WERE SNC LAVALIN TROUBLES OPPORTUNISTIC FOR NALCOR?

Guest Post by David Vardy

SNC LAVALIN: THE MUSKRAT FALLS EXPERIENCE
SNC Lavalin’s role in the Muskrat Falls project has figured
prominently in recent hearings of the Muskrat Falls Inquiry. On Friday the
Inquiry heard from Nalcor’s senior procurement officer on the project’s
management practices, including those which led to the selection of SNC Lavalin (SLI) as EPCM contractor in 2011 and to their removal from this role in 2013.


The New York Times had this to say on the biggest scandal
facing Prime Minister Justin Trudeau:

“The case revolves around accusations that SNC-Lavalin, a
multinational engineering company based in Quebec, paid 47.7 million Canadian
dollars in bribes to officials in Libya to win contracts there, and defrauded
the Libyan government and its agencies of 129.8 million Canadian dollars.

“The prime minister and his aides have been accused of
pressuring his justice minister at the time, Jody Wilson-Raybould, to drop the
criminal inquiry against the company because a conviction could potentially
cost thousands of jobs in Canada, and diminish his Liberal Party’s political
fortunes.”

While SNC Lavalin’s (SLI) quest for absolution has landed
Justin Trudeau and his Liberal government in hot water it is timely to ask how
the company has conducted itself in our province. SLI had been selected as the
main project manager responsible for Engineering, Procurement, Construction and
Management (EPCM) on the Muskrat Falls project. The contract was awarded by
Nalcor in February of 2011 through a competitive selection process.

EPCM contract awarded to SLI
Grant Thornton, the forensic auditor for the Muskrat Falls
Inquiry (MFI) describes how SLI were awarded the contract based on their
knowledge of hydroelectric development and their “world-class engineering,
procurement and construction management experience”. In March of 2013 Nalcor
rescinded this decision and moved toward an “integrated management team,”
reducing the role of SNC Lavalin to engineering design, with Nalcor taking on
the responsibility for management, construction and procurement.

The December 2018 project report from Nalcor reveals that 43
million person hours have been expended to date. The DG2 estimate of 2010 was
15 million person hours and this was increased at the time of sanction in the
DG3 estimate of 2012 estimate to 20 million person hours. It is clear that when
the project is finished the number of person years will be more than three
times the DG2 estimate. Nalcor’s “basis of estimate” document reveals that 2.7
million person hours had been projected for EPCM services at DG3.

In their phase two forensic audit for the Muskrat Falls
Inquiry Grant Thornton describe the problems which Nalcor experienced with SNC
Lavalin.

“Nalcor has indicated that they experienced performance issues
with SNC shortly after the contract was awarded, including turnover of key project
resources, the failure to complete key project deliverables, lack of adequate
systems and tools, and significant organization and alignment gaps.”

Nalcor cited lack of resources as well as high turnover.
Nalcor was concerned with the high level of turnover of SLI staff who were told
they had to work out of St. John’s to comply with local benefits policy put in
place by the province.  Many were not happy
to leave Montreal to work in Newfoundland and Labrador. Some did not have the
relevant experience. Their computer systems were not compatible with those of
Nalcor. SLI claim that some of the people they wanted to hire were not
acceptable to Nalcor.

GT report that “SNC failed to complete a significant number of
Decision Gate 3 Deliverables by the contractual date (December 12 2011).”
Nalcor had prepared a report on what was needed to get the project back on
track, with key deliverables needed to maintain the schedule. There were
problems with the lack of collaboration between Nalcor and SLI. Nalcor hired
Deloitte to undertake team training to improve the effectiveness of the
relationship. At the end of the day this did not succeed and Nalcor decided to reduce
the role of SLI, thereby replacing the EPCM model with an “integrated project
management” approach.

In his testimony before the Inquiry on March 1, 2019, Pat
Hussey, Supply Chain Manager with Nalcor, described the selection process which
led up to the engagement of SLI as EPCM contractor. Toward the end of the
process Hussey said it was a choice between Hatch and SLI. In their evaluation
Nalcor officials compared their bids and were surprised with how SLI fees were
lower than those submitted by Hatch. Hussey said it looked as if SLI were
“buying the job” by bidding too low, because their fees, based on the hourly
rate times the estimated person hours, were coming in well below Hatch. SLI put
in a low hourly markup rate as well as a low estimate of person hours..

Grant Thornton’s forensic audit reports that the EPCM and
Owner’s Cost were $712 million at DG3 and this rose by March 2018 to $1,118
million.

At the end of the day the contract was awarded to SLI, who had
estimated 2.5 million person hours. Because the contract was “reimbursable”
they were able to increase the number of person hours from 2.5 million to 5.5
million after the contract was awarded. It is not clear as to whether this
increase was a contributing factor in the decision to jettison SLI.

“Cost plus” vs Reimbursable Cost
Many will remember the construction scandals of the Smallwood
era, before public tendering became a legal requirement. Contractors who were
highly esteemed by Smallwood and his colleagues were awarded “cost plus” contracts
which enabled these contractors to give generous financial support to the
governing party. Is not a “reimbursable” contract tantamount to “cost plus”? If
SLI was able to submit a bid which could subsequently be altered by increasing
the number of person hours then one has to question the whole process for
awarding contracts. In the case of SLI their contract with Nalcor was
subsequently changed and their role was diminished. We look forward to learning
how many person hours were charged by SLI and how the resources allocated for
EPCM and Owner’s cost were affected.

Cost Overruns for three major projects
The testimony of Pat Hussey is very revealing. It raises a
number of questions about the flexibility of contractors to change the terms of
their contract through “change orders” which significantly transform the scope
of work. The forensic audit by GT describes major changes made in the three of
the major projects, namely Astaldi (power house and spillway), Valard
(transmission lines on Island and in Labrador) and the EPCM contract (initially
awarded to SLI). These three projects account for 45% of the $10,117 million
direct project cost in the latest direct cost estimate. The overruns on these
three projects account for 61% of all overruns.

Astaldi contract for power house and spillway
The Astaldi contract went from $752 million to $1959 million
(March 2018) and Astaldi has now been replaced.

In their report of April 8, 2016 EY commented on the
“reimbursement” of labour costs in the Astaldi contract

The contract structure was designed to realize possible
savings in construction labour productivity and also to protect Nalcor from any
labour cost overruns that might be experienced by the contractor. It was
intended that this would be achieved by including in the contract a maximum
value for labour that Nalcor would have to pay to the contractor. However, the
payment mechanism is based on person-hours expended rather than m3 of concrete
poured. This mechanism did not capture the potential for poor contract management
of labour and the consequent decoupling of labour paid for from work completed
(measured by m3 of concrete poured). As at December 2015, the proportion of
contract value paid to the contractor is significantly greater than the
proportion of the concrete that has been placed.”

Did Astaldi also “buy the job” by submitting a low bid and use
it to secure the contract, knowing they could renegotiate it later.

Valard contract for Labrador Island Link
Grant Thornton report that the contract with Valard went from
$735 million to $1523 million. The contract was sole sourced to Valard.

Why was Valard awarded the contract for the entire Labrador
Island Link (LIL) when that same company was busily engaged in building the
line from Churchill Falls to Muskrat Falls, a contract which they won in a
competition among eight bidders? Nalcor’s original plan was to break the LIL
into four smaller contracts but that plan was thrown out and Valard was given
the entire LIL, without public tendering or a new call for proposals! How does
this comport with best practice in project management?

Nalcor’s performance
Grant Thornton has taken a “gentle” approach in their
evaluation of Nalcor’s performance. One has to question whether this treatment
is justified by the facts, particularly when it comes to “reimbursement” of
costs, which opens the door to the sins of “cost plus”. GT is more critical
when it comes to Astaldi. Apart from their handling of Astaldi GT is less
critical. GT uncritically describes Nalcor’s role in cost overruns on page 70
of their phase 2 forensic audit when they say that

“their conduct in retaining and subsequently dealing with  contractors did not contribute to project
cost increases and project delays?”
 

Is this judgement of Nalcor’s behaviour justified when they
allowed major EPCM cost escalation through reimbursement? In dealing with a
company whose international dealings have placed its survival in jeopardy did
Nalcor exercise the kind of oversight and cost control needed? Why was Valard
exempted from competitive bidding and yet allowed significant cost overruns
through change orders? Why was Astaldi’s bid accepted and subsequently
renegotiated to a value above the higher bidders?

GT gives Nalcor a clean bill of health except for their
management of Astaldi. Pat Hussey lays the blame at the door of SLI. What is
clear is that there is much more to hear before anybody rushes to judgement.
Was SLI treated too harshly by Nalcor or did they exploit Nalcor’s weaknesses
when they took us back to the “cost plus” practices of a bygone era? Has the
state of public administration and public probity advanced beyond that same
bygone era of our history?

Early cost overruns did not prompt reassessment
GT does take strong issue with the fact that prior to
financial close bids were exceeding DG3 estimates by 25% and yet these warning
signs were ignored.

“bids were received from contractors whom  ultimately were hired which collectively
exceeded the DG3 budget by approximately $600 
million, a twenty five percent (25%) overage. The amount of this overage
exceeded the DG3 tactical contingency amount ($368 million) by over $230
million. Hence, prior to financial close, Nalcor should have been aware that
the contingency amount included in DG3 budget was insufficient. Furthermore,
Nalcor should have known that by April 2013 when the CH0007 bids were received
(four months after sanctioning) that the DG3 contingency amount was exhausted.”

GT point out that these large overruns should have triggered a
reassessment of the wisdom of continuing before the province took on the risks
of a completion guarantee which would compel it to complete the project
regardless of final cost.

       Prior to
financial close, Nalcor should have been aware that the contingency included in
the DG3 budget was insufficient.

       At the time of financial close, the project
schedule was delayed by six months, demonstrating that the 97% chance of
schedule slippage determined at sanctioning was in fact materializing. 

      Nalcor had the
ability to stop the project prior to execution of the FLG and financial close
without funding the remaining costs to complete. 

      Once the FLG was
executed, Nalcor/GNL were committed to funding the project at their costs
regardless of if the project was stopped or not. Under the FLG, Canada had the
right to complete the project with Nalcor/GNL funding it. 

      Nalcor should
have been aware that the contingency they selected for the LCP (less than 7%)
was less than the low end of the range of what the IE typically sees at
comparable DG3 stage gates.

There is no evidence that these overruns prompted Nalcor to
reassess the project! Nor is there evidence that Nalcor advised the province of
the large overruns or that the province reached out to Nalcor to determine if
overruns were taking place. This reflects an egregious failing of oversight!

Why not finalize all major bids before financial close?
All of this begs the question as to why Nalcor and government
did not insist that all major components be invited, assessed and finalized
prior to sanction and released only after financial close. This question was
raised by Muskrat Falls Concerned Citizens’ Coalition (MFCCC) counsel Geoff
Budden during cross-examination of Pat Hussey. Budden referred to an exhibit
P-02095 which refers on slide 33 to development of “contract strategies &
contract plans with schedule to accommodate financial close requirements
(Financial Close may require most contracts to be complete by project
sanction).” 



This suggests that as early as 2008 Nalcor had in mind the concept
of using the outcome of a real bidding process to raise the confidence level of
the cost estimates. Indeed it is worthy of note that the “Limited Notice to
Proceed” (LNP) issued to Astaldi took place on the date of Financial Close,
namely November 29, 2013. Clearly the strategy of having contracts in place and
ready to go at the time of sanction or financial close was not an alien
concept. Sadly it did not prevent the unfortunate saga which led to the removal
of Astaldi from the site in the fall of 2018 and which included various
amendments and change orders from the contract/LNP of November 29, 2013.

Conclusion
Nalcor was exempted from having to comply with the legislated
rules which bind all other Crown agencies and departments. Government’s public
tendering policies are far from perfect but they do impose a measure of
disciple and certainty. Will the Commissioner pass judgement on the wisdom of
giving a provincial crown corporation this kind of extraordinary discretion to
dispense with public tendering. Were the sweeping powers and extraordinary
authority conferred by statute upon Nalcor Energy appropriate? Were appropriate
oversight measures put in place to protect the public interest for this
enormous project?

David Vardy

THE PROOF MUSKRAT FALLS IS NOVA SCOTIA’S PROJECT

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

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

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

GROUP SEEKS PUBLIC SUPPORT FOR CABOT MARTIN RESEARCH AWARD

Cabot Martin’s sudden passing, in September, has stirred his friends, colleagues, and others familiar with his work, to honor him and encourage continued work in applied research and public policy development.

64 COMMENTS

  1. Bruno Marcocchio7 March 2019 at 08:53

    The fix was in Dave! Ed Martin got his marching orders from the executive committee (and the keys to the treasury). The rest followed naturally.

    Could the hiring of SNC Lavalin (that you confusingly call SLI), Astaldi, and Valard in one large contract for the ML be for their similar business practices of spraying money in every direction that needed greasing?

    Does Ocam's Razor not suggest that corruption is the simplest explanation for Nalcor's, SNC's, Astaldi's and Valard's behavior? Why has this elegant explanation for all the curious facts at MF not occurred to you?

    • Another excellent, indepth, detailed, logical summation by Mr. Vardy, or as summarized by Bruno that corruption is the simplest explanation of all behaviour by all the parties including the FLG by Harper. The 3 major companies, SNC, Valard, and Astaldi all got their contracts by bidding low, or as in the term bought the contracts, and knowing they would double them after being awarded the contracts. Knowing it is usually easier to stay with the contractor than changing horses midway. SNL knew they were too low in man hours, and when nalcor changed the contract from EPCM to an integrated one, they reverted to the oldest trick of cost plus. Valard estimated cost doubled, and was awarded the total LIL without public tendering and allowed Emera to get its teeth firmly planted for its revenues over the next 50 years. And long after Astaldi's contract doubled, nalcor eventually got rid of them. Nalcor knew by sanction that the project would well exceed their contingency, but Eddie considered his contingency was really the 2.4 $ billion, the so called difference between, the island isolated option and muskrat. So he was willing to sink at least the 2.4 billion. The kind of thinking that got us in the mess, …it was not the least cost option, and we did not need the power. Then the fatal die was cast by Harper in revenge, for ABC and his assessment of easterners as having a defeatest attitude. All doing their damness to deceive, contrive and to do their corruptive behaviour. What tangled webs we weave, when we weave to deceive. That is the legacy of muskrat. How were the people to know that, and know we would be paying it off over the next 70 years, for a project we didn't need. Cheers, Joe blow.

    • That we DID NOT need the power was and is a key aspect AJ — no doubt, and it flows from that that MF was not the lowest cost.

      Having said that, I find (so far at least) that the inquiry has not delved deeply into that aspect — that we did not need the power and that the escalating supply price assumption and CPW process was contrived to give a perceived legitimacy to Nalcor's contrived "least-cost" MF option and hence the illusion that there existed a $2.4 billion MF advantage.

      That was all part of a contrived scheme/mechanism to pull the wool over the eyes of the uninformed (and to provide fake propaganda for the premier, cabinet, MHAs — and senior public servants).

      There was nothing accidental about all this.

      It was a well orchestrated scheme (and as far as I can see, the Inquiry is intentionally or otherwise just passing it by).

    • If everyone agrees with that, then it should be shouted from the rooftops until he is brought back before the inquiry…but what then. In the best democracy of the world, nothing can be done with Trumpie, I think they have recorded up to 9,000 lies since becoming president, frow from the NY times and others. He will be voted out of office, unless the American are blinder than us. And I think down the road he will be like Manaford, cooling his heels in jail. But no court will find the emperor guilty, or guilty of what, guilty of signing a term paper to start a maga project, ask Joe blow. If you disagree, explain.

  2. Considering Astaldis current financial situation, they certainly had the motive to under-bid knowing they could just pump up the numbers afterwards. Companies of this size usually see financial troubles well ahead of time, so they could have seen the writing on the wall around the time of bidding, and seen an opportunity to make some easy money to avoid filing for creditor protection at that time.

  3. What a surprise yesterday: NTV mentioned the fretting of Nflders over heating bills about to skyrocket with MFs effect unknown, so things like heat pumps insulation etc can help. They show the minisplits, and then mention the new government assistance program . But not for electric heat users, but for those burning oil. Fuel switching is the purpose, to get these unto the power grid for electric heat: efficient HP heat I assumed, consistent with Synapse ideas of moderating our grid peak load.
    But the NTV piece went on to talk about insulation and programmable thermostats, and rebates would be handled by Take charge. I wondered if the minisplit rebates would be for Cold Climate models,the only good ones.
    The announcement involved provincial and federal members, all for the photo op. The start of the Nfld New Green Plan , I wondered? Where could I find more particulars?
    VOCM covered it, online, "to subsidize people who heat their homes with oil by helping them install new control devices" ….and "close to 2 million by the fed and prov govn for rebates for insulation and programable thermostats to help them lower greenhouse gas emissions" Not a word about minisplit rebates. Richard Duggan of VOCM had TWEETS: 1.4 million by prov govn and 500,000 by the feds. A link shows the Energy Efficiency in Oil Heated Homes Program, under the Low carbon Economy Leadership Fund (LCELF) indeed says rebates only for insulation and thermostats, for those now using fuel oil for space heating. Rebates for insulation could reach 2000 dollars and for the thermostat 10 dollars. It say a 2.05 million total over 4 years, with 1.54 million form the provincial , and 0.51 million from the feds. a LITTLE ARITHMETIC shows Oer 4 years means about 1/2 million per year. As Take Charge takes about 1/3 for overhead and expenses, that leaves about 330,000 per year. If about 2000 rebate per house, it gives about 165 houses to qualify. If we have 50,000 of about 200,000 now burning oil, then this would cover 0.0033 of the houses per year, taking 300 years for the full conversions. A Made In Nfld New Green Deal indeed!
    They say small events are disclosed on Fridays.
    Friday started with VOCM"s Richard Duggan : "I'm down at Beach Cove Elementary School as CCNL is set to unveil its now book in its climate change club series". Then "Minister Graham Letto is here to read the new book to the kids" . This is followed by another tweet: "its announced that all of the kids will be getting a copy of the book, huge gasp of excitement". There is photos of kids sitting cross legged, on the floor, and huge posters on either side of Letto at the front :"The way Forward, and Exciting News for homes with Oil Heat". 3 hours later Duggan is now at the Geo Centre for an announcement of a new low carbon economy leadership fund. One hour later Duggan tweets that Letto announces the rebate program for homes with oil, and under Take Charge.
    We can see that VOCM Duggan has 208 people as followers , and 149 following. He get 23 likes. Duggan, I think, takes part in the NTV clip in the evening, excited about the 10 dollar thermostat rebate.
    I finally figure out, there is no rebates for HPs, not even the poor quality ones promoted by Take Charge.
    A nothing Burger event, but well covered by VOCM and NTV.
    Did CBC cover it too? Even our Fed rep Whalen was there on TV for this HUGE climate change initiative. Yet Letto says the MFs mitigation roll out is yet to come. Image what we are yet to see!
    They say strange signs will be seen in the latter days, and maybe I should listen more to the Jehovah Witness ladies that come to my door. I'll keep my eyes peeled for more from Minister Letto, and his Way Forward.
    Winston Adams

    • Recall that at present, when very cold, programmable thermostats, and baseboard electric heat, is the main factor for our needing to ramp up our power generation, up by 400 MW in the morning, with Holyrood thermal generation going all out and lots of GHG emissions, and this year at times importing 170 Mw of dirty coal fired power from NS.
      Now we add to this peak load with this program. Holyrood is about 12 % of our yearly generation, but about 25 % in winter, and some days even more. Synapse proposes minisplit HP efficiency with oil switching,and also suggests it for baseboard switching, which makes sense, to reduce the peak load, and permit other electrification.
      Nfld Power was not part of this Nothing Burger yesterday, and as it seems in contrast with Peter Alteen Rotary Club talk about efficient heating. Is Nlfd Power lying low on this political trick yesterday?
      Yet Nfld Hydro guy falsely talked about their success at Conservation, which must have been approved by the new CEO Jennifer Williams? , and Nalcor CEO Stan Marshall.
      To get 2000 rebate most oil burning houses would have to upgrade to a 200 amp panel , say 4000 dollars , and their part of insulating costs, so at least 5000 to spend to get 2000. And for what, reduced energy use but at what power rates?
      And Harvey oil says oil energy is 30 per cheaper than electricity when electricity was 10 cent rates.
      So, the plan was a hit with 8 year old kids it seems, and for our media, who suck in ad revenue from Take Charge, skimmed from our power bills. Doubt they will be swamped with oil burners wanting to switch. Makes more sense, economically to switch from baseboard heat to oil or wood, or HP.
      And too, Holyrood operates at about 35 % efficiency, while home furnaces maybe at 80% efficiency, and can run with a small generator in a power failure. At present no saving on GHGs, unless MFs is operating and reliable ….that remains to be seen.
      Who selects the MFs mitigation options and alternatives? Genius Letto? Failed Take Charge? Nalcor and Nfld Hydro engineers, such as Stratton, who helped get us in this mess, who also does not believe in CDM? Has there been a conversion in culture?
      Winston
      Winston

    • Here's what Synapse says:(page 27)
      As to residential space heating there is the potential to electrify oil-heated homes by installing ductless miniisplit heat source heat pumps.
      Oil heating systems is estimated at 15 % ( I had estimated 25 %, which is high) . A low vs high switching goes from o.4 % to 2 % conversion per year. This suggests 120 to 1500 conversion per year. This program has funding for about 165 per year, so near the low range. At that, it would be 182 years for conversion. We have 11 years to make mayor mayor shift to going off fossil fuel, or we fail worldwide, if you believe the science , or ignore it like Trump.
      Synapse says HP COP is based on cold climate models : Average COP 2.86, Synapse used a calculated figure, which is inferior to monitoring, but their calculation is a good one. (I have previousy reported monitoring at -17C giving COP of 2.7) Synapse plans to do monitoring, maybe?
      Winston

    • What of the truth of the statements Nfld Hyrdo on NTV with self praise for Conservation and customer efficiency programs here, that are have done a good job?
      In the past I have have stated they are the 2nd worse in Canada (Take Charge)
      Even Tom Johnson in 2015 saw the truth and wrote to the PUB that both Nfld Power and and Nfld Hydro failed at this.
      Synapse , page 38-40, shows the energy efficiency savings as % of retail sales with Vermont and Rhode Island being over 3 % and 13 jurisdictions being over 1%.
      In Canada, Ontatio is 0.9%, Nova Sotia is 1.2 % (with Green Heat programs resulting in minisplits for 87 % in 2017, 81 % in electric heated homes)
      Newfoundland ? Nfld EE savings is 0.3 %, essentially meaningless, , along with NB at the bottom of the barrel, but says even NB is ramping up.
      From nfld to Vermont and Rhode Island there is a 10 fold difference.
      So Nfld doing a good job? Bullshit.
      Why does Ashley or Russell at the Telegram not write some truth as to this matter? We still are getting the self promoting PR and fake news from the power companies here, the same as in 2012, and not being challenged by the media.
      Winston Adams

    • Instead of wasting your time bitching and complaining about it on this blog all the time why don't you go try to do something about it?

      Maybe get off your arse and run for public office or something… instead of pissing away your time as an armchair critic who thinks he's got it all figured out.

    • These are issues presented by me , to the PUB almost 7 years ago. No one noticed then, except for Mr Vardy. Now Synapse is saying much the same thing, as I quote them. I think more people, including you, read Uncle Gnarley than read Synapse. I had it most of it figured out in 2012, published in the Telegram. I just add to it occasionally with monitoring evidence, which seems to bother you?
      Being on my arse is almost impossible, I even stand while at the keyboard.
      So, you think my ideas, facts and figures are worthy of public debate? You and me! 2 votes.
      I think we need to decrease off shore oil production. Guess I just lost your vote? Heck , my own family members, employed offshore, would not vote for me.
      Winston

    • You are the same person, who gets upset in the past here, when I post data, inconvenient truths, that is uncomfortable to you, and your buddies.
      As to relaxing, hardly no one more relaxed than me, believe it if you like. You don't even ruffle my feathers. Heck, if I take Bruno's insults, you are minor league. Bruno has some good points….SOME.
      But to suggest I run for public office or something! Public office, for me, that is a nutty suggestion on your part. As to running for something? I don't much run at all, but walk a lot.
      Fastest time I ever ran, I had 3 Mounties jump on my back , back in 1990, and the choke hold they applied almost done me in. I was lucky they caught me, as they had guns. I only had a tape recorder, which frightened the shit out of them. So, I am careful who I consider buddies, and doubt you are one. Any suggestions what I should run for, Pope? Nalcor, Hydro, or Fortis Board? Scout Leader? MF mitigation advisor?
      Maybe I should offer a prize for the best suggestion?
      Winston Adams

    • Bruno, no one sees the future, but may imagine it. You cite the same article which is a summary of prior puff pieces on battery storage. What is today well below 1 %, I think, of worldwide electricity storage systems, is not impressive, to me, or power companies generally. Such excitement as yours for this is as silly and uneconomic on a large scale, at present, as is Muskrat Falls. Recall the estimate of wind /storage of 17 billion cost? So what if now half that price? Then MW is part, what of the storage time in hours?
      I could get and give you the numbers of the small uptake of battery storage, compared to other types, if you want, but arithmetic is not your strong point. Your ignore arithmetic. When batteries , utility scale , grows exponentially for 5 or 10 years, let me know. We still have only 11 years for meaningfully curtailment of GHG or we lose . We are on tract to lose.
      Winston

    • Anon @ 23:32
      I've been assessed. I have obsessive tendencies,but not obsessive. So, a tendency allows one to focus, which can be, and is an asset.
      So what is your problem that TM considers you an idiot?

      Bruno, pumped hydro storage worldwide is about 127,000 MW.
      About 15,000 MW more under constuction.
      In the USA by 2017, less than 1000MW of battery utility battery storage in operation. Also storage hours of these is very low. So arithmetic shows. But battery with wind and solar has limited application so far, and picking up a bit.
      Pumped storage maybe 20 times less expensive.
      Winston

    • WA @ 17:13:

      I would take issue with your statement 'No one noticed then,….'. My memory is that you did present to the PUB, you are mentioned in the PUB report of March 201 and your submissions are on the PUB website – effectively, your submissions to the PUB are part of the submission body to the Inquiry.

      Considering the simple 4 questions below the Inquiry is to answer, maybe your data will get more 'compelled' circulation.

      PENG2

  4. Why has there not been any investigation into the very close ties between members of senior management and some of the local staffing agencies?

    During my time on this project these ties were no secret; it was also no surprise that most of the middle management (getting billed out at $1000 + per day) came from the same couple of agencies.

    Also, look at the disparity in number of contractors supplied by some agencies versus others

    Of course SNC's troubles were opportunistic…

  5. More on PEAK LOAD:
    Last Saturday and this Saturday we have almost identical outdoor ambient, about -1.9C at 3 pm. temperatures. Wind is a bit higher 29 MPH vs 20 last week.
    At this time the grid load is about 164 MW higher.
    the big difference is that today we have little solar gain. My attic is 7 F lower than last week, and the heaters are steady whereas last Saturday many on the south and west facing were off or on at a low level.
    If we allow 30 MW difference for wind effect , it is still 134 MW more to day, suggesting mot of this is from solar effect, or lack of solar benefit.
    Typical windows are R2, and walls for new houses R30, and ceilings R 60.
    Heat loss rate for a window is then , on a square foot basis, 15 times higher than for walls, and 30 times higher than ceilings. For older houses wit attics at R30 , windows loss is 15 times higher than for attics.
    Windows go from a heat gain to a heat loss that can account for much of the 134 MW difference in daytime.
    Triple glaze windows can be a very significant to reducing peak demand and energy savings and lower power bills, and lower GHGs emissions. At least one NS factory produced triple glaze windows, and a few house in Nfld uses them.
    It is not mentioned by Synapse nor ever by our power companies here.
    Perhaps local window mgs should consider it, and incentives be provided for them? There are many ways to reduce winter peak loads, and improve comfort levels in houses. The Green Way Forward? Is it on Letto's MFs mitigation list?
    Time EE stakeholders had a say, as to reducing energy use for residents and job creation, not just the power companies and the consumer Advocate. In Nova Scotia, they did. Why not here, for a real Made In Nfld Plan?
    Winston Adams

    • Winston, all great stuff, and very impressive and if the objective was to reduce our power consumption, you would be worth more than your weight in gold bullion. But sad to say, and as you know, and you have heard me say this before the objective of hydro and nalcor is to maximinize the amount of power we consume. Npower and the Pub are just innocent bystanders. Now as for government, and it doesn't matter which govt. they take their advice and marching orders from hydro and nalcor, they are still the world class when it comes to anything power, and the tail is still waging the dog. So the current push is to electrify everything in sight, the cat, the old clunker in the driveway, and even the driveway to melt the snow. The very latest of course is to bribe those on oil, wood or what have you to electric heat. Give the home owner a couple of bucks for insulation, programable thermostats, scollogwags and plastic over the windows. Nothing for installation of heat pumps, etc. as you point out. Ms. Coady and ball have been sipping the coolaid, Letto has been sloshed on it so you are just an inconvenient thorne in their sides, that's why some tell you to get off your ass and shut up. I have been told that a couple of times too, but I just ignor the trolls. Let them eat cake, they are not getting any of my bread. So the bottom line is no matter which govt. is in power, ball, or chess, or coffin or tom's dog, nalcor, hydro are calling the shots. So until some govt. has the balls to control the monster that has been created by past govts. there will be no change. Just don't drown the consumer, but keep his nose a half inch above water, we need them all for our survival is the way it is going to be thinks Joe blow.

  6. Prime Minister Trudeau says that nothing was done inappropriately in the SNC-Lavalin scandal. However 2 senior cabinet ministers resigned over it and his most senior office advisor and friend from university fell on his sword because of it. Just an erosion of trust he says and there is a promise now to do better in future.!!?

  7. In the simplest words, the Inquiry is to:
    4a – determine if MF was improperly sanctioned
    4b – determine why the sanction price has grown by 100% during construction
    4c – determine if the government acted properly when excluding the PUB from a pre-sanction review of MF
    4d – determine if the government was fully informed when deciding to sanction MF

    To date, the government of the day and Nalcor have been shown to have acted deficiently with respect to 4a, 4b and 4d. I think showing deficient actions for 4c will be more difficult – 4c needs to be assessed considering effectiveness of PUB style boards with similar regulatory regimes, this will be difficult and I am not entirely sure much can be shown as deificient actions with this.

    Generally, people in NL should step back and look at the whole of what is being determined – focusing on minute details isn’t giving much understanding of what happened and went wrong or how to fix. We are likely doomed to repeat the MF mistakes with our current train of thought – our passing the buck to the retried politicians when it is us who elects them is little more than denying our culpability. A prime example of this is that we might very well re-elect 6-7 politicians later this year that voted for MF (and were then proud to claim they voted to enable MF) and now try to claim 'we didn't know' – Paul Lane is a great example of this B$ train, they didn't want to know then and didn’t bother to investigate even though there was lots of publically available info. The public shouldn’t think they are innocent – there was lots of info available, but 80% ‘wanted’ to believe DWs vision.

    PENG2

    • I see that the nameless troll has returned to blame the helpless victim. Where where you standing tall, warning the public, along with those of us unafraid to sift through thousands of pages to warn voters that the MF project was an expensive, unneeded project, built on shifting sand.

      Your "analysis" is always to victim shame from the shadows. Stand up like a man and let us see your face!

  8. The government of the day misrepresented the facts, what they meant, what was needed, what was affordable, what the risk was, what would or would not be a reasonable risk, and Nalcor executed a contrived mechanism to do what government wanted.

    Included with that was a significantly inadequate response from the opposition.

    By the time that voters began to catch on to what was happening it was too late.

    • MA @ 10:37:

      I don't disagree – but who has to take responsibility for 'inadequate opposition' or for the public believing the government B$?

      The information was available, if people wanted to read(just 2 sample links showing what was there at the time for information):
      http://www.pub.nl.ca/applications/MuskratFalls2011/comments.htm
      http://www.pub.nf.ca/applications/MuskratFalls2011/files/comments/14-MC-2012-02-27.pdf

      14-MC-2012-02-27 especially show a lot of quality opposition and that this opposition was available before the FLG but after the initial release of FLG terms – so the opposition was there in time to prevent the commitment to MF.

      I standby it was the public not wanting to believe – we constantly think we are more important on the global and national scale than we are. We really wanted to believe the B$ about us being an 'energy warehouse' and Quebec was the boogey man – that is why we allowed ourselves to be deceived. Until we change our attitude, we will repeat MF type fails.

      The fact that we still will most likely elect 6-7 of the politicians responsible for MF this year confirms my stance.

      PENG2

    • Peng2, I do disagree with you on a number of points, but on your last point, I have to agree with you, but not able to explain totally why people vote the way we do. Agree on the 6 or 7 mha's that you mentioned. And would agree that Paul Davis the 6.2$ premier would be elected again this time around, he was elected last time, and his only way out of politics was to resign, the people would re-elect him as often as he kept his hat in the ring. And I would venture to bet that if KD or Danny ran again they would be elected with a land slide, particularly on the Avalon. I am un able to give any rational explanation for that reasoning, just to say it is an inate characteristic of provincial voters, or in the genes. I predict now that chess will be elected with a land slide on the Avalon. Who are you voting for,, ask Joe blow, just to prove my point. Lol.

    • AJ @ 11:14:

      Considering that my current member is 1 of those 6-7 I noted, I have a bit of soul searching – I will not cast a ballot for him if he runs again. I am not political – I usually vote for the candidate or in the best interest of my district and never just for the party.

      I don't mind disagreements – but providing backup is key to making a good argument.

      PENG2

  9. Many UG readers may have missed the comment debate between PENG2 and MA on the last piece MAr 4-6, about 1/3 the way down, as to relevance of evidence. PENG2 stresses most important is if best practises and reasonableness was applied, as to what was known and should have been known to make proper decisions, and the issue of what weight the commissioner should apply. MA points out the continued misleading statements during the Inquiry of 18,000 bls of oil burned per day at Holyrood, went unchallenged.
    I would agree with PENG2 that "best practises" is a key standard.
    18,000 lbs per day is a fact, but typical 1 or 2 days per year, so very misleading to both the public and the Inquiry let it go not challenged. If not challenged, then no weight may be applied to the it.
    18,000 lbs per day is relevant, I suggest, in the broader context of our grid high winter peak. Reducing the relative peak should be "best practise" for power companies. Instead MFs, as Straton stated was planned on continue to increase relative peak by allowing continued uptake of baseboard heat instead of CDM, efficient heat, DSM.
    So MA is also correct: MHI says Nalcor never used best practise for forecasting , as to end-use method, but then MHI makes excuse for Nalcor to say this is acceptable.
    Such approach of avoiding best practise is on a very large scale, and should be summarized.
    Dave Vardy mentioned in this piece of not using best practise.
    I submit, if best practises were followed, to apply best practises, the lowest cost option would not exceed 2 billion, so even 6 or 7 billion was insane. Not only CDM was ignored, but best practise for wind addition was ignored I suggest; this needing evaluation of Hatch report on wind, which has been ignored. Also the 800 MW of island hydro, as to more than 78 MW suitable has been ignored, and the engineer(was with Shawmont) with much knowledge on this was denied standing by Leblanc)
    So, the 18000 bls was more of a lie than not, and misled, and dozens of this type of misleading.
    Fine for PENG2 to say the public should be more knowledgeable, and they should, but also it is easy to mislead on technical issues:even high ranking govn officials say they did not understand risk factors P50 or P75 was not important to them.
    When properly explained,much is not so complicated. But Nalcor wanted it to be beyond understanding for the average joe, and only understood by their own self appraised world class experts .
    So at this late stage we see Synapse approach for analysis for peak winter load, best use of resource etc which was all ignored by Nalcor.
    Not only Holyrood fuel reduction, but transportation fuel, oil for residential etc. being considered.
    Synapse is a PUB initiative, and contrary to Nalcor approach that gave us the boondoggle. Even now, Letto is not following Synapse, and adding to peak winter load. Does the public understand the deception, even now?
    Winston Adams

    • WA @ 11:38:

      I think this should be attributed to me, not MA; I quoted the MNI critical exception from the PUB report regarding forecasting:
      [start]
      So MA is also correct: MHI says Nalcor never used best practise for forecasting , as to end-use method, but then MHI makes excuse for Nalcor to say this is acceptable.
      [end]

      Also, to clarify, I don't necessarily think the public needs to 100% understand the techno babble – well beyond the understanding of all but maybe 5%. However, I standby my statement that there was more than enough info in the public that there should more questions raised and to cry poor now because we were misled now falls short because at the time you wanted to believe in snake-oil and not reality.

      PENG2

    • Most Engineers, working on National Energy sponsored projects in the early 80's attempted to raise awareness of the Holyrood thermal dependence on fossil fuel problem. Tory minded interests, killed any initiative to switch to renewables, and along came "forever and ever offshore" attitude. We still seem to be in this rut.

    • PENG2, you are correct, you pointed out the quotes from MHI as to forecasting , end use is best practise, but not followed.
      Of your debate I think( my opinion only) you are correct on the technobabble points, 75 % vs 25 % for MA, on some things you agree.
      On the public information available I disagree with you, that there was more than enough into the public domain. On the one hand large engineering technical reports was generally beyond the understanding of most, as you say, and there was information overload on this, even dumping procedures used by Nalcor.
      I consider the public submissions were relatively few, not a lot.
      There was no investigative journalism to decipher the complex and explain it to the public to raise concern. On the contrary, Nalco successfully used to media for their PR, much like this past Friday with the climate change plan for oil switching; business as usual.
      Your point is valid, far too many Nflders are content to be misled, which even AJ cannot explain. I say it is part of our culture, that needs fixing. Indeed to re-elect MHA that enabled MFs is …..a stumble to find the word to describe such a thing. Accomplices to the boondoggle?
      That I attributed your point on MHI and forecasting to MA: I was on the "John" with a sever bowel cramp, yet with my laptop, to write the comment. I did a 15 second review of your and MA comments, that they were important points. The intensity of the cramps, which I seldom encounter, must have rearranged in my mind who said what….LOL. Lesson learned, maybe…..when going to the john,with cramps, leave MFs behind. Cramps take priority.

      Winston

    • WA @ 13:40:

      For the public information, I just cant get past as per 14-MC-2012-02-27, it was presented to the PUB and it showed that in the 6 months preceding 27-Feb-2012 that the commentary in The Telegram was 119 vs 15 against MF. Also, of those 15 supporting articles, 9 were submitted by either Nalcor executives or Government persons – that to me is a significant body of dissention 'IF' somebody bothered to read, and it didn't even require understanding techno-babble.

      Adding to that was the statistics of how many presented to the PUB and the average number of persons quoted as watching the webcast of hearings being 622/day does show that the info was there – to me it just comes back to the public wanting to be an 'energy warehouse', not basing decisions in fact.

      PENG2

    • PENG2, so , about 7-8 times more in support than opposed, in letter writing or articles…..12 % opposed, naysayers, you suggest is significant dissention if somebody bother to read. And didn't require understanding technobabble. I disagree.
      My 3 pieces in the Telegram later, in the fall of 2012, is considerable technobabble, though I tried to make it understandable. One piece Russell at the Telegram used the heading"By the numbers" It is somewhat like what Synapse does now, readable but still technical. So, how many read my pieces…….just a few comments were posted.
      As to 622 watching the webcast, you imply that is a lot? Andy Wells stated at the time that more were watching "The Young and the Restless" , so few were not engaged , not many interested, thought you say the info was there. Hearings and Inquiries are for the most part rather boring, most would agree, with only nuggets of interest now and again. The media could help bring further interest.
      My later presentation at the PUB, as to Conservation and EE Plan, there were 3 women siting a the back. I inquired if either or all were from the media. None were. They were all power company PR types, Hydro, Nalcor , Nfld Power. I exposed that here we were 2nd worse in Canada, others doing 10 times more….but, not a word by the media and so the public not informed. This was not webcast. Essentially all Nflder not knowing of of the existence of a Conservation Plan. The consultants reports in the past , I think not regularly filed with the PUB….. settled beyond the PUB by power companies and the Consumer Advocate! $300,000 reports (paid by ratepayers) essentially kept out of the public record at times.
      Sure many believed in DW's BS, but our media, getting ad revenue is in a conflict of interest, and under the cone of silence, for the most part.
      Did the media coverage, as I noted, on Letto, and our climate action plan impress you? I would wage that not 25 people will sign up for this latest oil switch to baseboard scheme. So, what to celebrate on Friday? Did or will the media pick it apart, a deep dive , as they say?
      Winston

    • WA @ 15:59:

      That’s a typo on my part – 119 against and 15 for MF, 12% against. What was interesting is if you check the roll call of those dissenting, there were 6-7 former PC members, 5-6 MUN profs and several other citizens with extensive technical/professional background like EC, yourself and UG among others.

      I am not sure what the 622 number means – it doesn’t seem like a lot, but it is a hearing that is ‘boring’. Pretty telling is that even today we still have 40% supporting MF and more than 50% think the Inquiry is a waste.

      Apathy by our voters is deep, and honestly I am not sure most even care except to listen to sound bites – and I don't know what the cure is. To get elected in NL, all someone needs to do is claim the Quebec boogey man, that he will sue for the UC(every premier since Smallwood) and protest on the GBs(Tobin) – we elect a sad lot everytime.

      PENG2

    • Numbers can be deceptive, Bruno used that to promote the "great uptake " of batteries for storage, when the uptake is still very small.
      So , 119 naysayers wrote to the Telegram (are any repeat from the same people), 119 out of our population of adults is a small fraction of lees than 1 percent.
      In NS, if I recall correctly, amount 170 small / medium companies filed as stakeholders, as a group, for input to Conservation /Efficiency programs. These provide goods and services greater than LED light and thermostats and plastic for windows. These represented thousands of jobs for those firms.
      Here, not a single company seeking such status. Some are afraid of the power companies, including Nfld power: they can delay or hassle power permits etc. …I have been told that, especially heat pump installers.
      Yes apathy runs deep, and we elect a sad lot, because a sad lot run. And perhaps it reflects our culture, I have suggested.
      Take the submissions/ comments to the PUB on mitigation. A handful, less than as to MFs. Power Rates may double but only about a dozen care on that! Suggests leave it to the powers that be……
      The Inquiry……how many of the public attend?
      Nflders…….Too green to burn? Or a corrupt system?
      Winston

    • WA @ 18:31:

      No doubt there was some duplication of authors – but 2 letters by GB for would have had the same effect skewing the result percentages as 16 letters by say UG – so I would argue that the 119 : 15 is an probable ratio accurate anyway. The main point being is that the subject area of the commentary (again all published publically) showed issues with MF while there were only 6 commentaries by non-government/Nalcor persons supporting MF. To me, it was a significant database that was easily read by anyone and should have raised issues – this is selection of commentary between June 2011 and February 2012 by a person providing comment to the PUB.

      Another issue rose then was the legitimacy of the KD government in June 2011 – she has won a leadership race after DW quit, but no won an election. The election was held in the Fall of 2011 and was based on a develop MF platform – and the PCs won a sizable majority. To follow is a comment from June 2011:

      [start]
      The Telegram’s editorial of June 1, “Sound advice,” quotes Premier Kathy Dunderdale as follows: “Now, Mr. Speaker, my own personal view is if anybody goes to represent the people of this province then they should have the blessings of the people of this province.”

      Well then, using your own words, Premier Dunderdale, how can you lead this province and “represent the people” on this multi-billion dollar, debt-infested, high-cost Muskrat Falls project — without having “the blessings of the people”? Neither the project itself, nor your anointment through an undemocratic fumbling with the constitution of the Progressive Conservative Party of
      Newfoundland and Labrador, has “the blessings of the people.”

      Accordingly, if you truly believe that your leadership must have “the blessing of the people,” then you can only “represent the people” on Muskrat Falls after the election.

      Let’s see what the people think before you put us into billions more in debt, dramatically increase the power bills of Newfoundland and Labrador consumers — all while giving our business competitors and the people of Nova Scotia Muskrat Falls power for free.
      [end]

      I just can’t seem to make a logical and fact-based (ie non-emotional) argument in my own mind that the people didn’t vote and get exactly what they wanted – misinformed possibly but only if you accept that NLers are possible too irresponsible to vote because they don’t bother to understand the issues and our elections are little more than a popularity contest.

      PENG2

  10. The Muskrat Boondoggle started at the top and worked its way down to cabinet, the Official Opposition, other MHAs (on all sides), and the public service.

    Significant blame also goes to the feds (THE enabler) and to our municipal government leaders (who were largely silent).

    Nalcor was the tool used by the above.

    Wilful blindness and misrepresentation ran rampant.

    Voters never had a chance.

    • Oh sure! Cassie Brown(e), a wonderful NL writer said it well in "Standing into Danger". Quita Hope Simpson in "White ties and tails," October 1935, page 240, referred to the Merchant shopkeepers, and the"root troubles in this country, (NL), is that there is no aristocracy." Have we learned nothing after all the PHDs graduated since Smallwood bootstrapped MUN?

    • Whether peng2 is paid or no pay, I have no idea, maybe he is just the messenger. For whom I don't know. But as the saying goes, don't shoot the messenger, he generates a lot of discussion on this blog, what would we do without him??? Maybe he is UG in descise says Joe blow!! Lol.

    • We know he works for Nalcor. We know he owns Fortis shares. He is critical of the old Nalcor , but not of the newer version. He does not deny that he is getting paid to influence opinion on this blog. He steers clear of any issue raised that is critical of Nfld Power. He has filed no comment, technical or otherwise, with the PUB, critical of the boondoggle. He hides his identity. He does not think SNC should face criminal charges, despite a long list of criminality. He is pleased with Leblanc , except when Leblanc goes where he does not want. He is an engineer, civil. He does not trust the safety of the North Spur. He has doubts about LIL reliability. He likely has support staff to assist with his blog comments. Other than that, we should trust him to want justice done? Hmmmmmm. Does he know John Smith?
      PF
      PF

  11. David Vardy's redirect from the Telegram about Holman's analysis that there never was an "off ramp" for proceeding with Muskrat, at sanction, tells it like it was. Can we have any confidence that change has arrived at the upper levels? Do MPs like Seamus really have confidence in the school master? Why would you consider that Ches is the answer? This Concerned Citizens Coalition needs to get its head out of the past and look at the present and the future. I hope you all listened to Enwright on CBC this Sunday AM. There is real danger ahead.