THE ELEPHANT IN THE ROOM

Guest Post by David Vardy
The
province’s deteriorating fiscal position has been linked with Muskrat Falls but
yet it has received scant attention. Virtually absent from the Muskrat Falls
Inquiry (MFI), and from the PUB reference Inquiry into Rate Mitigation options,
is the fiscal impact of the project. It remains the elephant in the room, in
plain view but virtually ignored by both inquiries.  Yet it is the major public policy issue
facing the province.

The
PUB reference Inquiry is focused on the means whereby revenues can be generated
to pay the increased revenue requirements to operate our electrical power
system, rather than on the fiscal impact. In its work the PUB has been directed
to examine measures to reduce the cost of providing electrical power as well as
to identify new sources of revenues.  The
fiscal impact of the project remains outside of the scope of the PUB. All of
this suggests we must look to the MFI for an assessment of fiscal impact.


Do
the terms of reference for the MFI include the fiscal impact? Section 5 (e) of
the terms of reference includes the following language, which I take as an
affirmative answer:

5.
The commission of inquiry, in carrying out the terms of reference referred to
in section 4 shall consider: e) The need to balance the interests of ratepayers
and the interests of taxpayers in carrying out a large-scale publicly funded
project.

The
underlining I have supplied below, in combination with section 5(e), suggests
that the Commissioner intended to include fiscal impact as well as the
“business case” for the project when he wrote his interpretation of the terms
of reference:

[29]
Generally speaking, it is clear to me that the Order in Council, and
specifically section 4, is geared to focus the Commission’s work and mandate,
primarily at the least, on the business case put forward by Nalcor leading to
the official sanction of the Muskrat Falls Project by Government in December
2012 as well as the reasons why the costs of construction of the Project have
escalated from the initial estimates made. By business case, I mean
specifically the case advanced by Nalcor, and accepted by the Government, for
the need, financial viability, costs and benefits of the Muskrat Falls Project.
Really what is primarily being asked of the Commission is to explain what was
done by Nalcor and the Government of Newfoundland and Labrador to cause the
Muskrat Falls Project to be sanctioned, whether the analysis done by Nalcor and
the Government was reasonable considering best industry practice and why the
Project cost has escalated so significantly.

[32]
All of what I have stated above leads me to conclude that the Government’s
focus in drafting and approving the Terms of Reference found in the Order in
Council is very much based upon the Project’s viability, risks, costs and
benefits and the consideration of these by Nalcor and the Government at the
time of sanction and thereafter.

The
terms of the federal loan guarantee provide an understanding of the obligations
accepted by the Government of Canada and identify the commitments imposed on
the province. Much was made of the benefits of the loan guarantee, which
reduces our borrowing costs and improves the business case for the project. The
loan guarantee was intended to provide access to borrowed funds at the lowest
possible cost. The federal government guarantee de-risked the investment from
the lender’s standpoint, making it possible to raise $5 billion in debt at a
lower interest rate than would be available to the province or to Nalcor Energy
on its own. This was subsequently raised to $7.9 billion in March of 2017.

In
return, the province gave undertakings to the federal government, in the loan
guarantee agreements and in the power purchase agreement between NL Hydro and
the Muskrat Falls Corporation (MFC). The undertakings made by GNL can be
grouped into two categories. The first category includes those measures that
apply during the construction of the project, a period spanning the eight years
from sanction on December 17, 2012 to late 2020 when the project is scheduled
for completion. The second category deals with undertakings after the project
is completed and extending over the 50 year period from 2020 to 2070. 

Little
attention has been focused upon the 50 year operational undertakings. Most of
the discussion has centered instead on the eight year construction phase. The
obligations imposed upon the province during the operational phase are very
demanding, no less demanding than those during the construction phase.

During
the construction phase the project injected economic stimulus, albeit at a very
high cost for each short term job it created. After construction is finished
the project will attempt to recover these construction costs along with the
cost of operation and maintenance as well as extraordinary and emergency
repairs. The largest costs relate to interest on debt, repayment of principal,
dividends and repayment of equity investment, and depreciation. The total
revenue requirements in 2021 amount to $725.9 million, rising to $2.5 billion
in 2069.

The
province was required to provide a “completion guarantee”, which meant that
regardless of how high the costs went the province would provide equity financing
and guarantee that the project will be finished. The project cost at sanction
(December 17, 2012) was estimated at $7.4 billion, including $1.2 billion in
financing costs.

Emera
invested $500 million in the Labrador Island Link (LIL) and the federal government
guaranteed $5 billion, leaving $1.9 billion to be invested by the province. The
$1.9 billion from the province was to be the “base equity”. The latest
estimates from Nalcor Energy show that the province’s equity is now $3,739
million, almost double the $1.9 billion estimated in 2012, while Emera’s equity
is $865 million, up from $500 million in 2012 (see Table below, from Nalcor’s
response to my ATIPPA request). Federally guaranteed debt has increased from $5
billion to $7.9 billion. (Note that savings in financial costs appear from the
table below  to have contributed to a
reduction in Nalcor’s estimated cost, reducing it below the official $12.7
billion estimate which has remained unchanged since 2017). 

The
province’s undertaking is to keep its equity investment in place until earnings
allow equity to be returned to the shareholder. Essentially this means that the
“construction undertaking” remains in place for 58 years and not just for the
eight year construction period.

The
operational undertakings call for the province to ensure that NL Hydro receives
sufficient revenues to meet all of its obligations to MFC. This is all set out
in the loan guarantee agreement and in the power purchase agreement. Schedule A
of the loan guarantee agreement calls for GNL to

Ensure
that, upon MF achieving in-service, the regulated rates for Newfoundland and
Labrador Hydro (”NLH”) will allow it to collect sufficient revenue in each
year to enable NLH to recover those amounts incurred for the purchase and
delivery of energy from MF, including those costs incurred by NLH pursuant to
any applicable power purchase agreement (“PPA”) between NLH and the
relevant Nalcor subsidiary or entity controlled by Nalcor that will provide for
a recovery of costs over the term of the PPA and relate to:

a)
initial and sustaining capital costs and related financing costs (on both debt
and equity), including all debt service costs and a defined internal rate of
return on equity over the term of the PPA;

b)
operating and maintenance costs, including those costs associated with
transmission service for delivery of MF power over the LTA.

Similar
language is found in the power purchase agreement, confirming that NL Hydro
must recover all costs, including those relating to debt and equity. This means
that the province is guaranteeing that the federal government will not be
required to meet its guarantee unless NL Hydro defaults. In practical terms the
default of NL Hydro would be tantamount to default by GNL. It also means that
the province is guaranteeing that Emera will receive its full 8.5% return on
equity.

The
latest Nalcor estimate of the 2021 revenue requirement for Muskrat Falls is
$725.9 million, as disclosed in Table 1 of the response to my ATIPPA request.
This includes $70 million as return on Emera’s equity in the LIL as disclosed
in Nalcor’s response to my ATIPPA request.  

The
Muskrat Falls Concerned Citizens’ Coalition (MFCCC) has raised questions with
various witnesses at the Muskrat Falls Inquiry to get a better understanding of
the province’s financial exposure. In particular, questions were put to former
and present officials of the Department of Finance. We expected that government
officials would offer a clear analysis of the numerous legal agreements
underlying Muskrat Falls and the financial obligations to which the province is
exposed. The answers were not particularly edifying but they did suggest that
government’s understanding of its obligations is revealed in its rate
mitigation plan.

On
April 25, 2019, GNL issued a
press release on rate mitigation,
which contains the following statement:

Today,
the Honourable Dwight Ball, Premier of Newfoundland and Labrador, was joined by
the Honourable Siobhan Coady, Minister of Natural Resources, to release
“Protecting You from the Cost Impacts of Muskrat Falls.” It is designed to
protect residents from increases to electricity rates and taxes resulting from
the Muskrat Falls project that would affect the cost of living…


To
manage electricity rates, approximately $725.9 million is expected to be
required to

address
Muskrat Falls costs in the first full year of electricity generation.

This
$725.9 million is Nalcor’s estimate of the revenue requirements for Muskrat
Falls in 2021. It is the very same number provided to me by Nalcor in response
to my ATIPPA request of July 3, 2019

It
includes $70 million in dividends for Emera. This informs us that GNL believes
it has an obligation to ensure that Emera receives its assigned rate of return
linked with that allowed by the PUB to Newfoundland Power (NP). NP is not
“guaranteed” a rate of return. They are allowed to earn this ROE but it is not
guaranteed. However Emera appears to be “guaranteed” a rate of return. How else
can this be interpreted?

Also
included in the 2021 revenue requirements of $725.9 million is a return on the
province’s equity investment in the LIL of $645 million, which amounts to $55
million. Not included in the 2021 revenue requirements is any allowance for the
$3.1 billion invested as equity by the province in generation assets and in the
transmission line between Muskrat Falls and Churchill Falls. Based on the 8.4%
“assigned IRR” in the power purchase agreement the dividends would be $260
million. If instead we use the province’s weighted cost of debt, estimated at
4.6%, the cost of borrowing this $3.1 billion would be $143 million.

The
reason no cost of capital is ascribed to the borrowed $3.1 billion is because
the province expects to receive future dividends and future return of equity
capital in the future. This deferral of dividends reflects the hybrid of “cost
of service” and “escalating supply prices” used in recovering costs through
power rates.

How
does the province record these future dividends? Are they considered financial
assets in the accounts of the province? To answer this question we need an
assessment of the fiscal impact of Muskrat Falls over the full 58 year period.

To
be quite candid I have always viewed these “dividends” as highly speculative.
The escalation of project costs from $6.2 billion at Decision Gate 2 to $12.7
billion today renders the prospect of GNL receiving these dividends in the
future to be unlikely.

The
fiscal obligations of the province during the “operational” 50 year phase of
Muskrat Falls are staggering and remain to be assessed.  Some of the obligations will be offset by
fuel savings and by export sales. Some will be offset through increased
electrification of the economy, such as the conversion from fossil fuels to electric
power use in transportation. Very little if any revenue will come from higher
rates simply because of demand elasticity and ratepayer resistance to higher
rates.

The
worst case scenario can be inferred from a report prepared for the PUB during its
inquiry into “cost of service” issues and released in response to a request for
information from Industrial Customers. It can be found in attachment 1 toIC-NLH-17 on the PUB webpage. It tells us that revenue requirements for which NL Hydro is
responsible under the power purchase agreement is $74.6 billion in nominal
dollars.

If
Muskrat Falls Corporation (MFC) bills NL Hydro for revenue requirements which
exceed its ability to pay then does that place Hydro in a default situation?
Does this lead to the seizure of Hydro’s assets as was suggested during his
summation by Coalition Counsel Geoff Budden?

Commissioner
LeBlanc, in the following exchange with NP counsel Liam O’Brian on August 15,
2019, the final day for summations from the parties to the Inquiry, asked this
question:

THE
COMMISSIONER: – the Concerned Citizens Coalition raised an issue earlier this
week with regard to a situation that would arise if, for instance, Newfoundland
Hydro was, as a result of customers not taking the power, not – and reducing
their demand, a situation would arise where Newfoundland Power could not
actually obtain the funds necessary from the ratepayers to actually meet the
financial commitments under the financing

And
the question that was posed and with no answer – no certain answer – but one
that I think we talked about at the time – I talked about with Mr. Budden is
what then happens? Who has recourse against whom? Are, for instance,
Newfoundland Hydro’s assets in jeopardy? Is the government, ultimately, the
party who has to pay? Do you have any thoughts, or does Newfoundland Power have
any thoughts, on what would happen in that situation?

MR.
L. O’BRIEN: In the event, I guess, if the question is in the event that
Newfoundland and Labrador Hydro is not able to provide sufficient power to
Newfoundland – or sorry – Newfoundland Power is unable to collect sufficient
funds to pay for those – pay for that pay – I would assume – or pay for the
power – I would assume it’s the Power Agreements that would kick in and that
Hydro would be the one that’s – and taxpayers would be the ones that would be
holding the burden.

O’Brien
refers to a “death spiral”:

And
you’ve heard that consumer – you heard some evidence that consumer consumption
has been on a decline since 2015, and that’s without Muskrat Falls’ costs being
built into rates. And you’ve heard some evidence in terms of the dynamics of
pricing and price elasticity and that it’s hard to predict, but I think it’s
reasonable to assume that this decline would intensify in the face of doubling
rates. A sharp decline could even have the effect of increasing rates further.
And we heard some evidence concerning the utility death spiral, that sort of
thing – whether or not that’s a – will occur, that – there’s some evidence on
that. But the


THE COMMISSIONER: So, again, it’s sort of like a bit of a predicament.

MR.
L. O’BRIEN: It is sort of a predicament. When rates rise, consumption drops. As
consumption drops, in order to cover the cost of providing electricity, rates
has to – rates have to further rise. So it’s kind of a cyclical conundrum
there.

Former
Premier Tom Marshall told us that there was to be no recourse to the province
or to assets not pledged as security to the federal government.  What happens if Hydro cannot meet its payment
obligations? Will Hydro’s assets be taken, despite the fact that they have not
been pledged as security to the federal government under the loan
guarantee?  Or will the province step in
and meet the payment obligations, thereby inserting the taxpayer to assume the
obligations that had been imposed on the ratepayer?

The
Coalition did not get a clear answer to these questions from the Finance
officials who testified at the Inquiry. We are left to infer the answer from
government’s rate mitigation plan. The answer is that government believes it
must meet the financial obligations over 50 years, beginning with $725.9
million in 2021, and increasing to $2.5 billion in 1970, including dividends to
Emera. The worst case scenario is $74.6 billion in provincial exposure, from
2021 to 2070.

Conclusion
We
are left to ponder whether the federal government guaranteed Muskrat Falls or
did the province provide the ultimate guarantee? During the construction phase
the province was called upon for its completion guarantee, which raised our
equity exposure from the initial $1.9 billion to $3.8 billion. If the federal
government had baulked on the second loan guarantee the province’s exposure
would have been $2.9 billion higher, or $6.7 billion, more than the DG2 cost
estimate for a project the PUB could not endorse.

During
the 50 year operational phase the province will be in an impossible position.
The burden of rate mitigation will continue for 50 years and it will increase.

Rate
mitigation is an admission that the investment in the project will not be
cost-compensatory or self-supporting. At some point the province’s equity will
have to be written down and this will commensurately increase our net debt. At
this point our equity investment in generation and transmission assets is
estimated at $3,739 million. This investment is at extreme risk!

If
Emera’s dividends are indeed guaranteed by the province we have to question why
they were allowed such a high rate of return, given that they were de-risked by
the province.

Questions
remaining:

Having
suffered such egregious exposure during the construction phase what can we
expect during the 50 year operational phase? Will we be exposed to the worst
case scenario of $74.6 billion? Will the settlement of claims with Astaldi and
other contractors increase our exposure?

Will
the federal government recognize that the conditions set forth in the loan
guarantee cannot be met without placing the province into bankruptcy?

Why
are we being so generous to Emera? Why are we guaranteeing a return far in
excess of returns earned by other low risk investments such as Government of
Canada bonds?

Will
the Muskrat Falls Inquiry report on the fiscal impact of Muskrat Falls? Why was
the fiscal impact on the province not more explicit in the terms of reference
of the Muskrat Falls Inquiry? Was the ambivalence deliberate? Ought the fiscal
impact to have been central and not peripheral?



How did a federal guarantee of bond interest and principal
repayment become a provincial government guarantee of
all costs
over a 50 year period, including payment of Emera’s tax-free dividends?



Why
are we ignoring the elephant in the room, in plain sight?

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.

47 COMMENTS

  1. This mumble jumble talk from the current government representative needs to be taken to the House of Assembly. Will Ches and others not stand and hold the Ball government to account?

    Very good questions David, which need "let me be very clear" answers.

  2. And besides the elephant in the room ( the fiscal impact) we must keep an eye on the elephant on the river: the reservoir level, and Vardy's last piece :Will she hold, is it safe, should impoundment be paused, should we have a expert review panel? Acute total failure of the North Spur will add further to the fiscal impact.
    I see Nalcor feels confident and is not making a temporary hold with this last 1 m rise from 32m to 33m. We are now closing in on a 2 m rise, about 6 more feet, to elevation 34m, therefore 5 more meters to go. At this rate impoundment will be much sooner than the end of September. As Nfld will not see any power before Jan due to the GE software delay, export via HQ is the only option.(When Stan testified that was option 3, with first power from MFs going to Nfld via bipole or single pole, being options 1 and 2) Has this change been been worked out as to HQ line capacity, or just store the energy at the UC reservoir via reduction of CF power output, so HQ not needing to be consulted?
    Winston

  3. Will the water level downriver be lower once the flooding is complete? Will the flow through the turbines be the same as the natural flow. If the river below the falls is going to be lower forever, how much lower? What is the impact of lower water on the quick clay at the downward slope of the North Spur and the banks immediately to the north and east of the North Spur? Does the tide reach MF? What will be the effect of lower water and smaller flows on the tidal bore? Has this been explored?

    • Many questions you have Tor.
      TO me the Key questions now is:
      If acute complete failure at the North Spur, what will be the maximum water level rise downstream, at Mud Lake and also at Happy Valley Goose Bay? What lives/locations/property/assets are at risk?
      I would guess a wall of water 20 ft or more reaching at those locations, and much worse impact if a winter failure.
      The impact very likely has been modelled for worse conditions, but likely has been and will be kept secret from residents. If this information is publicly available, can someone say?
      Would it be prudent that be evacuated from areas at risk at least until the reservoir is up to capacity? This would,I assume, depend on the modelling result from such an acute failure.
      Winston

    • As to dam failure, I recently studied for an hour google and other maps of the area, and river widths at various points as to constrictions.
      I assumed 36 m elevation difference from the top of reservoir to immediate downstream of the Spur, so 117 ft. I assume partial erosion at the bottom of the Spur so about 100 ft head instead of 117. I assume an initial breach of about 1000 w wide , then erosion to about 3000 ft wide. I assumed as the flow goes downstream, the water would spread horizontally and the water elevations would be less the further you go downstream, so HVGB a higher water level than Mud Lake. I guess that at least 20 Ft or more at HVGB.
      From the above reference and study by Hatch we get:
      Water level increase at HVGB to be 5.9M, this is 19.2 feet rise.
      Water level increase at Mud Lake to be 4.7m, this is 15.3 feet rise
      Arrival time at HVGB is 1.4 hr
      Arrival time at Mud Lake is 1.7 hrs
      Water flow volume increase is 32 times normal flow.

      My lucky guess at 20 feet or more was from visualization and common sense, no thermometer or slide rule as Bruno would suggest.

      However, this breach by Hatch is of the North concrete dam, also a "fair weather event" I assume without ice or snow cover?
      Also it is about 1200 ft wide, whereas the North Spur failure likely is almost 3 times wider. Therefore the North Spur failure is likely to well exceed a 20 ft increase, would it not?
      For my lucky 20 ft or more estimate, would Bruno elevate me from the lead ring to a iron ring category? Hatch most certainly used computer models with contour elevations etc as inputs.

      Winston Adams

  4. Reading the article above, I conclude that the agreements are horribly lopsided. We have all the risk, while the counter-parties have zero risk. It is like professional legal sharks wrote the contract to protect all interests except those of the Newfoundland public.

    These kind of agreements show bad faith. If the government of Canada wasn't run by psychopaths, they would have told the Newfoundland politicians that Muskrat Falls was not in the interests of the Canadian public and absolutely refused to support it.

    We should default on the whole project while tweeting to @realdonaldTrump that we are more valuable than Greenland, having fish, offshore oil and many natural resources including huge nickle reserves. Remind him we use to have three US military bases. When he offers to purchase Newfoundland and Labrador from Canada, the bargaining can begin.

  5. We are like lambs being led to the slaughter. Everything happening in this province is at the whim of wealthy businessmen/women and unscrupulous politicians who are in it for their own interests and those of their buddies. The unhindered spending of the public purse has pretty well bankrupted this province but the North Spur issue coupled with the methyl mercury threat going full speed ahead with no respect for human life brings their contempt for the taxpaying public to a new level. This would never happen anywhere else without rioting in the streets. Why do these people think they're next to God being able to do as they please with no consequences.
    The claim that rate mitigation will protect the ratepayer is nothing short of colossal bulls–t!! The bills must be paid and we will be the ones who pay, whether by higher taxes or reduced services or both.
    The only other "way out" is to relieve ourselves of our valuable resources which I'll bet dollars to donuts that is being discussed.

    This harebrained scheme conceived by Danny Williams and hatched by Kathy Dunderdale should be reason to run them out of town (after they are tarred and feathered). For the love and honour of Je-us, are these people untouchable?? There has been massive fraud committed here–everyone knows it and nobody willing to act.

  6. Who will ultimately be on the hook for the costs you outline, plus the overruns not yet admitted to or incurred is an easy question? Despite your hopes, dreams and fantasies that is an easy question….NL.

    "Why are we being so generous to Emera?" To be crude Nalcor had The Emperor's hard on that demanded a monument at MF to sate. Emera had the cash Nalcor was desperate to get to keep the least cost myth alive. Emera pushed hard and Nalcor had that hard on so…..whatever the siren…..er Emera said with that lovely CASH she had ….purrrr.

    "Why are we ignoring the elephant in the room," is a silly question! The elephant has been ignored by all from the outset since his little man's desire for a monument swamped the province.

    Strong man demands a pyramid to honour him, leaves town after Nalcor is infected with the pyramid scheme, NL goes bust before the software kinks and desperate attempts to stabilize the spur (they were warned should never anchor a dam) are completed.

    A sad tale but true!

  7. It is good to have the people of Canada behind us on this one with the loan guarantee and all. Canada has been at our back since 1949 and there are obligations that accompany the federation. Besides the 7.9 billion federal funding is a typical 60%/40% funding arrangement for infrastructure projects in Canada.

  8. Read Ed Holletts piece on balancing the economy. I don't go on the silly 5 cod a day expedition annually, but buys my fresh cod at Costco. Yes, fresh Newfoundland, I mean Iceland fresh cod. That's right the biggest retail-wholesale business in town sells cod right from the Islandic. Imagine right here in this province that was settled 500 years ago, and survived on cod now imports a fresh cod from Iceland, probably caught on the Grand Banks, inside or outside, the 200 mile economic zone off Canada's East coast. (or maybe hand lined off the Islandic coast) What does this have to do with oil. Well has to do with giving up renewable resources in exchange for non-renewable resources. Fish for oil under Ceta. KD agreed to Harpers demand under Ceta for MPR's (minimal pricessing of fish on the island) in exchange for the FLG without knowing she did it, or at least saying she didn't do it, but we all know she did. Come hell or high water muskrat was going ahead, and the only way was with the FLG. So sign on the dotted line of Ceta, for a promise of a 400 million in exchange for MPRs and the FLG. After Harper and Trudeau too, signed the FLGs, then the 400 million was off the table. Harper because he figured 5 billion in FLG was enough, just in interest difference, and Trudeau because he figured he gave that much in other monies to NL and not to upset the other maratime provinces, who were demanding a similar amount, but no MPRs involved. There you have it in a nut shell. So we are back to around 400 years ago when this province was not allowed to be settled by fishermen from the UK, they had to return each year with their catch to English merchants. So again MPRs but by another name. No processing on the island, no settlement. Now we have MPRs and declining population. History repeats itself, except now we have a big white elephant that the elites, or new oil moungers, rather than fish moungers, were hood winked. Just to return to Costco cod, it is sold as Islandic cod, but after 3 days it comes off the shelf and sold to restaurant owners, who the next day sells it as fish and chips, fresh Newfoundland cod. Imagine that says Joe blow.

    • Bruno, you're not still trying to plow thru the fucking blather from that Blow Joe arsehole are ya?

      Him and his WA buddy are just about the most tormented, malcontented wretches any blog has ever hosted.

      The guy is in dire need of remedial on his atrocious spelling too.

    • Cod is pelagic. Swim around in the ocean, looking for better fish habitat. Have no citizenship papers that I know of:-) We have a Saveon store just around the corner which have fresh cod, daily, a little pricey, ($2.99/500mg). Quality almost as good as Fortune Bay (1950s). Fresh caught cod then was about $0.035/lb. Anyone looking at the plummeting value of currency theses days? Silver at C$24.50/oz on way to C$150. Why do Canadians think our Banks are immune to collapse of $US?

    • Well Joe, seems some Muskrateer can regular easily stir Bruno to target you and me for pretty nasty attacks on our character. And Bruno takes the bait,…. hook ,line and sinker.
      Problem with Bruno is that one might agree with him more than 50 % of the time, when at times he makes valid opinions and conclusions. But if one disagrees with him on any points, he considers you an enemy.
      That is unfortunate, but a reality. He is not open to be wrong sometimes, nor open to be challenged on his opinions. He has to be 100% right , all the time. When challenged, his reaction is to support the enemy : the Muskrateers, who are anonymous on this blog, some are trolls.
      Meanwhile, yesterday I was reading Bruno's words at the JRP hearings,that was send me, where Bruno showed grit and determination. I now want to find his actual presentation that followed the one I read, to see more of Bruno words back then.
      His focus, I suggest, needs to return to facts, especially as to the North Spur risk, rather than attacking you and I.

      That we are branded wretches by a troll and Bruno agrees……what can I say? A badge of honour, I think, that our words are so distrubing to the Muskrateers. But Bruno seems to sit on the fence, or now may be siding, at times with the Muskrateers.
      Our approach should be to show love and affection to Bruno, that he may see the LIGHT. My goal is aspire toward excellence,but not expecting to reach world class status. If ever I was a real wretch, than to be a reformed and better wretch. Deal mostly with facts as priority. What do you think Joe?
      Bruno suggested I had a stroke in Dec 2016, over my words about the the North Spur.He has not let up for 3 years or more. Recently he has diagnosed my mental afflictions and proposed remedies. Now he considers me a real wretch. This is a worse character assassination that what he says of the Emperor, is it not? However truth is always a valid defense. This for Bruno is a type of humour, or he is truthful, in his opinion. He says he is truthful, absolutely truthful, so no call of censorship from here.
      Bruno says I respond violently to the truth. How much truth does that statement hold? Perhaps I should make pubic on UG my criminal record as to acts of violence, that Bruno might have more facts?
      Winston Adams

    • All par for the course Winston. I have always listened to Bruno on open line, even before he was barred by previous moderators, and I take some of it with a grain of salt, as I do some of his writings here. So yes maybe I do show him some love and affection at times. I Ignore his net picking, until he deserves a blast with both barrels, as you know, I have done before, and he is left without a word or a reply. Now as for going along with a tiny nalcor idiot, in calling us wretched, well always thought that was well below Bruno's class, so makes me wonder at times. But hey, live and let live in harmony is my motto. Average Joe.

    • "With the costs of renewable energy continuing to come down, we've now reached the point where renewable energy makes sense on a subsidy-free, market basis and can have a pretty significant role in our power mix going forward."

      A new 400MW solar installation, subsidy free, cost effective in fossil fuel mad Alberta! Proof the transition away from fossil will not be painful if one rises to the occasion.

  9. THE NORTH SPUR IS STILL STANDING: That to me is Breaking News, like the hurricane yesterday gave only a glancing blow to Porta Rico, is also good news, and now headed in the direction of Trump's mansion.
    The North Spur is getting no public attention in the main media here. Was there an Editorial by Russell that I missed, or a technical opinion by Ashley? Vardy's letter got just over 100 online hits.
    Top items to day at the Telegram:
    # 3 is the passing of Rooms Archivist, 2336 hits
    # 2 is the closing of the Holyrood tea garden resturant, 4039 hits
    # 1 is the Porn site offer to Dildo of free ads, 14,246 hits.

    The statement "sex sells" still seems valid. The Dildo offer was a big item on the Telegram yesterday, and such stories must help their revenue, and a boon for our tourism we are told. Approval for the Dildo craze increased from about 64 to 70 % on the VOCM polls, and 84 % from the Telegram poll. Now the porn industry is excited and wants in. This is the biggest story since the Americans coined the term Newfie in the 1940s, having the status of the other N word used by so many Americans at that time.
    Perhaps we should change our provincial flower now used in the tourism ads, to some item to attract the American and world tourist audience to our many unusual place names, whether Cow Head or Prick Point.

    Usually my first impulse on getting out of bed is too check the weather conditions outdoors. This morning it was to check the River monitoring stations to see if the Spur was still standing. It is. A troubled wretch I am. Out of sync as to the what most Nflders are most interested in.
    The reservoir: an aggressive rate of impoundment, is it not? Is this Safety First? Is it prudent to fill at this rate? Is the evacuation Plan all ready and now public information, in case of a serious adverse event?
    "Trust in Nalcor"? After the exposure at the Inquiry, can anyone have trust in Nalcor, especially as to this serious risk to life and property?
    Winston Adams

    • I previously posted that I thought a chance of sudden complete failure of the North Spur would be a 20 % chance,and therefore 80 % chance of it still standing during impoundment.
      This suggests 4 to 1 odds that it would stand up to pressures and adverse events. Maybe this might give comfort to some, which was not intended. 20 % chance of failure is not a good figure, far from it.
      With a design risk against failure of 1 in 10,000 change of it happening is any given 1 year period, this is 1/10,000 = 0.0001
      Now a 1 % chance is 1/100, so equal to an event that may happen in 100 years, and is = 0.01
      A 1/1000 factor is = 0.001
      A 1/10,000 factor is = 0.0001

      If I suggest 20 % chance of failure in any year, , this is 0.2 %
      How does this compare to a 1/10,000 figure, which is o.0001?

      Take 0.2 and divide by 0.0001 , so 0.2/0.0001 = 2000!

      From that, my estimation is that failure is 2000 times more than what one should expect. Should that give comfort? Is it scare mongering, suggesting the failure risk I suggest is out of wack big time?
      If it survives the impoundment, I suggest risk of failure drops from 20% to 10% for year 1. This still gives a 1000 times an acceptable rate of failure.
      Winston
      Least I made a mistake in this arithmetic, can PENG2 or other check these figures and make comment?
      Winston

    • The impoundment elevation is now at 35.5 m level. The first phase starting Aug 6 was to increase from 24.5 to 32 M. Then they paused for a week to do checks of conditions, and now gone from 32 to 35.5, so will be 36 M by today's end.That leaves just 3M , about 10 ft still to go, then achieving about 690 million pounds of force on the North Spur from the weight of water.
      Will they pause for another week first, or keep going non stop?
      Bruno correctly stated a while back that reservoirs can cause a swarm of mini earthquakes. Is Nalcor being cocky or is this rate of filling sound best practice?
      Winston