy (MWH). If so, it did not violate the original UC contract but amended it. So, based on the GWAC, is there sufficient precedence to sell more energy to HQ, surplus to Muskrat Falls capacity when MF is on stream?
I’ll stop there and speak to Maritime Link questions in another posting.
It will be my pleasure to help you as much as I can.
Twinco block indeed was reserved only up to 2014. After that, because there was no precision in the text of the Power Contract, the block would have presumably return to HQ who was buying everything except what was reserved. But in the recall case, based on the Lease Act, courts said that NL had priority on power not already sold or committed. Because the Twinco block was now in a kind of grey zone, HQ preferred to offer it to CFLCo for them to re-use as they wish. Also, because by that time CFLCo needed more income, it was a good way for HQ to support CFLCo. As for the price charged by CFLCo, that I do not know. But what is sure is that this block is CFLCo's and will remain as such.
About point 2, you are right. CFLCo is basically 2/3 NL 1/3 HQ. The big difference is that after 2041, CFLCo will control the reservoir and schedule production. They will also sell to whoever they wish (unless a new contract is signed until then of course…). Once CFLCo paid both dividends it is required to pay to the government, the rest of the benefit is distributed among shareholders. At the end, you can consider that NL will receive 75% of the benefits and HQ, about 25%.
For point 3, you are right that HQ waived the requirement for 3 years about the recall block. Also, HQ offered NL to re-buy all of that power at a confidential price for a few years. NL accepted the offer and for years, that power was sold back to HQ but at a different price we can imagine much higher than the price of the Power Contract. After renewing this deal a few times, NL decided to stop doing that and to sell that power itself in the market. So now HQ charges wheeling fees only. From what I found, the end price would be around 3 cents, for which about 1.1 cent is for wheeling fees, a little less than 1 cent for the power and "internal" costs, leaving about 1 cent of benefit.
As for point 4, my understanding is that HQ waived pretty much all of these conditions and restrictions about where power can be used or not, to who they can sell, etc. Technically, by re-buying the recall block as they did for years, HQ allowed the power to be sold in Qc.
About the GWAC, that one is basically charity. CFLCo will keep more spare parts and expose itself to penalties should not all the power be available when requested, but such a consequence will probably never happen. The goal of the GWAC was to ensure CFLCo would achieve its financial objective of a return on investment of about 9%. For that, GWAC increases CFLCo's revenue to ensure all costs are covered and enough money is there for the dividends and benefits targeted by Brinco / CFLCo when they designed the contract.
Hope this help you to understand better the entire situation,
Fred, its vital you find the answers yourself from credible sources. Please don't take the biased hearsay response such as from H as the answer. There are not enough hours in the day to refute the BS and answer all questions.
Yeah Fred, ask Nalcor, they won’t steer you wrong lol
The goal of the GWAC fashioned by HQ was to keep CFLco financially alive such that HQ, the customer, could realize the lopsided windfall benefits of a grossly unfair contract until 2041 and not share with its partner, the people of NL. This outcome was cemented by the recent ruling by the lopsided SCC with 3 judges from PQ and 3 from Ontario, the upper Canadian controlled court, the most political court in this country.
By reading the court decisions, keeping CFLCo financially viable was indeed one of the factors.
But you do realise that a default would have triggered HQ's option to acquire the totality of CFLCo, right? (part of the 1969 contract)
But hey, you must consider those court decisions or the 1969 contract as "fake news" / BS biased hearsay anyways, so never mind…
Hey Anon 13:51,
Just to add to what AJ said, know that after the decision for CFLCo vs HQ, SCoC published another judgement. That one was Qc against Ottawa, where Qc claimed that Ottawa was not allowed to create the kind of centralized system they were doing for the financial world because that domain was of provincial jurisdiction. All of the 3 judges from Qc ruled against Qc. About that case, I again agree with the court when they said that the federal can not forces anyone to join their system, but they are still free to offer it to those who wish to join.
As AJ wrote, Rowe is the joke.
Come on now guys…troops are trolls .. Fake is fake… Sick is disk.. And lies are lies ..real names fake names, handles…ANONYMOUS …But when someone starts writing serious notes and signs with my handle …shows how low you can go .. And then this blog becomes hogwash… So UG ..may have to step in if this bog is to have any resemblance of reality and honesty. This is my first time online since early this morning. Cheers, average Joe, AJ.
Ex Mil, HQ's option to take over would have been politically unacceptable in a democratic country like Canada. PQ chose the high road to succeed in the continuation of the low road windfall profits to them alone. Suck it up, Brian Mulrooney was right on the money in his characterisation of the CF unknown windfall to Quebec because of the OPEC crisis coupled with HQ's absolute refusal to agree to an escalation clause when they had Brinco( and NL) on the ropes, shame on PQ. Come on 2041 and lets do a fair deal or shut her down!!
Hey Anon 17:16, there has been an unexpected collapse in energy prices since MF was sanctioned, do you think NS should renegotiate the MF deal?
"HQ's absolute refusal to agree to an escalation clause when they had Brinco (and NL!?) on the ropes"
That's utter fake info and you know it. The historic recollection (memo, letter, meeting minutes etc) brought by HQ (and also bizarrely CFLCo/Nalcor) confirmed very clearly in the courts that both parties (HQ and Brinco; not NL) knowingly did not include inflation/deflation clauses.
For HQ, it was to reflect a similar costing curve as if it had built its own local facility. For Brinco; it just could not afford a "deflation" in HQ payments while having to repay the project loan.
And now, wait until Bernard Lahey brings you back (again) his owns characterisation of Brian Mulroney's comment… (He did answer you about a year ago)
That's a good one!!!
More precisions from the court of appeal (I did not search the SCC decision yet):
"Given the factual conclusions of the lower court that the parties knew that future prices were a ‘known unknown’…"
So your comment on "HQ's absolute refusal to agree to an escalation clause" is definitely not true (being diplomatic here)
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Hey Anon 17:16,
Think about it this way :
Brinco / CFLCo was unable to sustain any reduction in price because they needed the money for their debt. As such, it was impossible to adjust the price to anything lower in case of a drop in price like one very possible from the nuclear.
Because Brinco / CFLCo had zero capability to adapt to anything lower, what you ask here is for a one-way ticket in favor of Brinco / CFLCo. Should prices go down, too bad for you HQ and you pay it all. If prices go up, too bad for you HQ, you have to give us back that new extra value.
Do you really thing ANY one would have sign such a deal ?
But should that not be enough, here is another view of the subject.
I challenge you to find me a single document from NL that factors in the value of the plant.
On the first stretch of the Power Contract, HQ obtained about 24 billions in value, while CFLCo obtained about 21, so very close to a 50 – 50 share. The reason is simply that the value of a plant is directly linked to the value of the good it procudes. Any increase in the value of the energy benefits CFLCo by increasing the value of the plant they own. If you would rather not have an asset but money instead, all you have to do is to sell that asset.
So what you are easking here is to have it both : have all the value of the asset + its monetized value. Sorry but it does not work like that. You can not have the asset and its moneytized value at once. HQ obtained the moneytized value while CFLCo obtained the asset.
This is exactly one of the 3 articles I sent in private to UG for him to understand how Qc – HQ is not the devil depicted by NL Premiers since Frank Moore.
I am still waiting for someone to show me 1 item in the UC deal that was unfair – I have said before that the deal was fair with HQ assuming risk.
In UC we didn't buy the lotto ticket (HQ did buy it), and our politicians bought the lotto for MF – UC the lotto won and MF it didn't.
I for one think the UC deal was fair, as was the MF deal. Someone tell me why it wasn't – maybe the deals were dumb, but unfair is a different distinction.
I exchanged emails with Des – he was under the impression that I had made a disparaging remark – I think that is a mistake and I hope Des can explain to me where I went wrong. Let me try again – I simply tried to make the point that I don’t know of many instances where a company willingly renegotiated an agreement that is in his favour. HQ has made many bad deals too and, as far as I know, has never asked to renegotiate. Meanwhile, the situation at MF is similar to UC in the sense that there has been a dramatic change in energy prices. Does that mean that the next step for NL is to attempt to renegotiate the contract with Emera?
something missing here
Anon 13:51 and other comments removed by blog administrator with no trace or trail such as "This comment has been removed by a blog administrator"
What a pile of —- spewing out of Jim Keating (in many ways a mini-me Ed Martin — obfuscation and showing where his loyalties lay — and not with the public interest being first and foremost).
Jim was the "chosen one" or the "heir apparent" that is until Ed got da boot and Stan da man came to the rescue !!!
Didn't know that, but somewhat conforms my comment.
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The NLESD (the school district for all English speaking schools in Newfoundland and Labrador) which falls under the Department of Education was raked over the coals for fraud, hiring, promoting and overpaying unqualified people and the lack of internal controls. I suspect that all crown corporations and agencies have become like this due to rampant crony-ism. If you hire the best comptroller based on a public job competition and base the decision on professional credentials, references and job history – then it is likely that professional would quit before they would turn a blind eye to fraud. On the other hand, if you are marginally qualified and got the job with an extraordinary salary as a personal favour — they you might be disinclined to act on malfeasance. If the job is a favour, then upsetting the staus quo might undo that favour.
Quote from the auditor general's report: "As outlined earlier in the report, there were numerous instances identified during the audit that demonstrated a pervasive pattern of unethical organizational behaviours and disregard of policies and internal controls by a number of employees in the Facilities Branch. Left unchecked, these behaviours significantly increased the opportunity and risk for unauthorized actions and/or fraud."
Is Nalcor just like the NLESD ?
I was not born into the age of technology…but have been using it for the past"20 years or so, doing my banking, trading online stock market, seeing and talking to my grandkids from a far and other socialuseages. So I I am not computer or technology savy, but I get by. But of course those born into the technology age, grew up with it, and they use it like child's play. So notice on this blog there are persons that can post on this blog, and then make their comments disappear without a trace, of course this is in addition to a person removing his or her posting,or the blog adm removing the content of a post, but the shell remains, which is fine…but without a trace… Yup…good technology skills ..what more can I say, not sure if UG has any control over that or not, ask average Joe.
Anger rarely achieves anything worthwhile in life.
It's Thanksgiving in America.
Let's all go in peace. Tomorrow, let's all do a little better.
Merci, Herc. You did give a detailed answer. That’s what I have been looking for when I question and strive for facts. I do not on principle subscribe to anonymous responses that are based on emotional quotient compared to factual and intellectual ones. Ainsi; let us review your response.
1. So, the UC Twin Block (225 MW) is now paid for. It is now CFLCO property but sent to the HQ market. It is not known the price paid to CFLCO. I can guess the price but somebody knows.
2. In 2041, you say CFLCO ownership will be about 75% NL and 25 % HQ. Okay.
3. Surplus UC power for a very few years was sold at a confidential price. Then, more recently, NL stopped that and decided to wheel across through HQ to market. Your estimates are about 3 cents per kWh less about 1.1 cents per kWh for wheeling charge. So, maybe NL made about 1 cent per kWh through CFLCO brokering.
4. At this point in time, you are saying that there are no UC contractual provisions that would not allow HQ from buying any surplus power from CFLCO going forward.
5. As to GWAC, you are saying it was a “charity” in essence by HQ as part of CFLCO. I think what you saying here is that CFLCO’s costs after 25+ years was O&M costs outweighed the rate of return and dividends intended in the original contract. So, bring on the capital spares. I am not so sure that winter availability is a non issue going forward. That may hinge on the water management agreement but the GWAC may favor HQ going forward with MF.
Okay. In 2041, UC has seen monetized value (sales)-about 20/1 in HQ favor-and then asset value to CFLCO (not exclusively NL). Is that your position re the UC contract?
Finally, let me ask you what is the value to NL ratepayers to build the MF to Churchill Falls line now with little to no hope of making any more than 1 to 2 cents per kWh to sell it through CF into the market through HQ. I don’t think there’s a technical reason. Merci beaucoup. Salut. Fred
1 totally wrong. 225MW belongs to Nl hydro along with the 300MW. There is no real distinction in the two anymore. Labrador load peaks over 400MW in winter. The surplus is sold by Nalcor Energy Marketing.
2. I've no idea how that 75% claim can be substantiated.
3. Look up the nalcor energy marketing annual reports for yourself to understand better how this works.
4 and 5 are nebulous and matter in what context? Whatever your objective is, please don't seek factual advice from Heracles31 because you won't get it. He is here to sow seeds of discontent and paint his dear HQ as a blessed saviour – a master of social media fake news.
Hear, hear!! Freddy boy wake up.
Fred @ 01:10:
The reasoning for the new twinned line from MF – CF is to replace the aged line that is there now and for future transmission considerations. In Lab West there is also the Menihek plant and the unfinished line going from UC to Wabush – reasoning is not totally related to Lower Churchill. As your math indicates, no commercial advantage (much like MF – no commercial advantage).
As to Anony @ 08:17:
There is no transmission capacity for the 525Mw, so it does have to be wheeled through HQ as Fred and Hercales31 say.
It looks like I did not expressed myself well enough… Sorry about that.
It is CFLCo's, that is right. But what they do with it and is there an agreement for HQ to buy it back like the one that once existed for the Recall Block, that I do not know.
2-Ownership of CFLCo
Ownership will stay at 34.2 HQ – 65.8% after 2041. But once CFLCo collected 100% of their benefits, they must pay 8% to NL under the lease act. Out of the 92% remaining, there is a second preferred dividend to pay to NL. After that, the rest is divided 34.2 – 65.8 between the two shareholders. But because they share what is left after the 2 dividends are paid, HQ's share does not represent 34.2% of the total benefit. So that how despite their ownership is 34.2%, their share of revenu is closer to 25%.
3 and 4-There is no surplus power at UC to be sold.
What was sold to HQ was the part of the Recall Block that CFLCo did not need for any other purpose. UC can produce 100% of its capacity. Out of that, Twinco and Recall blocks are CFLCo's. Everything else is HQ.
About GWAC being charity.
Should HQ had applied the contract word-by-word, CFLCo would have ended up short in money. By article 12.2, HQ would have be responsible to pay back their obligation but in exchange, would have receive more shares from CFLCo. That way, HQ would have ended up owner of CFLCo, so owner of the plant. Instead of going by the letter of the contract. HQ found ways to sustain CFLCo and ensure they would cover all their own obligation and have their expected benefit. Yes, it was required because O&M increased more than expected, but still by the strict letter of the contract, such a support was not required.
As for the value produced by the contract, you are right. All the value obtained by HQ is cash while CFLCo's share is some cash but mostly a fantastic asset. That was CFLCo's and Brinco's benefits. When comparing both total values, they are similar. In the 1970s, NL chose to buyback Brinco and CFLCo, so to end up with what was their benefit. That was well after the contract was signed and even after the first significant increase in the price of energy. At the beginning NL was not even part of the deal.
About linking MF to UC, I think it is to start stealing power again. In the past, CFLCo did it. Once detected by HQ, HQ put in place a measuring mechanism that allowed them to quickly identify and measure that. So that prevent CFLCo from stealing again. To keep doing it, they need a line that is not monitored by HQ. So this line will do it.
Stealing from HQ at the UC plant is one of the 2 theories developed by Nalcor and in the court of appeal as of now. The case should be heard next month. CFLCo already lost in the superior court. The evidence and admission about stealing was in that judgement, referred to by the parties as the Block Theory case.
Nice to talk with you,
One more time guys, only the surplus of the 525MW is wheeled through HQ. The 300-400MW used in Labrador is not wheeled thru HQ. The price paid by NL Hydro is 0.2 c/kwh – mo mystery here. Keep in mind, the surplus power wheeled thru HQ will soon stop when the LIL is commissioned.
The LTA was built for various reasons including future Labrador mining demand but the #1 reason to transfer power between Muskrat and CFLco as part of Nalcor's Water Management Agreement workaround. This aspect has been challenged by HQ and threatens Muskrat reliability severely.
Again Fred, watch out who you get info from. A cost benefit analysis from Herc is as good as one from Danny W.
Anony @ 11:25:
You are off base – LIT and LTA are not related to future mining demand, or only minimally so. For bigger mining demand new transmission aside from LIL/LTA is necessary.
Bernard, I wonder why your father left Nfld "disgusted" and never returned, and you also have never visited? Is the bad culture traits of Nflders ( there are also many good traits)that I suggested, that can lead to a MFs fiasco, a factor that causes many citizens to leave?
I suspect many of the best of Nflders leave and not come back, and this always leaves our province worse off.
I commend you for your most civil attitude and style and informed comments on this blog. Much like Dave Vardy,I suggest.
Thx PF, I have always felt an attachment to NL and I really want to visit. Just havent gotten around to it. Maybe this summer. Thx for your kind remarks.
July, Aug and sept usually gives almost ideal weather. Other times not so good unless you like fog, and dampness. June we call capelin weather, cool and damp, but now capelin roll in July , a month or more later than usual. If you inform UG readers you are coming, I expect some will like to meet you. Cheers.
The General Inquiry continues to be "relevant", as it touches on many aspects of NL life experience, now and the future; A glimpse into how well the management of the offshore windfall suggests that mistakes are still being made, opportunities missed, even denied, cash flow dividends miss-placed and miss- spent, etc. Now that the overall benefits of the actions of the erudite few, (Ron, David, Des, Steve, Cabot, Land Protectors and others), NL citizenry should be aware of the need for real management of change.
My above thoughts are based on the realization that since the 1980's, the advent of the offshore windfall, Energy Policy, (NALCOR Energy Plan), what heavily biased towards false forecasting of foreign markets for selling surplus hydro power and offshore oil products. This has led to a fumbling miss-use of our non-renewable + renewable resources. An unmitigated failure by management.
Did I say "Management Failure"?
The vacuous blather from this incompetent little Nalcor shit Harrington trying to deflect blame for his monumental fnck-up is enough to make one want to puke…
Watched the inquiry again last week, and I guess the inquiry has to deal with all the aspects of nalcor and govt. capers. But as far as solving or what should have been done to give the little bit of power we need, well listening was just a waste of time. It makes no more scenes to develop or use a gas field 200 miles offshore than it does to develop a hydro project 1100 Kim's away. It simply does not make economic scenes, and it's too bad that nalcor and company couldn't get that through thick sculls, from the start. Should that not be the job of nalcor, and the pub to figure out how much power we need and when, and then fulfill that need. And we all know that the simplest and least cost was small hydro as needed, wind farms and maybe a couple of ct turbines to meet the brief winter peak demand, and of course CDM. Our power required demand has not increased in the last 10 years and is unlikely to increase in the next 30. Now if husky or others had decided to develop a gas field for commercial purposes, then maybe we could have tapped into that, depending on the methods used, pipelines, LNG tankers, etc. to give us the little bit of energy we needed at a reasonable rate. But to go 1100 km or 600 miles ( least ice route) was and always will be a recipe for bankruptcy, and any iodit knows that. And maybe the advanced educated, and experienced engineers, etc. Could just provide reasonable figures to confirm the obvious. Reminds me of Stan's comment about building a hydro line to the moon, yes, you could probably do it, but at what cost and for what purpose. Still hope the inquiry in the two final stages, zeros in on the island isolated cost and methods, and discards Nalcor's produced rubbish and gives us what was needed and a realistic cost, and CDM requirements. E. G. How much would have it cost to give everyone a free heat pump, lol… 10$ billion, 20$ billion, well 200, 000 households @4,000$ each, less than 1 billion isn't it. And if most bought and installed their own,,then to give rebates and discounts to the less fortunate of the province, then maybe 500 million, mere peanuts compared to 12 billion and 50 years to pay for it says Joe blow, average Joe, AJ.
No, no… the fix was in on this MRF con-job from the beginning… DW's ego wanted its legacy project, and the enablers were only too glad to oblige because it would also afford them the means to personally profiteer handsomely from NL's oil royalties. The colossal naivete of that simple rube Kathy Dunderdale ensured the con would be sanctioned; all they had to do was present her with a few glossy powerpoint decks filled with steaming pies of "world-class" Nalcor bullshit.
This Muskrat Falls con-job bears all the hallmarks of a massive bait-and-switch scheme perpetrated on an unsuspecting and gullible people.
Those responsible for this vile scam should be bloody-well locked up.
Just look at the hundred$ upon hundred$ of thousand$ in additional salaries the likes of Harrington and his Nalcor ilk are raking in because the MRF debacle is now billion$$ over budget and years behind schedule.
These individual are still being generously remunerated, and with cost-of-living indexing built in.
They actually wound up making more money by delivering an over-budget/behind-schedule boondoggle, than they would have made had the project been delivered on time and on budget.
That's just bloody-well ridiculous.
This entire MRF fiasco is just a massive cash cow for those scheming bastards, funded entirely by NL ratepayers and taxpayers. Those bloody schemers won't need to worry about their heating bills because they'll be wintering in their Florida condos and villas, compliments of NL ratepayers and taxpayers.
The findings of this inquiry so far raises legitimate questions as to whether there was deliberate deception of the public involved on the road to sanction. This alone may be grounds for initiating a criminal investigation into the actions of the responsible parties.
All the enablers, they pose for the online stories by the Telegram and CBC cameras, with their best smile, as if they just won the loto. Not a hint of remorse or shame for their betrayal for what they have done, the unimaginable financial burden on our citizens.
And yet, only about 800 Nflders follow this Inquiry online. If memory servers, about 600 followed the PUB hearings in 2012. And hardly anyone of the public attends the hearings, except 3 or 4 regulars.
Next week we get a star witness, whose name keeps popping up:engineer Gilbert Bennett. The guy who knows where all the bodies are buried. He got a smaller role when Stan took charge, and was silenced as to public statements. He informed us that there was more rock qarried for Muskrat than used for the great pyramid of Egypt. Dave Vardy suggested the economics of Muskrat was like a Ponzie scheme. We know of Gil as The Cable Guy.
Well gillies is on this week, the bugged. And know Learmonth or Kate will do a good job, but most of the others will give a past. Now a couple will try and get at the rock bottom and his part… But suspect it will end up with nothing to do about nothing. And gillies will come out unscarred, and how dear you question my motives and I am a loyal NL and had only did what was best for the people of the province, says Joe blow .
Would just like to give CBC journalist Terry Roberts and Telegram reporter Ashley Fitzpatrick a nod of appreciation for their diligent coverage of the inquiry into the MRF debacle.
Thank you both.
Almost forgot, Michael Connors of NTV too, many thanks.
Will Kate, Learmonth or others do a good job questioning Gilbert Bennett?
Gil is the Cable Guy: an electrical engineer, and indeed smart and intelligent,but with no prior experience in power systems,(as far as I know) whether as to thermal , hydro, gas turbines, wind or DMS ( Demand Side Management) using CDM (Conservation and Energy Efficiency for customers to reduce power demand), nor for forecasting, whether by Econometrics model or End -Use model. Nor for power transmission, wheter AC or DC, and integrations, and reliability, voltage and frequency stability or risk to flask overs on the GNP terrain. He had no knowledge of the benefit of residential heat pump systems that operate extremely well in our climate WITHOUT the need of backup electric baseboard of duct heater. He ignored information presented to the PUB on this topic, and which economist Feehan has recently stated will drastically cut demand for power and reduce revenue if rates go up. Gil seemed to ignore elasticity effect for electricity. MHI warnings as to the End Use modeling as best methods was ignored, all under Bennnet's watch. He went along with the idea that our housing stoch was reaching the saturation point for energy improvements, another false assumption.
Kate is an electrical engineer. Not only that , but with experience in power systems, not the cable business.
Kate , if she wants, may put Bennett through a guelling examination and show her stuff. If Kate had sought to find our least cost power options instead of Gil, we may have saved over 10 billion.
The other lawyers can fine tune their questioning. I trust that Bennett does not baffle these lawyers with bullshit. He has much to answer for.
Don't underestimate Kate. She has great capacity to probe the mysteries of the past, and with a curious mind can peel back the obfuscation of obsolete engineering and EPC. Needless to say I am impressed with how much she has "grown" through the Inquiry process. She is certainly among the bright hopes for the NL future. She would make a very positive contribution, were she to lead a progressive government sometime soon.
You Two are much too hopeful. You forget the TOR ensure no justice will be the result of this inquiry.
Gil will BS his way through questioning comfortable in the knowledge that there are no repercussions at the end.
Kate will not swoop in and be a saviour. Is she not a scion of the privileged elite? How likely is she to betray her class?
Etienne says as to Heracles and PF comments on culture is just the sort of thing we wanted to see comments on, he says it is important that the root cause of the MFs fiasco be identified,but then says he sees little evidence of more corruption in politics in Nfld then other jurisdictions, and cites only the circumstances of our Commission of Govn in 1934,and says historically nfld had little appetite for spending on foolish things.
The Nfld railway, in the 1880s, always a money looser, caused about 1/2 our debt by the 1930s. Built by the Reids, who had a monopoly on shipping also, and vast grants of land along the rail lines. His lawyer, Morine, an MHA and Minister in govn was on the payroll of Reid.
Our greatest PM, Robert Bond finally quit fed up with corruption. He left his estate property in Whitbourne to the govenment, who let it go to ruin. He uses his own assest to secure a bank load to save our govn in the 1890 during a bank crash. Integrity of character here is little valued.
The Nfld regiment in WW1, cost about 1/2 our total debt by the 1930s. We could not afford to have volunteered to pay for that cost. Lives of our young men was not enough.The British Empire wanted our blood and money.
Richard Squires our PM, investigated by the Walker Inquiry,in the 1920s,found guilty of stealing from the liquor commission, and also from Vet pension funds. No jail time. Later re-elected as PM. Chased by a hungry mob in the 1930s as they attacked the government house. He barely escaped and was hidden.
15 year break form politics and corruption 1934-1949, the war and the Yanks having restored our economy.
Joey: Come by Chance Refinery: the biggest bankruptcy in Canadian history. 10s of million of public money spent and wasted. Shaneen the promoter. THe ship the Queen Mary bought in for opening gala. Joey planned a chemical complex as well that never happened and planned to import orange juice by tanker. The refinery sold for 1 dollar.
Stephenville paper/linerbard mill,1970s, Joeys idea. Clyde Wells and John Crosbie broke ranks with Joey over his crazy ideas pumping in 10s of million of public money.
Joey pals with Al Vardy, John C Doyle and other crooks, and schemes.
Frank Moores; from Premier to federal lobbyist. Involved in the Airbus scandal, so it seemed.
Peckford: The Pickle Palace Premier…..small potatoes of 20 million waste.
Now the Series of Premiers from Danny to Ball that tops them all: the Muskrat Fiasco needing a 33 million Inquiry to find the cause of 12.7 billion waste: yes BILLIONS.
Culture anyone? Do we have a problem?
PF: Thank you thank you thank you, some actual facts to work with! Yay! (Sherlock Holmes quote: "Data! Data! Data! I cannot make bricks without clay")
Let's take the first one you offer us: "The Nfld railway, in the 1880s, always a money looser, caused about 1/2 our debt by the 1930s"
This reminds me of the history of Prince Edward Island, which was driven to become part of Canada in 1873 by crippling debts caused by…why, yes, you guessed it, spending on a railway system. So: Was Newfoundland uniquely corrupt or poorly managed at the time? On the basis of this example, I am forced to say no.
As for Robert Bond, well, I am sorry, you are contradicting yourself: you cannot say that "Integrity of character here is little valued" when talking about a man whom Newfoundlanders elected as Premier.
As for the Newfoundland regiment in WW1: ALL the Dominions sent manpower to Mother Britain, and Newfoundland suffered less than others: some 1200-1500 Newfoundlanders died in combat during WWI, versus (for example) some 18 000 New Zealanders. Now, New Zealand had almost five times the population of Newfoundland at the time. So: Was Newfoundland uniquely fanatical at the time? On the basis of this example, I am forced to say no.
Let us move on to Robert Squires. A colorful story! Why, almost as colorful as (for example) the scandal which caused Alexander Cameron Rutherford in Alberta to resign a decade or so earlier. So: Was Newfoundland uniquely corrupt or poorly managed at the time? On the basis of this example, I am forced to say no.
Now, here's the thing: AFTER Newfoundland joins Confederation, various boondoggles and instances of waste of public money do appear to grow increasingly more pronounced (Come by Chance is a good example), and indeed Muskrat Falls could be seen as the culmination of a trend. But if Newfoundland indeed has some kind of unusually corrupt local culture, why is there no example of this corruption being any worse than in similar societies BEFORE Newfoundland joined Canada? Since Newfoundland has seen its cultural distinctiveness erode over the past few generations, I would have expected the pattern to be the reverse, i.e. that late nineteenth/early twentieth century Newfoundland would be more tangibly corrupt than its neighbors, and growing ever-more comparable to its neighbors the closer we get to the present. As we have seen, this does not appear to be the case.
Etienne, you get excited about the history of corruption here, and then dismiss most of it.
The railway: we had about 1300 rural villages scattered thousands of miles of coastline, poorly served for medical, or all needs. Labrador almost totally isolated and still largely so (still no coastal highway or power grid and food shortages and prices 3 times on the island.) In 1892 Wilfred Grenfell arrived and spent his life in bringing medical services to northern Nfld and Labrador, much from the good charitable donations and volunteers by doctors from the USA, up to the the early 1940s. He was not welcomed by the elite of St Johns, nor by churches who wanted to keep denominational education system going (which was not abandoned until about 1995, so another century)
The ocean was the connections between these hundreds of fishing villages. The railway, inland, did little to improve that. Politicians kept building branch lines that served no purpose into the early 1930s, as we were heading for bankruptcy. Then the steel track was taken up and sold to Japan as scrap, who like Germany were gearing up for war, and needed steel.
UG calls for good governance. Much of North America sill have profitable rail systems, And we built the narrow gauge rail, already obselete when built, that was our Newfie Bullet! One of the terms of Confederation was to keep it going, and eventually a trade off of about 800 million to upgrade the TCH across the island. You say the Nfld Bullet was good governance, and the branch lines to nowhere? Crony politics I suggest.
I can expand on the other points if you like?
Err, no, PF, I was not dismissing any of it. Nor was I saying that any of the examples you gave were instances of good governance. What I was saying is that, as instances of corruption and incompetence, the examples you gave could be matched by various other Canadian provinces or Dominions at the time, as I tried to show.
The 4 th paragraph of this PlanetNL piece uses the word "end-users",meaning mostly the residential users of electricity. Electricity is generated, whether at Holyrood or Muskrat Falls, the voltage stepped up, transmitted short or long distances, the voltage stepped down by the transformer on the pole on your street, then fed to your house, so you are at the end of the line, hence : you are an END-USER.
Your end uses are many: electric heat, hot water, fridges, lights, TVs, computers, toasters, kettles etc: all of these are END-USES.
So, if you want to forecast electricity and you use END-USE forecasting methods, it is duck soup, right? The power companies get to know what you are doing with your electricity that your meter is recording day after day. It is producing a monthly total of your END-USES. Nothing complicated,is it?
Manitoba Hydro told Nalcor it was a best method for forecasting. I would suggest that a combined End -Use and Econometric is the most accurate. But Nalcor, Nfld Hydro and Nfld Power refused to use END- USE analysis! Not even for forecasting for island needs for Muskrat Falls.
Grant Thompson did't much understand End -Use Models. Nor did Stratton, nor Kate in explaining it to Judge Leblanc. It was like a black hole, Leblanc thought the forecasting methods was made simple and understood, when there was not only no deep dive, but not a dive at all. It was skimmed over, perhaps intentionally?
If you have electric heaters in your garage, but never turn them on, do they burn electricity? Do you ASSUME they do? Based on what evidence? If you install a 300 % efficient minisplit, but don't use it, or seldon use it, does it reduce your heat energy by 2/3? Do you you ASSUME it does? Based on what evidence? Does it work well at -15C cold snaps? Where is the evidence?
This is the benefit of END-USE forecasting methods. Your get evidence. It is evidence based, not just guess work. It leads to more accurate forecasting. So why is this best practice ignored here? Why has this Inquiry ignored this issue?
End -Use methods started in France in the early 1970s . By the mid 1980s many in North America saw the benefit and were adopting it for forecasting. In 2012 here it was ignored despite MHI recommendation. In 2018 we still ignore it. Now we see Feehan warning that our demand may plummet. Why did we not foresee it, from the application of elesticity and END-USE models? Perhaps Gilbert Bennett will explain to Kate or someone why this "duck soup" method of End-USE for forecasting was ignored? Too expensive to do? To complicated? That is crap.