Guest Post by David

At the recent Nalcor AGM CEO Stan Marshall repeated his
mantra that Muskrat Falls will “finish strong”. He said that its costs are
comparable to, if not lower than, the unit costs of other Canadian energy
projects. The Chief Financial Officer bragged about the growing asset base and
spent little time warning of the large liabilities.  When asked about dividends at the Muskrat
Falls Inquiry the CFO said they were “rock solid”.

Nalcor’s annual report spoke in glowing terms about
the project and about the profitability of Nalcor. The prospects of growing
dividends were glowing. Suddenly the problems had vanished and we were living
in a world of milk and honey. What had changed to spark this bright and
cheerful outlook in the face of a financial disaster? Was Nalcor “gilding the
lily” along with the politicians who are looking to sweep Muskrat Falls under
the carpet in advance of imminent federal and provincial elections.

The Nalcor presentation to the many acolytes in the
room at the Holiday Inn in St. John’s talked about the profitability of power
exports. Nalcor put a positive spin on the revenues flowing from a large block
of Recall power being exported through Quebec transmission lines. Nalcor wanted
to talk about the $59 million in gross revenues and not upon the paltry $23
million after paying transmission and other costs. Upon questioning Marshall
admitted that the 3.8 cents/KWh profit on the sale of 1.6 billion kilowatt
hours of Recall power netted only 1.4 cents after transmission costs were taken

At the PUB hearing into rate mitigation Nalcor is
reporting reductions in the annual costs arising from Muskrat Falls, below
those reported previously. While the official capital cost of the project has
not changed from the $12.7 billion reported by Stan in June of 2017 the forecast
cost of servicing the capital costs has dropped.  Why? What are the drivers to reduce costs? Higher
export revenues are also being forecast to mitigate future power rates. Vast
dividends are being forecast, dividends which can be used to reduce power rates
and make ratepayers happy.

David Vardy

Is Nalcor gilding the lily? Have they adopted a public
relations strategy to downplay the costs of Muskrat Falls and lull us all into
complacency over this monumental boondoggle? Are they undertaking creative
accounting as new and lower revenue requirements are being revealed?

Marshall admitted in response to my questions at the
AGM that the 17.42 cents/KWh for 4,641 GWh of Muskrat Falls he reported in his
February 2018 presentation at Memorial University has not changed. He admitted
that the project is too large for our needs and that the 17.42 cents is based
upon use of the full output. In reality the unit cost is much higher!

In his 2018 presentation he forecast demand of only
1,324 GWh of the 4,641 GWh of Muskrat Falls power forecast to be available at
Soldier’s Pond in 2021. If only half the power were used the cost would be
twice 17.42 cents, namely 34.84 cents/KWh. When only 1,324 GWh are used on the
Island the cost per unit becomes 61 cents/KWh!

The cost of power
This post is intended to disclose the unvarnished cost
of Muskrat Falls, based largely on the 2018 presentation at Memorial as well as
other more recent data, including Nalcor’s 2018 annual report released at the
AGM in April of 2019 and responses to information requests submitted by the PUB
at the rate mitigation hearing. Key data are as follows.

Key 2021 data from
Stan Marshall’s presentation February 15, 2018:

Forecast retail

Forecast retail rate 22.89 cents/KWh (not including

Forecast retail rate at sanction 15.12 cents/KWh

NP share of retail rate 4.43 cents/KWh

NP distribution cost $307 million

NLH share of retail rate 6.80 cents/KWh

production and unit cost

Muskrat Falls purchased power cost for 1,324 GWh,
spread over 6,935 TWh, 11.66 cents/KWh

Forecast load 6.935 TWh

Muskrat Falls production at Soldier’s Pond 4.641 TWh

Cost per unit of Muskrat Falls power 17.42 cents KWh

Combined generation and transmission cost  for Muskrat Falls delivered Soldier’s Pond
$808 million

Forecast demand
Total Island demand forecast for 2021 6.935 TWh and
growing very slowly

Based on 22.89 cents/KWh this 6.935 TWh will cost $1.587

Muskrat Falls will supply 1,324 GWh and other sources
the remainder, 5,611 GWh

Nova Scotia Block sales at no energy charge 1,166 GWh

Other export sales 2,151 GWh

The revenue requirements for the Island interconnected
system will be $1.587 billion, including the $808 million for Muskrat Falls. In
order to compare the unit generation and transmission cost of Muskrat Falls
power with the unit cost for other power in the existing isolated island system
we must remove both NP and NLH distribution cost which I have estimated at $326
million, yielding revenue requirement of ($1,587 million less $326 million =
$1,261 million)  or $1.261 billion. When
we deduct the cost of Muskrat Falls power, $808 million, from this we get $453 million.
Dividing this by the 5,611 GWh from sources other than Muskrat Falls we
calculate a unit cost of non-Muskrat Falls power of 8 cents/KWh. This gives us
a comparison of Muskrat Falls power at 61 cents/KWh with other power, mostly
hydro power on the Island, at 8 cents. This illustrates just how big a shock
Muskrat Falls brings to the economics of our power system!

In his post of
April 15th PlanetNL draws upon the February 2018 Nalcor update and the new cost
projections presented to the PUB. The February 2018 (page 23) update shows the
Labrador Island Link comprising 36.6% ($3.7 billion) of overall direct project
costs ($10.1 billion) excluding financing ($2.6 billion).

If we also
apply this same 36.6/63.4 split of transmission to generation costs to the 61
cent per KWh cost of Muskrat Falls power we find that generation accounts for
39 cents and the LIL accounts for 22 cents. This makes it difficult to contend
that the project is mostly transmission or to argue that the generation costs
alone are within any reasonable range of acceptability.

The 2021
revenue requirements for the LIL (based on “cost of service” rate recovery),
using the latest numbers supplied to the PUB for its rate mitigation hearing,
are $380 million including financing costs. Applying the 36.6% to calculate the
overall revenue requirement produces $1.038 billion as the 2021 revenue
requirement. In fact this is a conservative estimate because it assumes that
the minimum equity is 25% as required in the federal loan guarantee. When the
$1.038 billion is adjusted upward to reflect the minimum of 35% equity for
generation assets the revenue requirements far exceed $1 billion.

Even if we could use all of the power from Muskrat
Falls it would cost us more than twice the cost per unit of the existing
system, namely 17.42 cents/KWh compared with 8 cents/KWh. We have to cope not
only with cost overruns at Muskrat Falls but also with the low demand which precludes
economies of scale. Export sales help but unless sales are made at compensatory
rates the burden of cost remains with Island ratepayers.

Nalcor has calculated the cost of Holyrood power at 15
cents/KWh. Muskrat Falls was promoted as a more cost effective source of power
than Holyrood because of fuel savings. We were told that Muskrat Falls enabled
us to keep dollars at home and not send them to the oil industry. Instead we
built Muskrat Falls and now are in the hands of Wall Street who expect us to
repay the borrowed money with interest. Fuel costs are more than offset by
higher interest costs.

Back end loading
Nalcor uses a cost recovery mechanism for generating assets
which is different from the mechanism used for the rest of our electrical power
system. It is also different from the mechanism used to recover costs from the
Labrador Island Link. It is different from the system normally used by the PUB
in rate setting. Nalcor uses a traditional approach for the Labrador Island
Link but a non-traditional approach for generation assets. If the traditional
cost recovery system were used consistently the financing costs would be as
much as $1 billion higher, using the targeted 8.4% return on equity. If rates
in 2021 were calculated to recover the money borrowed by the province to
finance its equity contribution they would be more than 10% higher than

If traditional
cost recovery had been applied, based on “cost of service”, the financial and
other costs would be $1 billion higher, namely $3.6 billion instead of $2.6
billion, making it a $13.7 billion project. The principal difference between
cost of service and “escalating supply price” recovery is that the return on
the province’s equity is deferred, forcing the province to wait for its 8.4%
ROE. This is intended to keep rates low and avoid early rate shock. The large
cost overruns were so large as to drive up revenue requirements,
notwithstanding the back end loading.

The higher
financial cost arises from the exclusion of return on equity capital during
construction, known as allowance for funds used during construction (AFUDC). I
have recalculated the cost using the cost of service approach, from which I estimated
the need for an additional $1,065 to be added to the financing costs bringing
them from $4 billion to over $5 billion. This will also add to the cost of
equity capital included in the annual revenue requirements.

The hybrid
methodology used by Nalcor for generating assets shows that return on dividends
are understated in the early years after commissioning. Nalcor’s response to
information request PB-242-2018 shows that only $15 million is included in
return on the province’s equity investment in the generating assets (Muskrat
Falls itself plus the line from Churchill Falls to Muskrat Falls) of more than
$3.2 billion. If we use 8.4% as the ROE established in the Power Purchase
Agreement and apply it to the value of generating assets, adjusted upward to
$4.265 billion to include AFUDC, the annual equity cost will be $358 million,
of which only $15 million is recovered through rates in 2021 and $343 million
is deferred into the distant future through the “escalating supply price” cost
recovery mechanism. If we use instead the province’s borrowing rate of 4.6%
then the equity cost will be $196 million and the deferred amount is $181

Revised Revenue requirements
What are the
revenue requirements after taking account of export revenues, fuel savings and
the costs imposed on the province through back end loading? We begin with the
numbers we have taken from the Nalcor presentation of February 2018. Stan
Marshall confirmed at the AGM that the 17.41 cents/KWh has not changed, nor has
the output of the plant net of line losses, namely 4.641 TWh. This tells us
that the starting point is $808 million.

At the AGM I
asked about the export of 1.6 TWh disclosed in the 2018 Nalcor Financial Report
and which generated net revenues of $23 million, well below the gross revenues
of $59 million, for an average net return in Canadian dollars of 15 cents/KWh.
If this is applied to the exports of
2,151 GWh shown
in the February 2018 update we get a return of $32 million. Recognizing that
the transmission cost for sales to Nova Scotia may be less than those paid for
export of Recall power I have adjusted this up to $50 million. The cost of
number 6 fuel at Holyrood in 2018 was estimated at $150 million. This is the number
I have used for fuel savings.

I have made an
adjustment to the revenue requirement in 2021 to reflect the cost of provincial
equity in the generation assets (including the line from Churchill to Muskrat
Falls), which is a present charge on provincial taxpayers. I have used not the
8.4% return but rather the province’s borrowing rate of about 4.6%, which adds
$181 million.

In summary the
revenue requirements to be raised either through rates or rate mitigation are
close to $800 as follows:

Rate Mitigation
Response to
information request PUB-Nalcor 56 reads as follows:

“The estimate
of $60 to $70 million to reduce domestic electricity rates on the Island
Interconnected System by one cent per kWh is a reasonable guideline to consider
in the discussions and analysis for rate mitigation.”

This suggests
that if rates go up by 1% then revenues will increase by up to $70 million. It
also suggests that if rates are kept at 12.6 cents/KWh instead of rising to
22.89 cents/KWh then the cost of rate mitigation will be about $700 million. It
does not admit the possibility that higher rates will generate little or no
revenue and that elasticity of demand may be much higher than is assumed by
Nalcor. Perhaps the PUB should build up its own estimate of the shortfall to be
mitigated rather than rely on the formula given in this RFI.

The public
debate around rate mitigation revolves around forgiveness of dividends as a
means of resolving the financing demands of Muskrat Falls. There are two
problems with this. The first is that the province has already assumed
responsibility for the more than $3.2 billion invested as provincial equity in
generating assets. This is a given. The second is that revenues will not come
close to recovering dividends based on reasonable assumptions around elasticity
of demand.

In estimating
elasticity of demand we must understand that previous empirical research in
this province has relied mostly upon small increases or decreases. As we take
quantum steps along the demand curve there will likely be abrupt changes from
past experiences which may make previous elasticity estimates of doubtful

When I speak of
“gilding the lily” I am referring to the tendency to downplay the burden of
Muskrat Falls. When citizens understand that the cost per KWh is 61 cents they
will also understand that recovery through rates was never an option and that
the notion of dividends is preposterous. High energy costs do not generate

On April 13 the
Globe and Mail reported that “Renewable energy hits its stride,” citing cost
reductions in solar and wind power as well as in energy storage.

The viability of renewable energy and its
global surge underpins bullish enthusiasm for

companies such as Brookfield Renewable
Partners LP, Algonquin Power, Northland Power and Boralex Inc. – Canada’s
leading green energy producers, which are positioning themselves for strong
growth in wind and solar power across the world

In December, the Alberta Electricity System
Operator – which runs the province’s grid – announced that it had entered into
three wind contracts for a total of 763 megawatts at an average cost of 3.9
cents/kWh. The Alberta government announced in February it

had contracted for 100 MW of solar capacity
at a price of 4.8 cents/kWh.

Prices are even lower in parts of the
United States. Idaho Power stunned the energy industry two weeks ago by
announcing a deal for 120 MW of solar power at a record-low price of just 2.2 US

New York-based
Lazard Ltd., a financial-advisory and asset management firm, produces an annual
survey of average electricity prices around the globe, a work that is
considered the bible among industry executives because it calculates the
levellized cost of electricity – the average price needed to break even over
the life of a project. The takeaway from the most recent survey, released in
November: Prices of electricity from large-scale solar and wind projects had
declined to the point that, even without subsidies, they were at or below the
cost of power from conventional sources such as coal, nuclear and even natural
gas in some locations.

According to Lazard, the low end cost for
onshore wind is US$29/MWh, compared with an

average marginal cost of US$36 for natural
gas. The cost of utility scale solar is almost identical to that of gas, Lazard

The levellized cost of wind power has
dropped to a third of what it was in 2009, while solar
costs have come down by a factor of eight,
Lazard reported…

Investors have been rewarded. Over the past
five years, Brookfield Renewable units have

delivered total gains of 74 per cent,
including dividends. That’s more than double the total return for the
S&P/TSX Composite Index over the same five-year period.

Northland Power delivered gains of 79 per
cent over five years, also with dividends, while

Algonquin Power delivered an astounding 154
per cent – all of which suggests that renewable energy is enjoying some

But the appeal of renewable energy
producers is strong, particularly for risk-averse investors who like to see
strong profitability and steady payouts. In most cases, these companies are generating
stable cash flows from long term contracts. And they’re paying big dividends,
which is especially nice when interest rates are low and the economic outlook
is cloudy.

Dividends are
driven by low cost power, not by power which costs 61 cents/KWh. Muskrat Falls
cannot compete, nor can Gull Island power. Let us not compound our Muskrat
mistakes by trying to build Gull Island.

The fact that a
power purchase agreement ordains a rate of return of 8.4% on generation assets
is nothing but an absurdity, magnified by the lack of future demand at
compensatory rates. Despite the supremacy of parliament the House of Assembly
cannot by legislative fiat turn a failing energy plan into a profitable

Muskrat Falls
must not be pushed under the rug in this pre-election debate. Citizens must
insist that the truth be told, the unvarnished truth and nothing but the truth.

David Vardy


If a Big Mac costs McDonalds $10 to produce and it is sold for $1.50, McDonalds will go out of business. They would not declare a profit!


Bill left public life shortly after the signing of the Atlantic Accord and became a member of the Court of Appeal until his retirement in 2003. During his time on the court he was involved in a number of successful appeals which overturned wrongful convictions, for which he was recognized by Innocence Canada. Bill had a special place in his heart for the underdog.

Churchill Falls Explainer (Coles Notes version)

If CFLCo is required to maximize its profit, then CFLCo should sell its electricity to the highest bidder(s) on the most advantageous terms available.


  1. This is a sobering analysis. I can see why we might push for energy intensive manufacturing in Labrador and attempt to use the full capacity. I can also see demanding the federal government purchase part of the system.

    None of the political parties are looking at the gory details. The spending problem, aging population and massive debt. They must assume that the voting population doesn't want to deal with reality.

    Even if a future government wants to deal with these problems, they'd have to purge the civil service management first. There is nobody here capable of implementing the needed changes, and worse, many will resist any change to the status quo.

  2. Maybe someone should ask is there enough water coming over MF now to guarantee full power generation?

    Agree that there will be a small headpond, but MF doesn't have the storage capacity to operate longterm at capacity without impacting UC operations, and we have no ability to do that. Id offer that on the average 80% generation capacity will be closer to the reality to be conservative – budget say 650MW, and then start deducting transmission losses, the NS bloc etc.


    • Interesting deduction PENG2.

      And taking into account current CF operating parameter (and using this 80% average generation) this could translate into slightly below 100% generation during the winter peak and less than 75% the reminder of the year. (And even MUCH less during summer, when CF proceeds with its multiyear turbine overhaul program).

      The good news is that such MF "probable" generation parameters fit well with NL needs.

      The bad news is we still can't predict well in advance the actual water flow (mostly coming from CF) – thus killing much of the potential export value.

    • Anony @ 12:58:

      Not surprised you didn't read closer – the 4.9 TWhr (actually the article says 4.6TWhr, did you make a typo?) is at Soldiers Pond after losses are accounted for.

      I am suggesting that there will be enough water for 650MW of generation, closer to 3.5TWhr at SP or 400-450MW.

      I guess your 560MW average output at SP is too high and wont be reliably realized.


    • Anony @ 16:35:

      Quoted from above:
      Muskrat Falls production at Soldier’s Pond 4.641 TWh

      By all means, if you see a math error in my statement – lets discuss it. My statement is simply that MF will have enough water to produce ~650MW reliably, by the time losses are factored in that's about 400-450 at SP.

      FYI, the 1.3TWhr Island demand is about 150MW, or about Holyrood at 30% – give or take the reality it produces at.

      A more interesting discussion is who is going to pay for losses – the Energy supply with Emera has some nuances that could mean that delivered power is as per the NS party (more or less it is conceivable that NL covers losses the 2-3 conversions and the long distance transmission losses).


    • PENG2 @ 16:35:

      In my last paragraph I was refereeing to the Measurement and metering provisions of the Nalcor-Emera Supply agreement, I made a couple typos.

      Here is article 3.7:
      The measurement and metering of Nalcor Supplied Energy will be conducted in accordance with the prevailing practices of the System Operators for NL and NS. The measurement and metering of any Energy that is sold by Emera to NSPI pursuant to this Agreement will be conducted in accordance with the prevailing practices of the System Operator for NS.


  3. "Gilding the lily", or "all that glitters is not golden", which every one you use the meaning is the same. Cover something that is not worth much with a thin layer of gold and bingo, look what it is worth now. Well only the same as it was before. 61 cent power from muskrat vs the cost of wind below 5 cents. These are the the numbers we must get ingrained in our brains and not let nalcor, govt. or fast talkers convince us of anything. We don't need to be experts like Vardy, but I take his numbers as factual and accurate, where as I take nalcors to be "gilded". Why??? Because Vardy doesn't have a horse in the race, and tells it like it is. Nalcor from day one told it with lies galore right from day one. We need the power, and it was the least cost. Now my common sense told me that from day one that was, to use her word, "hogwash". And we all know that now says Joe blow.

  4. Considering the election:

    TP is out (she did vote for MF, however GL is in – and he was part of the 2011 PCs voting for MF. So, no change – still about 6 that voted for MF looking to be reelected.


    • Neither of the two prominent gentlemen strike me as A+ Premier material. Neither of the proposed platforms seem to based on Sustainable Development principals. No voter should take the risk of giving either party majority control. Flip a coin for the minority government, (Representative Format), which will do the least damage, and support your own community views. Good Luck all.

  5. To this I say Amen! "Let us not compound our Muskrat mistakes by trying to build Gull Island."

    In what is sure to make Winston swoon "Last week, the Massachusetts Department of Public Utilities awarded Vineyard Wind a 20-year contract to provide electricity at 8.9 cents per kilowatt-hour. That's about a third the cost of other renewables (such as Canadian hydropower)"

    The latest offshore wind turbines have 200M towers, a 220M sweep and produce 10 and 12 MW each.

    Consider what a staged capacity increase with wind turbines (if and when needed after DSM) would have cost at 9 cents kWh vs Muskrat 64!

  6. Back end loading is a rate mitigation scheme which is being left out of the current dialogue and conspicuously missing from the questions being posed to Nalcor by the PUB. This is a mechanism where the province borrows $4 billion and invests it in Muskrat Falls with no immediate return other than a promise in the future to return the investment with a rate of return. Nalcor cannot guarantee a return because Nalcor is bound like the rest of the world by the laws of economics. The can make allowance for a return but the reality is that return on equity is a residual which is paid only if other expenses are paid. The allowed ROE is higher than the cost of debt capital to reflect the added risk. Equity capital is normally more costly to ratepayers than debt capital. Regulators provide for a risk premium to be added to the risk free government of Canada borrowing rate on 30 year bonds when setting the “allowed” rate of return on equity.
    The traditional approach is to apply “cost of service” in recovering costs through rates. This normally covers all costs including the allowed rate of return on equity capital. With Muskrat Falls the cost of service approach is applied to the Labrador Island Link (LIL) but not to generation assets or to the transmission line from Muskrat Falls to Churchill Falls.
    In his post of April 15th PlanetNL draws upon the February 2018 Nalcor update and the new cost projections presented to the PUB. The February 2018 (page 23) update shows the Labrador Island Link comprising 36.6% ($3.7 billion) of overall direct project costs ($10.1 billion) excluding financing ($2.6 billion).
    The 2021 revenue requirements for the LIL (based on “cost of service” rate recovery), using the latest numbers supplied to the PUB for its rate mitigation hearing, are $380 million including financing costs. Applying the 36.6% to calculate the overall revenue requirement produces $1.038 billion as the 2021 revenue requirement. In fact this is a conservative estimate because it assumes that the minimum equity is 25% as required in the federal loan guarantee. When the $1.038 billion is adjusted upward to reflect the minimum of 35% equity for generation assets the revenue requirements far exceed $1 billion.
    The revenue requirements presented to the PUB are $726 million, far below the full cost including the cost to both the ratepayer and the taxpayer. The full costs far exceed $1 billion. The starting point for the election debate on Muskrat Falls is to agree on the right numbers. The numbers being used by the PUB and by the political parties are too low. You cannot have an honest debate without the full truth and nothing but the truth!
    David Vardy

    • Could I compare " back end loading" like the money I invested in "blackberry" a few years ago, and now claim that it is not lost, it is still invested, and I will get it all back and more, when blackberry stocks rebound. A fat chance says Joe blow.

  7. One way to look at spending within our means might look like is go to back to the early 1970s when we had a similar population to today and spent much less. My memory isn't the best, but I remember:

    1) Single lane paved trans Canada highway, scarce passing lanes, gravel shoulders. Only Terra Nova park had paved shoulders.

    2) Most secondary roads were dirt e.g. Springdale to Little Bay. That wasn't paved until Peckford promised to pave every road in Green Bay and actually followed through.

    3) Small cottage hospitals, you went to a city for serious illnesses. Chruches ran hospitals.

    4) Larger classroom sizes, no full day Kindergarten nor grade 12. Basic subjects only, but still a decent education

    5) MUN was small, administration was much smaller, it has an extension service

    6) Churches ran some hospitals, e.g. Salvation Army/Grace Hospital (not sure how the funding worked)

    7) Sewage went directly into the sea

    8) Government regulations were absolutely minimal compared to today. We sprayed oil/water on dirt roads to combat dust.

    Are we willing to unpave seldom used roads and revert to gravel, close schools with single digit enrollment in favor of distance education, increase class size to 30, have people come to a city for non-routine medical services, slash bureaucracy (a good hunk of the middle class), force Memorial University back to the basics (cut admin by 50%), cut funding to every program that isn't absolutely necessary for the operation of society — and then reduce the 15% sales tax to something affordable to the poor … probably not. We are spoiled and will be long dead before our current billions of debt is paid off by our offspring or more likely, the rest of Canada.

    • You describe well the NL that I experienced in 1971. What was it about us that believed that there would always be cod, CPP, transfer payments, and church eternal? Copes and others tried to caution us about "Bountiful futures". We just did not heed. Our children and future generations will damn us to hell.

    • The implications of your piece are horseshit. It is not unreasonable expectations that NL should have first world services. It is old fashioned corruption and short circuiting the checks and balances that leads to your dilemma.

      Owning up to the truth, protecting democratic institutions, calling megalomaniacal narcissistic "leaders" to account for bankrupting your grandchildren's future, is the predicate for finding a viable future.

      The curses of future generations for your lax morals and greed will be well deserved.

  8. A little off topic.

    I have heard reports that recently contractors were attempting to remove one of the service roads used for constructing the Muskrat Falls Dam.

    Apparently they decided to do a number of blasts.

    As a result they cracked the bedrock in the Muskrat Falls powerhouse causing water to flood and FREEZE into the structure itself.

    Tools and machinery were actually frozen in place.

    The icing on the cake was there were workers in the area at the time of the “leak”!

    Apparently they are now trying to repair the damage caused by the blast!

    The comment that was made to me was that if someone doesn’t end up killed on this construction site it will be a miracle!

    Maybe someone here has heard similar stories?

  9. Blasting near the North Spur is also problematic.
    Sounds apocryphal to me but not outside the realm of the eternally stupid.
    David once again tells us truth but still no one has a plan about what to do.

    Vote for us, we promise to save you.


  10. Anon; 11:34… I agree with you totally except you omitted, I guess something you have never heard of, it's called the muskrat boondoggle, that we didn't need and should never have built. We have equity into that of today's money of some 3.5$ billion directly, not to mention the billions of borrowed money. So all those things you mentioned we could have done most with the 3.5 billion, and a few more things with the borrower money . Or I should say much less borrowing than we did for muskrat. Those bloody buggers that did that and convinced the voting public it was all in their best interest. I can still hear the words ringing in my ears now from 10 years ago, "doing what's in the best interest of the people of the province", and not much difference with the govt. of today says average Joe.

    • Some debt data for Newfoundland

      Year, Deficit in millions, Net Debt in millions
      1990-91 -347 3,550
      1991-92 -276 3,918
      1992-93 -261 4,270
      1993-94 -205 6,453
      1994-95 -374 6,831
      1995-96 -190 7,121
      1996-97 -107 7,254
      1997-98 133 7,301
      1998-99 -187 7,851
      1999-00 -269 8,087
      2000-01 -350 8,437
      2001-02 -468 8,932
      2002-03 -644 10,616
      2003-04 -914 11,487
      2004-05 -489 11,888
      2005-06 199 11,684
      2006-07 154 11,558
      2007-08 1,421 10,188
      2008-09 2,350 7,968
      2009-10 -33 8,220
      2010-11 594 8,255
      2011-12 974 7,837
      2012-13 -195 8,348
      2013-14 -389 9,085
      2014-15 -1,006 10,330
      2015-16 -2,206 12,504
      2016-17 -1,148 13,598
      2017-18 -911 14,674

      Muskrat Falls may well be the final straw (a monstrous criminal straw), but we have had a chronic cash flow problem for a long time. Aside from the windfall in 2008, we now have deficits that absolutely dwarf the historical deficits.

    • Yes agree deficits in the last few years that dwarf earlier ones. Guess it includes govt borrowing to invest in nalcor. But if you add the nalcor direct debt (8$ billion FLG) to the provincial debt now, (which we are ultimater responsible for) it should add to around 23$ billion. Now that's the monstrous straw that might break the camels back says June blow.

  11. Superb work by Mr. V.

    Watch out for changes that will increase the cost way above 61 cents.

    First is extra capital cost and delay. Then elasticity drives down local sales. It won't take much to drive MF costs to double or triple that 61 cents. Does the Premier's rate mitigation plan cover these obvious risks?

    • Robert, I fear reason and logic fall on deaf ears here. Discourse is lacking and languishes at best. I pled for a plan since this started but so far nothing burgers are the general rule.

      Cry in the wilderness, I guess.

      We are doomed by our own apathy, inability and ignorance.

      I hope for another decade, unlikely, and am preparing for the enforced poverty we must now face as I slide toward entropy.
      The talk of mitigation is just that, fluff and rhinestones.
      Muskrat Falls has a biblical feel to it, without divine intervention it will go from absurdity to absurdity, lies and promises to lies and promises.

      Try not to panic is my mantra.
      It is getting harder.

    • G'way b'y… it's just a fad, the latest cool trend amongst the well-meaning but ignorant who haven't bothered to inform themselves as to the comparative scale of GHGs emitted globally on a nation-by-nation basis.

      And the Trudeau liberals are taking advantage of that ignorance, by imposing a massive tax-grab on Canadians under the guise of a "carbon tax" as part of some daft crusade against climate change.

      Look… the Trudeau liberals could seize everyone's cars, pickup trucks, propane BBQs, lawnmowers, snowblowers, and all the rest of the gasoline-powered youngster-junk they use to kill time on stressing out the wildlife… and the difference it would make to the overall amount of GHGs that are being pumped into the atmosphere globally would be so infinitesimal as to be immeasureable.

      But of course if Canadians clued in on that little nugget, the Trudeau liberals wouldn't be able to justify their massive tax-grab scheme in the name of "climate change".

      So when these liberal schemers see the un-informed rabble marching in the streets protesting "climate change" and "global warming" and such ilk, they just high-five each in glee at how well they've managed to sell the carbon tax to those poor, misguided suckers.

      Sad but true.

    • Anon @ 18;12
      Are you familiar with the new symbol of who you call the well-meaning but ignorant, and uninformed rabble?
      If you are informed you should know. Recall, Churchill used the fingers to make the V for Victory sign.
      I give you an hint: first step 1, draw a circle, it represents our planet, mother earth.
      There are 2 more steps, but you should get it right away, but others can chime in, if more informed than you are.
      Winston Adams

    • Geographically, Sackville has reason to fear sea level rise. The power grid, bringing all that free electricity from NL to NB, across the Tantramar Marshlands from NS is expected to be underwater. NS then will be another island from the mainland. It is a sign to Canadians of what Climate change is about.

    • You've wasted yet more time posting additional blather from your seemingly endless supply, going on about "mother earth" and "drawing circles" and some such shit, for the sole reason of being contrarian because what was stated doens't agree with your pet sentiments, misguided as they may be.

      Yet you've stated absolutely nothing to counter the facts of the matter as posed by anon 18:12.

      Perhaps you should remain focused on that? Instead of wasting your time dancing around the issue?

    • It is time for governments everywhere to put their money where their mouth is with respect to the war against climate change. In Paris for instance, the home of the Paris accord, they could take the billion or so already pledged to restore an 800+ year old building in Paris and tear it down and put the remainder into GHG emissions reduction efforts. We could also go back to the 90's and start reusing CFC's to open up a hole in the ozone layer in order to cool the planet down.

    • The commentary from anon 12:10 that conflates CFC-induced atmospheric ozone depletion with the atmospheric "greenhouse effect" and consequent global warming resulting from increased GHGs emissions… two entirely unrelated phenomenon that pose two entirely different risks to the planet… is a perfect example of those well-meaning but lamentably ignorant as to the scientific facts of the issues.

      And the Trudeau liberals are only all to eager to take full advantage of that ignorance so as to impose a tax-grab on Canadians under the guise of addressing climate change.

      Like P.T Barnum said… "There's a sucker born every minute."

    • Anon @ 11;44, what facts did anon at 18;12 state…….it was empty of facts.
      As to the "shit" of drawing circles:
      Step 1: draw the circle, this the planet Earth, mother earth.
      Step 2: put a big X in the circle. This for destruction of the planet from climate change, as we are now into the 6 th Great Extinction on this planet. Is this a fact you dispute?
      You are ignorant of this symbol, so you may have trouble, anon arriving at Step 3? Maybe if I offer you a prise , your ignorance might disappear?

    • Anon @ 13;28
      You are obvious out of touch….so….
      Step 3: After you do the circle and the big X, now just draw a straight line across both the top and bottom of the X, and what do you see?
      If you have imagination you will see it right away, if not, when explained, then you will say Oh yes, I see what you mean, it can be symbolic, but you will very like say it is still only bullshit, and there is no factual basis connecting the symbolic, because you have extreme biases from your ignorance.
      So, to save time, I will explain what step 3 brings to it. You, or most people will it shows an hour glass, as to the destruction of the planet from climate change.
      The symbol is most clever, is it not? Anyone who is not ignorant of the science, must agree the symbol is very clever.

    • Anon 13:28 and some others, what is your solution to bad Energy Policy, Planning and Governance? One dare not lie down to the cause. As young Bruneau said, we all have a civic if not professional duty to our Society.

    • The IPCC puts current global GHG emissions at about 54 giga-tonnes, and there's no signs of emissions peaking in the near future.

      Meanwhile The Trudeau liberals project that their "carbon tax" will reduce Canadian GHG emissions by 50 to 60 million tonnes after a few years.

      So that reduction will make a difference of about one tenth of one percent in total global GHG emissions. Or even less because global emissions are predicted to continue increasing.


      And this is what the Trudeau liberals are justifying their "carbon tax" on all Canadians upon?

      This is obviously nothing more than a crafty tax-grab on a bunch of suckers who won't bother to inform themselves as to how badly they're getting royally stiffed by their government, but whom nonetheless will feel less guilty about taking the SUV to make a quick run to the convenience store rather than using the bicycle because the "carbon tax" they're paying will make themselves feel good about "helping the environment".

      So like I said… nothing but a bunch of ill-infomed, misguided suckers.

    • So, the carbon tax, by your reasoning at present levels is insufficient, and needs to be increased.
      So the X is for destruction,and the hour glass is the time frame, 11 years to 2030 for substantial reductions or it is game over, due to feedback effects.

      That is the what science and Extinction Rebellion is telling us. Since Monday, now 700 arrested in London, where they have held 4 sites, including the Waterloo Bridge, they call it the Battle of Waterloo. Police are much in sympathy with the protesters, from young people to senior citizens. Their symbol, a flag, as I described.
      1/10th of 1 percent: of 8 billion provincial budget, this would be about 8 million, : and about what they have for green projects, which is nothing, yet Canadain/Nfld carbon footprint among the BIGGEST in the world per person. So at present we trend at no world wide reduction. So most of the world population who have no SUVs, you deny them SUVs, and those that have small cars, you deny them SUVs, and use bikes only?
      You deny the problem of climate change, or acknowledge the problem but have a better solution, or want no solution?

    • For you to assume that, by my reasoning, the carbon tax "at present levels is insufficient, and needs to be increased" indicates that you're either incapable of comprehending my point, or else you are irrationally contrarian to the degree that you refuse to comprehend it.

      Just the kind of misguided sucker the Trudeau liberals are counting on to buy into their crafty "carbon tax" scheme.

    • What is your point,that you are entitled to pollute more than others, you do not like the carbon tax, but do you deny the problem or have a solution, you seem hung up on political stripes.
      I just assess the science and possible solutions. You address neither of that, just Trudeau bashing, which is ok, but what is your better solution?

    • Just terrible if I am lost, having seen it is foggy and wet all day in the east end, so stayed indoors.
      Not that a little fog would have caused a problem. But if you are right ,then I did not inherit my old man's genes, as he was a Master Mariner, never once got lost, and didn't need Google, just a compass ,sun and stars, and off to Spain or Jamacia, or Hudson Bay.
      But maybe you are lost, ol' buddy? You did not deny the problem, but offered not one solution better than the carbon tax, so you seem to be lost?
      The tax is like Vardy's position on electricity and elasticity, if you make it more expensive to use, then demand goes down. So if you tax fuel you tax carbon. The scheme seems sound, or you still lost?
      Now an additional way is to divest of fossil fuel shares. Investors of pension plans, charitable organizations etcto divest. From Bill Gates to Rockfellers are doing this, and putting the coal industry out of business and oil and gas taking a hit. So, if those fellas are lost, I'll stay with them, given the chance, they being no dummies.
      Then too, mandate that all buildings reduce energy use by 40 %, so just take NY city as an example, 75,000 large buildings, to upgrade, and it will be a decade of lots of work.
      Now too, there is moral grounds, as the Pope says, as we all breathe the same air, and have to protect the environment which all humanity share. Now, I expect you may opt for the moral ground as best, as to love your neighbour as yourself, and so that some poor bugger in India, that he can use a little fossil fuel, you will use less. Do i judge right, anon? And this being Easter week, this moral issue is probably high on your mind.
      So these are but few options besides the carbon tax.
      And of course, more renewable energy is a replacement for fossil fuels, and even Bruno is big on that idea, a bit way out there on Bruno batteries and the like. But as the mosquito said when he spit into the ocean, every little bit helps.
      So, if you were lost, now you might see the light, that there are many ways to kill a cat, as they say. Any of these suit your fancy?

    • So anon, you stayed up late, to read my suggestions, and agreed with them all. If I got bent out of shape, it was well worth it. And you and I are now, not just buddies, but good buddies.
      Yet you seem to just go with the flow, with whatever I say.
      Now the carbon tax, it should be revenue neutral, so that whatever you pay on that, comes back as a tax credit for your green initiatives : more insulation in your attic, insulate your basement, buy an EV (now that Ball has announced charging stations to be built), etc, and as they ramp up the carbon tax, so too the tax credit should increase, but Ball seems not on that track. So you may still dislike Trudeau, as too I am not overly fond of him, but you can grow to love the carbon tax, as 70% of people do in BC.
      So, on this Easter Sunday, you have been fully converted, have you not? Now you can inspire others. Press the government here too for carbon tax rebates, so you get it both federal and provincial.
      What is your line of work anon? Does it affect your outlook on carbon taxes?
      But I trust you fully accept the science of climate change, that was not your problem?
      Take care good buddy. It took 150 years to create this mess, and now 10 years or less to solve it, to get over the hump say. I have doubts it can be done in time. Are you optimistic? Share your thoughts.

    • Dictionary
      verb: blather; 3rd person present: blathers; past tense: blathered; past participle: blathered; gerund or present participle: blathering

      talk long-windedly without making very much sense.
      "she began blathering on about spirituality and life after death"
      synonyms: prattle, babble, chatter, twitter, prate, gabble, jabber, go on, run on, rattle on/away, yap, jibber-jabber, patter, blether, blither, maunder, ramble, drivel; informalyak, yackety-yak, yabber, yatter;
      informalwitter, rabbit, chunter, natter, waffle;
      archaictwaddle, clack, twattle
      "he just blathered on and on"

      noun: blather

      long-winded talk with no real substance.
      synonyms: prattle, chatter, twitter, babble, talk, prating, gabble, jabber, blether, rambling; More

    • And anon, you called me a good buddy. Said all my suggestions sounded good to you. Now, I only blather, with nothing of substance you say, so you are dishonest. Goggle truth and honesty, and report back. I begin to think you operate a gas station, or a car salesman, or work for the oil industry?

    • You admit I may be right, that you were dishonest, and may have a vested interest in promoting fossil fuel use.
      Okay, you don't explicitly say I am right, but likely I am.
      I too have relatives employed in the oil industry, it pays well.
      No hard feeling, anon. Hope my comment below on Norway dumping oil company stock was not blather too.

    • Seeing your keen interest, good buddy: On Thursday New York City passed legislation: 50,000 buildings to cut emissions by 40% by 2030, including Trump Tower, as they account for 67% of emissions. Plan is to slash emissions by 80% by 2050.
      Fail to comply will see a fine of 268.00 per every excess ton of carbon.
      Do you want the link to that story?
      Now imagine the work for trademen to happen there. So another way to kill the cat.
      Is this better than Trudeau's tax grab carbon tax, do you think? If so, should St John's do likewise?

    • It was my last word on NY, but I have learned a bit more.
      NY has 1 million buildings, but this 50,000 is the large ones for 30% of total space,and this part now to cost 20 billion, and another 10 billion to build a wall 6 ft high to keep water out of the city, but this not passed yet. Work for Nflders there maybe , like in the 1930s.
      But as to what passed, it was a vote of like 42 to 2, or near that, so intending to set a trend for other cities. Not a close vote at all. So maybe you should consider the green technology business? But worldwide, this needs to happen, and rather difficult to turn the tide. Hope I do not bore you, but we seem way behind the times here as to climate change mitigtion, as they can't even mitigate the power rates, but tell lies, so 12.5 cent one day, 13.5 another day, then 17 cents or 23 cents.
      Take care good buddy. I know , I blather on, but good thing you and I care about this, and you keep encouraging me, and I practise my typing.

  12. Comments on Vardy's piece:
    1. Marshall the Straight Shooter? Seems Stan is using PR strategy and creative accounting to downplay the boondoggle. Agreed.
    2. Net profit form Recall power only 23 million, they promote the higher gross profit. 23 million net is very small.
    3. Stan prefers to use the 17.42 cents as the cost of power to Soldiers Pond, but that required full energy output from MFs, Stan's own forecasts is for only 1324 GWh being used, so that means 61 cents for MFs power. This a result of going with a project way bigger than needed, and even MHI suggested incremental moderate supply additions is best practise. This 61 cent power is the result of that over capacity, we needing only 28.5 % of that or less.
    As cost of MFs power is all over the place, Vardy clarifies it is tied to the amount of power used.
    4. If demand for Labrador power is even less (ELASTICITY EFFECT), which i likely, that 61 cent costs go higher still.
    5. Cost of island power is now 8 cent. This includes Holyrood at 15 cent costs. Allowing for Holyrood at 25 % of our energy, this suggests our island legacy hydro costs 5 cent/kwh, if my arithmetic is correct. As this included the many additions since Bay de Espoir, our island island hydro is an average of some less than 3 cents and some more than 5 cents for 5 cent average.
    If distribution is 60%, about 3 cents, allowing for NP costs, then if we had no need for Holyrood , our retail rates would be about 8 cents, just slightly more than HQ. Hence: the crime of incurring 61 cent power to displace 15 cent power from Holyrood, when other alternatives could have kept power costs stable to residents
    6. Transmission is about 36% of MFs total cost, a very high number.
    As a comparison, Texas spent 7 billion for transmission upgrades for wind energy tranfer from west to east Texas, I seem to to recall that Texan may have 20-25,000 MW of wind energy?, and if operating at 30% capacity, might suggest MFs tranmission is about 15 times more expensive, and about twice the distance, so MFs transmission about 7 times more expensive, if equal distance. This partly a result it seems of assuming low average power transmitted over the DC line. This an estimate by me, if others might comment and correct any error.
    As in Texas, distance transmission of power can be profitable, with MFs being a "worst cost" case not "least cost".

    • One very important thing, confirmed by the Muskrat Inquiry; This is a monstrous fail by those accountable for energy planning the power network, and energy supply. Even more of concern, there is no consensus on who and what process will do any better in the next 50 year planning period. Shame.

    • WA @ 12:36:

      A few comments:
      1)I watched the media interviews several times to try and understand this train of thought – not sure I agree with this assessment. It was never said that MF was a good idea for NL or executed properly – just that the final cost is about where it should have been originally estimated to be, and that if the PMT/Nalcor were upfront in 2010 that there wouldn’t have been any surprises by the $12.7b (that is if MF was sanctioned with a $10b estimate at all). Personally, I think a much better statement is either breaking the $12.7b into $550/person for 57yrs for every one of 500k people in NL, or break out the $800m annual cost in the same fashion – breaking it down by an optimistic generation target is total B$ anyway, especially since most wont dig into the number.
      2) accepting that operations is about $110m and regained revenues are at $60m – this suggests my offering of idling the plant and sourcing power elsewhere might be a viable option (see #6 below). No matter – default was never an option.
      3) A very poor measurement basis was implemented in 2011, not much can be done now to change this – I will agree with SM on this, blame goes to EM/DW et all to try and put lipstick on the pig. More or less, this was a way to taking advantage of an ill-informed public in the popularity contest.
      4) power in Labrador is a tricky issue – current grid rates are at ~3 cents/kWhr and being remote means isolated generation is often most practical (see MHA on south coast wanting a convertor station or understanding why Cartwright isn’t connected – this goes to my issue with the route, for both connectability and maintenance. A couple examples are: would Voisey’s want to connect to HVGB or just develop Mistastin as GG suggested; likewise with mines near Schefferville/Menihek connecting to the grid (though this might happen)?
      5) agreed, though I wont bother to verify your numbers and will accept your calcs
      6) much too high – maybe the other 64% might be a reason to source power from UC to service the NS bloc (I mentioned this a while back as being potentially politically unpopular)

      No doubt effective transmission can be done – just not by a bunch of O/G guys, transmission is closer to road/rail building than sitting on a self-contained site with minimal logistical issues.

      A piece of info I would like to see in a detailed report is the ‘elasticity characteristics’ of the NL population – by this I mean how the incoming increases will affect differing economic classes of the population. For example, we know the cost of power ranges for 7-17 cents/kWhr across Canada with an average of 13 cents/kWhr – but how does the economic means of the public affect going to other sources or taking on mitigation means (ie both ability to pay for higher priced electricity and the ability to take on the costs of other means such as heat pumps)?

      I should have something to offer on Synapse this week.


    • A comment on your last point: Ed Martin said Nflders were not interested on conservation, so to dismiss CDM.
      A report from Ireland as to customer attitudes for conservation , energy savings, efficiency improvements etc, especially as to heating. I noticed that NP reports that maybe 90% of customers want EE to save money, but may not be concerend as to GHG or the environment etc. If I recall correctly,Nfld seemed about 4 times higher than residents in Ireland in wanting to save money with energy saving via conservation plans. (Past and present plans actually gave few opportunities here)
      This 90% desire may have to do with our very high winter electricity bills vs their warmer winters, I assume,in Ireland.
      This to me suggest a high elasticity effect to be seen if rates here spike. Rural Nfld was seeing more uptake in wood as the main source in 2011, before MFs sanction.
      The Avalon has less opportunity for wood burning, but now HPs are more cost effective than wood, if you have to buy wood..
      A minisplit at 4000.00 seems high, unless you assess the payback.
      A month ago, a 85 year gent at Spoon Cove, Sharpe, I chatted with. He was bringing wood across the road for his stove. He knew about minisplits. I said they are expensive, around 4000. He says "Not too bad though, and my son has them installed" He laughed at the goings on about rate mitigation. I was surprised thinking that he would see 4000 as much too high. But those on social services could not afford it, at they lack credit, and NP rates of interest of about 5.5 % chew up much of the savings.
      A 17 cent power rate, with 35% reduced annual energy use, is equal to 11 cent power rate.
      Marginal Cost Report assumes 17 cent rates. At that rate, with significant CDM for heating would equal to 11 cent rates, it reduces the winter peak load, frees up energy for electricification, assists ability for export, and does not add to yearly power bills,and reduces GHS.
      So I see Synapse, Marginal Cost, Nfld Hydro's suggestions etc needing to look carefully at CDM, as well as supply options, wind, , other……as they may get it wrong for a second time.
      The concept of 17 cent power equal to 11 power,as to yearly bills, …….has any politician ever consider this? Certainly power companies don't promote that, anything on HPs they discourage more than encourage. It is in their DNA; shareholder profit first, customer a low priority, and keep them uninformed.

    • WA @ 14:57:

      Not exactly what I was getting at when I coined 'elasticity characteristics', though interesting. What I was getting at was that I broke the population into a few groups that will be affected differently by electricity rate changes:
      1) well off persons that don't care about how high power rates go
      2) persons that use other heat sources such that increased power rates will be noticed, but not crippling since lights are a minor part of NP bill (your friend burning wood for example)
      3) low-mid income persons that will be greatly affected, but are not able financially to cope with switching to a mitigation measure
      4) non-home owners whose rental rates will be affected either because heat is included in rental rates or market pressures (either social assistance or self funded)

      5) did I forget a group you cant think of???

      Anyway, to your last questions – politicians never thought about it, probably because they never bothered to take notes ( in academia listening to a lecture vs writing notes is well demonstrated to show a difference in learning/absorption of material, especially if the listener is spending time on iPhone texting about supper an not affected by material).


    • Yes, different groups make different choices, so all a jumble as to the overall result.
      Yet the NP survey shows most all want savings if cost effective EE can achieve it, while some cannot afford to do it.
      I think most on electric heat will do it, and those that cannt afford it will get govn assistance to do it, or heating assistance.
      Elasticity factor has been about 0.2 with stable rate structures in the past. Vardy sas may go to 0.5, Feehan say maybe 0.4.
      A few years ago my research for jurisdictions with heavy baseboard heat, and with gas alterantives, showed a factor of 0.65 to 1.0, if I recall correctly, and I believe the Marginal Cost study mentions a factor of 5.o when rates go very high ( I assume this how Texas controls thier summer peak when over 100F, and rates go to 4.00, maybe people even unplug their fridges, certainly turn down or turn off AC loads.
      Now here already Bishop Field school 4 million structural retrofit, includes electric boiler to replace oil, but no energy upgrades at all. Who decides that, the school board?
      I read that gas turbines at about 305 efficiency is only 25 % when using diesel. So in winter when using that at 25 % eff, and HPs at 250% eff, that is 1/10th the efficiency, and adding load when already we are at very high peaks in winter. Seems crazy, moving in the wrong direction once more. And to do the same at MUN and other schools, forcing the need for more backup generation capacity. And I see no plan to reign in the peak demand for very large houses. Where is the oversight for this type of decision. It can make sense for the school board , but not for our power system overall, as Robert says there is no overall energy plan.
      Is this what gets determined at technical conferences,by 3 or 4 people, and the public excluded, which suggests political rather than technical?
      So a guessing game what the elasticity factor will be, with no coordination of a plan or goals or targets to achieve, and little interest by the public, same as for MFs.
      Anyone have numbers for Nfld for energy use for the island the last couple of years? Vision 2041 list them, but now a couple of years not up to date.

    • At 13.5 cents, some who can afford mini-split HPs will install this year and next year. But I suspect the 13.5 cents is just until 2021 and gradually creep up regardless of who wins the election. So above 15 cents kWh is in our near future, as no one has figured out a long term plan. So more and more home owners will switch to HPs, even some who can't afford it but will take that route as the lesser of two evils. But then you will have renters, subsidies housing, and those who just can't afford a heat pump will be left holding the bag. The rich and middle class will have switched but the poor will be left to freeze in the dark, as NP will cut off or threaten to cut off those who are dilinqulient or behind in their hydro payments. So govt. having a social concious will have to provide rebates to the poorest of our society. Govt. and tax payers will pay one way or the other as rates rise says Joe blow.

  13. More on Vardy:
    That Nalcor does not admit that rates higher than 12.6 cents may produce little or no added revenue, as to elasticity effect, that past estimates are of doubtful value.
    Elasticity is much dependent on cost effective alternatives available to heating, and there are several. In particular minisplits now last year about 10,000 installed. This allows heating at a cost almost equal to natural gas, so elasticity will drive consumption down the load about 20 MW per year or more, except where govn tried to keep demand up by schools etc converting to baseboard heat, or electric boiler. However this is counterproductive to EV electricification, needing to reduce winter peak heating load, per Synapse analysis.
    Yes solar and wind is very cheap for large utility scale, wind 4 cents or lower, and cheap solar in some locations, deterring exports, except for HQ, whose their surplus hydro costs is low.
    Vardy says the truth must be told about MFs during the pre-election debate…..
    Truth is largely in the numbers, arithmetic properly done and applied as Mr Vardy has done, don't lie or mislead.
    Good work. Must be time consuming, and much appreciated.
    Vardy, the Straight Shooter, Stan the man, lost that title. Would PENG2 agree?
    Minutia? Is that what Stan said about elasticity effect? With cost effective alternatives: price goes up, volume of sales goes down. What's hard to understand about that, that Stan couldn't see?
    Electricification may help sales but if not dome right can add to backup supply added costs.
    We have: Synapse Report, Marginal Cost report, Nfld Hydro supply alternatives options(and omissions), PUB assessment of all this for recommendations, and little comment yet on UG . PENG2 not read them yet. And MFCCC excluded from party status at the PUB, and all excluded from technical sessions, the secret sessions.
    Do I recall correctly that at the Inquiry even engineer Fred Martin, was not party to technical sessions, but Fred is very technical…..go figure!
    Winston Adams

  14. UG readers may be interested:
    The Ball govn McKinsey Report advised to invest in offshore oil development did they not?
    In Norway, the same company (McKinsey & Company did a report for the Norwegian Ministry of Finance, as they have a 1 trillion oil heritage fund to manage, and make various investments, and as to risks for investments.
    So they wanted to assess the regulation of the environment-related investment mandates and the possibilities for investing in unlisted RENEWABLE energy infrastructure and as to risks and return requirements, and so engaged McKinsey & Companyto produce a report on global market for unlisted renewable energy infrastructure. , including solar, wind and hydro power, this being an update from a prior 2016 report.The report was to be descriptive rather than advisory, and to include interviews with experts on renewable energy technologies.
    Result to follow

    • Findings : the global renewable energy infrastructure is to grow 50 , from 2.9 trillion to 4.2 trillion US by 2030.
      Decreasing costs for solar and wind power., record capacity additions, capacity expected to grow 150% , from 2100 to 4800 GW by 2030.
      Today most is hydro , 60% , the rest in solar and wind (part from incentives), expecting to catch up with hydro.
      As to investing, only 20% available in hydro as most in govn owned, with limited new capacity
      Renewables is attractive for institutional investors.
      Risk levels are higher for hydro than for solar and wind, but varies from project to project.
      Hydro power has higher reputational risk, environmental impacts, and safety risks during construction
      Shifts in technology for renewables will change the overall landscape.
      Growth is expected for lower risk technology : included solar and wind power
      Institutional investors are focusing on the lower end of the risk spectrum for operating solar and wind power assets.

    • That report was Dec 19, 2018.
      Mar 8, Norway Wealth Fund of 1 trillion value, announced it would sell stakes in 134 companies, many of them oil firms to reduce their exposure to risk of falling oil prices, and so to sell in companies that explore and produce oil and gas, so a partial divestment, of 8 billion dollars.

      On April 5 it was announced that Norways giant oil fund dives into renewables: billions into wind and solar. Norway's govn gave permission .
      This followed Saudi Arabia selling some of its oil and gas assets.

      I suggest this move in not yet a "deep dive", but an important shift is risk assessment, and no doubt a result of input from McKinsey.
      Winston Adams

    • So, is there a disconnect: McKinsey leads Norway to part divest in oil/gas in favour of renewables. Here MCKinsey recommends invest in offshore oil and gas and ignores especially our very favourable wind resource, and wind especially a good investment suggested by McKinsey to Norway.
      Is McKinsey like other Nalcor consultants to tailor recommendations to your desire?
      Is not wind back on the table, so should be, given the unreliability of MFs, and backup needed for the Avalon, and minimum fuel use? Bruno says tear up GT plans, I would not, but explore to consider significant more wind.