On Friday the PUB sent its final Report on the Rate Mitigation
Reference to the Ball Administration which it promptly released to the public.
It would be nice to report that the PUB has contrived a magical solution to this
enormous challenge, but there is no such good news. The Report, itself, is a bit of a disappointment though not because it contains no magic or that it offers limited solutions. It simply misses an opportunity to give certainty and
clarity to the precise dimensions of the mitigation problem, fails to give Nalcor its
proper berth, and fails to offer the Ball Government – and the public – advice on a
realistic and permanent solution to the worst possible consequence of Danny Williams’ legacy
project. Obviously, I can be blamed for an excess of expectation.
Still, politicians sometimes need to be sent sobering messages. One might have been the impossibility that a domestic rate per KWh of 13.5 cents, proposed by the Ball Administration, had any rationale except a political one. There were others but, first, three observations are necessary:
Despite having two worthy Consultants – Liberty
and Synapse – available to conduct extensive analysis, the PUB accepted
Nalcor’s figures as the sum necessary to meet Muskrat’s financing and operating
costs. Nalcor’s revised 2019 figure of $725.9 million was put in circulation in
advance of the last General Election but lacked any basis for why the figure
should replace the $808 million figure used by Stan Marshall at a Memorial
University Presentation in 2017. The PUB does not attempt to explain the
discrepancy or give certainty to the lower figure.
 |
| WE’RE ALL FRIENDS NOW! |
Worse, the PUB left Nalcor
in control of the essential data on which its analysis is based. They ought to
have removed them from any, except limited involvement. Having been abused by
Nalcor during the DG-2 Reference and heard the Commission of Inquiry, where
substantial testimony was heard – under Oath – dealing with Nalcor’s deceptive
practices, what more convincing did it need?
The PUB fails to confirm the accuracy of the
Nalcor forecast rate of 22.89 cents per KWh which it describes as the domestic
rate required to meet Muskrat Falls total cost obligations, which it bases on
project costs of $12.7 billion. 22.89 cents is thought to be an “average cost” per
KWh for the power produced – but it is not the real rate for island
customers on the interconnected system, which is higher. The PUB is rightly
concerned about the high power rates facing industrial customers but it fails
to note that a subsidized industrial rate and a draconian Power Purchase
Agreement (see item #3 below) fall on the domestic customer who must pick up
the cost of the subsidy and any demand shortfall. Hence, the metric created by
Nalcor and used by the PUB of 1 cent per KWh – representing $66 million of rate
mitigation on domestic rates – is likely very misleading.
The PUB understands that domestic demand has a direct correlation
with the rate per KWh charged domestic consumers. Not only did they not explain
the implications of the “take or pay” Power Purchase Agreement (PPA) which
Nalcor imposed on NL Hydro, they also failed to deal with demand elasticity properly, allowing it to be reflected in its Low Demand scenario, which is quite unsatisfactory.
Low income levels and an aging demographic likely imply above average
sensitivity to cost; demand may be hit hard with planned cost increases.
The PUB ought to have presented a series of Exhibits demonstrating the influence
on demand at different rate levels. The public ought to be aware that this is a
not one dimensional issue: declining demand due to both higher rates,
technology, and demography are NOT divorced from the mitigation issue and never
were. As noted, those risks were “baked” into the PPA at the start. Politicians and other policy makers needed to be reminded of the fact, if only because they should understand the origins of a situation possessed only of difficult choices.
It is also
incomprehensible that the PUB does not explain any impacts on the domestic
ratepayer beyond 2039. The Province’s return on equity was calculated over a
50-year time frame – to avoid “rate shock”. The dividends due the Treasury for
its $4 billion equity are not substantially reflected in the current mitigation arithmetic;
the Government’s cost of borrowing is over 4%. Therefore, mitigation is already costing us. As to the return of the
capital to the Treasury, does the PUB view this issue a matter of
intergenerational equity, as Nalcor does, too?
As it stands, the PUB sees opportunity for rate mitigation from
“returns and dividends from Muskrat Falls, Churchill Falls and Hydro, Nalcor’s
share of the export sales revenues, as well as water power rentals related to
Muskrat Falls, Churchill Falls and Newfoundland Power” in an amount ranging “from
$171 million in 2021 to $526 million in 2030.” But this is “much about muchness”[1].
The PUB is uncertain as to the amount of power available for export and notes: “Due
to transmission constraints…the amount of capacity that can be exported is
relatively modest.” It also acknowledges that “export market prices are
currently low”; it might have added that they were low pre-Sanction but that mattered not a whit to Nalcor.
The essence of the PUB’s conclusions is found in the Exhibit (below)
taken from page 75 of the Report. It depicts a problem that must be solved almost
completely by “LCP Dividends & Water”, though water rental revenue is of
such small consequence that it ought to have been just buried. And where do the
dividends come from? Directly from the ratepayer, of course.
The rising amount of “dividends” shown in successive years (the
large blue area) relates to both the presumption
of higher demand and already prescribed higher domestic rates per KWh in those
years. While actual (lower) demand may yet skewer this estimate, the forecast still
comes with a caveat: The PUB notes that Hydro had committed to an equity target
of 25% which the PUB proposes reducing to 20%. More equity means less money for
mitigation. However, the PUB cautions
that any such decision impacting Hydro’s capital structure could “affect its
self-sustaining status”. That means, in plain language, that Hydro may not have
such flexibility and doing so may attract the notice of the Bond Rating
Agencies who may add something to the “Net Debt” of the province.
Otherwise, the PUB looked at “efficiency and productivity
measures at Nalcor and Hydro, and Muskrat Falls Project operating and
maintenance costs.” The Board found some potential savings -$22 million in 2021
to $48 million in 2030 – though considering Nalcor had already lowered the cost
of operating the MFP, they cannot be seriously considered hard numbers.
Electrification
within the building and transportation sectors, after 2025, are “estimated to be in the range of
$40 million to $70 million….but the revenue potential and timing of these
revenues continues to be refined…”, the PUB says. The Board’s phrasing suggests that it is
reluctant to support such a forecast and with good reason. Readers are directed to a post by PlanetNL who
dissected government’s electrification plans and concludes that they represent
political sleight-of-hand rather than good business decisions.
Noted the PUB: “Other mitigation opportunities identified
during the review include the provincial portion of the HST and the elimination
of the rural subsidy…” the first of which, incidentally, PlanetNL has long
advocated; possibly the PUB is reading his excellent work.
The PUB, nevertheless, recognizing that there is uncertainty in their numbers, notes that “Even if all the recommended sources of mitigation are
applied it is estimated that rates will still increase by just over 50% to
approximately 20 cents/kWh”, and that the mitigation shortfall may be “just
over $400 million in 2021.” It is an important statement. (It is also one of the reasons that this Blog has been
telling Finance Minister, Tom Osborne, to get the deficit under control.)
The PUB warns that this shortfall “would rise” if there are changes
to the schedule and cost estimates of the Muskrat Falls Project, the timing of
the transition of the Holyrood Plant and other cost increases…” which may make
necessary “additional sources of mitigation.”
Considering the problems Nalcor
is experiencing with delayed start-up of the generation plant, software
problems on the LIL, operation of its synchronous condensers, and unfinished
negotiations with over the Astaldi claim, we are learning that the price of
incompetence is limitless. Then, the Holyrood Generating Station may never
be shuttered in the interest of “security of supply”, in which case another $1
billion may be needed to secure its replacement.
How should the public react to this Report?
While it is wrong to “shoot the messenger”, I expected
more from the PUB – not miracles – just more and better analysis as to the
constraints of the mitigation options. Otherwise, it was asked to come up with
the impossible.
As it stands, Government has received practically no benefit
from the Study. While not surprised I am sure, they are grateful that the Reference
allowed them to sidestep a tricky issue in a General Election.
The PUB, on the other hand, possessing
considerable utility expertise, ought to have known that using
traditional metrics for this challenge was a hopeless exercise. They attacked the exercise as if it was a rate application
from Newfoundland Power. The Reference needed imagination as well as some
risk-taking which, admittedly, is not such a Board’s mind-set except that the cost would only have been advice, not money. The PUB, unaffected as it is by the exigencies of partisan politics, could have given a hapless Government the
basis on which to have a conversation with prickly voters whose expectations
the Premier has consistently – and imprudently – raised.
What might the PUB have proposed?
In place of fiddling over “efficiencies” from paring down
Nalcor, worth just a few million dollars, they ought to have estimated the
savings of a complete shutdown of Nalcor. In a small jurisdiction like ours,
there is only room for ONE Hydro Corporation. The Feds must be aghast at such
waste.
The PUB might have more bluntly reminded the Government, too, of the
price per KWh paid by customers in the Maritimes. While not a strictly comparable market
environment, the Federal Government is sure to balk at subsidizing rates to a
level lower than that of New Brunswick and Nova Scotia – notwithstanding the
fact that the subsidy of Muskrat Falls is a direct subsidy to the cost of rates
in the latter province.
In a similar vein, the PUB might have noted that voters bought
into the Williams/Dunderdale/Martin Plan of electricity rates starting at 15.1
cents per KWh post-commissioning; it was an appropriate starting point for
Premier Ball, and for all the right reasons. One way or another, the public is
going to pay for their disengagement from reality during the Danny Williams
era, even if they can rightly argue they were deceived.
In addition, had it been bolder, the PUB could have
constructed a paragraph or two reminding the Feds of the tragedy in which
NRCan was a culprit, having conducted a high school equivalent analysis of
Nalcor’s business case for the Muskrat Falls Project. NRCan recommendation for the Federal Loan Guarantee was based on DG-2 estimates which the
PUB called “desktop” or “concept study”, Nalcor having completed only 5-10%
engineering design. The project estimates were bogus, as the Inquiry confirmed,
and were rightly rejected by the PUB. The Federal Government’s acceptance of
the DG-2 numbers was not only irresponsible, it constituted fuel for the train
of deception that followed into DG-3 and afterwards.
The Federal Government is
not responsible for Nalcor’s deceit but, as citizens, we have a right to expect
better from them. Had the PUB taken up this issue it might have been seen
stepping into the political realm. But, bear in mind that the Government’s
Reference was completely political anyway. The idea that either Nalcor or the Finance
Ministry has half a billion dollars annually, not already put to use, is
preposterous. The PUB had a right to answer the Reference in kind and should have.
In failing to see the “big” picture aspects of the Muskrat
nightmare, a Treasury “crusher” not a miscounting of the petty cash, the PUB
needed to say to the Ball Administration: your request of $200 million from the
Government of Canada is inadequate, that it needs to be higher. Why? Because
based on reasonable certainties described in the Report, the PUB estimates a mitigation
shortfall exceeding $400 million. They, and everyone else, know the “known
unknowns”; we don’t have a handle on the cost of a) delayed start-up of
the generation plant, b) software problems on the LIL, c) the
repair/replacement of synchronous condensers, d) unfinished negotiations over
the Astaldi claim, e) the cost of “security of supply” post-commissioning and
f) how far demand will drop.
The one absolute certainty is that even a $200 million response from the
Federal Government is too little. The idea that, after “tweaking” via
electrification and bureaucratic efficiencies, the Newfoundland and Labrador Treasury
still possesses fiscal room for rate mitigation is simply fanciful..
On this basis, I fear that the Ball Government is having the
wrong conversation with the Federal Minister of Finance. This may be a point at
which the Premier should be asking the Feds to place another energy asset –
Muskrat Falls – inside the Federal Crown Corporation that owns the Trans
Mountain Pipeline.
Finally, the PUB has returned the problem of rate mitigation to the place where it belongs. The politicial leadership has nowhere else to hide.
Premier Ball will defer to the Liberal Government’s man, Shamus O’Regan.
Watch carefully folks. Will today's announcement include a true Cost Estimate to project completion, including commissioning, with a 5 year operating budget?
For years now despite one disaster after another, Stan the Man has stubbornly stuck to 12.7 billion as the MF cost. This is a load of bullshit that underestimates the cost dramatically.
It is safe to say that the current cost is 16 billion and skyrocketing! With the lies about the cost of the LIL software, synchronous condenser snafu, and whatever else Nalcor is hiding from the public, the true costs will dwarf the remediation costs now anticipated.
Who will pay the at least 3 or 4 billion overrun MF now faces? When will Nalcor with its splendid secrecy, come clean with the NL tax/ratepayers? As long as the secrecy continues, both the spiraling costs and the bumbling incompetence will continue.
We now need some "stable genius", to take us forward:-)
How do we know that this report is useless?
Apparently, even after listening to months of testimony over 2 phases of the Muskrat Falls Inquiry, how anyone the PUB included, can rely on ANYTHING that NALCOR spews about this project defies human logic.
It was proven witness after witness from both sides of the fence, consultants included, that NALCOR'S calculations were biased and WRONG!
This PUB process like many other aspects of this Muskrat Falls project, only proves that it's not worth literally the paper it is written on.
I had a coworker who had a very simple logic when it came to compiling data and statistics:
"Garbage in, garbage out!"
That would be a very apt description of all things NALCOR and Muskrat Falls!
Remember the Fed take out bid on TMX. What happens if the Fed just buys Muskrat and the dysfunctional transmission line? Is that part of the Seamus Plan?
The usage will drop as people move out of this province. It become a simple decision when you have to decide between heat and food. The only people left will be the wealthy that can handle the increases and the people without the resources to move. I would suggest the latter will have to start using the food banks, if not already. This province is bankrupt. Face the music and let the feds take over the province. It simply can’t be any worse than either of our political parties. Hard to believe but, I am an optimist!!!
Very informative post UG.
Confirms my very early view that the PUB reference was mostly (and by far) a political maneuver.
Nalcor is still the puppet-master.
Neither government nor the PUB has shown a willingness to do what is needed and has not conducted the kind of comprehensive, objective analyses needed to get to the root and multi-dimensional aspect of the problem that we face.
Well done.
NS has become a leader in many ways, as compared to NFLD.
Here at my hotel I read the Hearld paper, letters.
One cites announced projects to replace oil burning furnaces in three schools , a courthouse, and two other govn buildings with heating systems that use local wood chips.
Another by engineer Don Carter citing Health Minister in 2o13 sying "no more money for bricks and mortar for long term care beds" He says adaptive renovation of existing abandoned buildings can solve much of the problems, instead of tearing down good buildings. Govn should think outside the box.
Also that over 50 % of homes in NS, NB and over 80% in PEI are heated by oil. Here in Nfld, heating with electric baseboard, instead of 300% efficient electric HPS ,was the rationale for MFs, and still now to add to that inefficient form of heating as mentioned by Planet NL. Such wasteful schemes of heating would never be encouraged in those provinces.
In 2011, 20,000 minisplits per year were installed in NS, these 300% efficient, and incentives of 1500 each then.
Why are we so backward with our power companies leadership, and govn leadership?
Winston Adams
Winston, if you have time, look up David C. Stewart, Mechanical Engineer. He, Don Finch of Provincial Engineering, (St. John's, 1980s), Northland Associates, Atlantic Consulting Economics, Omnifacts Research, and myself, worked on an " Energy Technology Demonstration Strategies for Nfld, January 1986, (Energy Mines and Resources, Canada)". Later, Dave moved to NS, a more active province in Energy Conservation, alternative energy Technologies to this day. Needless to say NL Hydro guys at the time, 1980s were not interested in our efforts to bring about similar progressive energy policy.
Hoping for some improved health outcomes for your wife.
Excellent piece, safe to say 16 or 17 was the better number to tout about
Can someone explain or refute that if there is no new income into an economy how does rate mitigation work unless there is a reduction in services?
Otherwise, if the government does find 'new' income why shouldn't we complain as to why the government didn't find that money before now? It doesn't really matter if the provincial government or federal government gives up the cash – it is taxpayer money, impossible to separate rate payer from tax payer.
More or less, rate mitigation to offset the costs of MF is B$ – voter pandering at its best, and the NL public is about to fall for it again….
PENG2
Saw rate mitigation by way of the PUB as voter pandering when it was announced.
And today's announcement was another political illusion/slight of hand.
A bunch of us just listened to the news conference and we were all bewildered. Monetizing what assets and how? Deferring costs, cost-of-service model, rates won't go up because of Muskrat Falls (some other reason perhaps?), negotiations meaning that nothing is final yet …
This is just a publicity stunt and excuse for a campaign speech.
The project isn't finished, there are more costs to come. If we don't increase power rates, then the money we need will either be higher taxes or reduced services.
Oh well, it is a good distraction from the total lack of new corona virus outbreak planning.
Seems like, 5 years later, the smart minds have "started negotiating" a bail out deal. How long ago did the concerned citizens say this is a big mistake, which will bankrupt NL?
My first public (verbal) critical comment was to the CBC — about Feb/March 2011 —"we don't need it, can't afford it, and it's too high a risk".
And my first letter (about 80 articles/letters overall) was published in The Telegram in April 2011.
Part of government's mitigation announcement reportedly involves "…transitioning the Muskrat Falls/Labrador transmission assets revenue model to a traditional cost of service model".
I understood that a cost of service model was already what was used in the financial modelling for the transmission line.
Can someone explain then how "transitioning the Muskrat Falls/Labrador transmission assets revenue model to a traditional cost of service model" differs from my earlier understanding?
The Liberal plan of transitioning to a cost of service model is consistent with my Feb. 28th, 2012 Written Submission to the PUB http://www.pub.nf.ca/applications/MuskratFalls2011/files/comments/13-MA-2012-02-28.pdf (page 5, System Planning Assumptions refers), where I challenged Nalcor's key planning assumption (where Nalcor chose to use a supply planning assumption, PPA approach instead of a cost of service approach for Muskrat).
Nevertheless, the PUB failed to act on that part of my submission (I had requested a thorough, objective comparison of Nalcor's supply planning/PPA approach with a standard cost of service method).
Better late than never.
Seems like another case of kicking the can a little further down the road.
Any idea who "these professionals"might be, working around the clock, etc. "negotiating" a deal? Premier profusely thanking them in Public. How many hours @ $50+ doing what? where? how? How many are Liberals? How many are PC? Who is in charge of the Task Force? Secret back room deals again? Remember, M. Martin wheeled and dealt, with his professionals, and that did not turn out well, at all. What's Stan up to? Where is the Estimate to Complete?
All valid (frightening) issues Robert.
Ball has had since 2015 to do right for rate/taxpayers. But nothing has changed.
We are being screwed, over and over and over, again and again.
PC or Liberal – same difference.
NL now the Greece of the Canadian confederation. NL keeps borrowing from future revenue unpayable debt kicked down the road.
The post 2041 revenue coming to NL post UC agreement deal. It is like raiding the piggybank of 20 year future income. Your kids will despise the present generation for the bungling and debt piled on their backs!
I'd argue that we are best compared to Puerto-Rico. Really this is only a delay in the inevitable, unless something changes radically in the next couple of years, insolvency of our province. Puerto-Rico was bailed out by the US government and baring a seismic change in our fiscal situation the same thing will occur in our province!
So does this rate mitigation scheme also include a buy-back program for all the luckless saps who needlessly blew thousand$ upon thousand$ of dollar$ installing mini-split heat pumps and similar exotic thermodynamic contraptions out of an irrational phobia that their electricity rates would double?
Bought my mini-split in 2012 and paid for itself in 6 years (even at rates that were less than they are now). So not a waste.
Yah but that was before the extent of the MRF debacle became fully realized, of which the local heat pump cartels took full advantage of by gouging the aforementioned luckless saps on the cost of their heat pump installations.
So Maurice, I guess you won't qualify for any buy-back program… tough luck.
I installed a ductless heat pump with 4 heads about five years ago and it has already paid off. I got a great deal on the hardware and did some of the work myself. At today's prices and exchange rates, I would still be out some cash.
However, even if it never paid off – I have purchased in advance, lower monthly bills for the future and cooling in the summer. I don't know what my future income will be, if the pension plan will partially default, if retirement benefits are eliminated, if the Canadian dollar is worth much less, if inflation skyrockets, if municipal taxes soar etc.
Everyone with a home is more secure if they change/renovate/improve their home so that they can get by on less (water, electricity, maintenance, add an apartment to rent etc). To me it is about self-sufficiency.
A good minisplit should last 18 years. Mine is already trouble free for 10 years. Maurice has paid off his unit in 6 years, so with luck for 12 more years,that is like a buy back plan twice over with savings. If rates go up, maybe 3 or 4 buy back equivalent. Tough luck anan@21:02, on you, with obsolete wasteful heating system, afraid to invest in your home improvement.
Winston Adams
Don't be so foolish b'y… blowing your money on that exotic over-priced junk.
Don't you realize you're living in an "Energy Warehouse"?
Why in the name of Christ would you need to blow thousand$ on a bloody old heat pump?
Its all good bys they’re hard at at
what a bunch of blow holes
we’re gonna talk about it. don’t worry. we’re negotiating terms of reference to negotiate terms of re-financed 50 year mortgage to 75 years again to 100 years, with negotiated deferral deal for 50 more years after we negotiate the risks involved with anticipating more risk.
hard at it.
fart.
oh yeah. its every pc members fault. frank moores started gull island. his fault. vote for dwight.
Think Frank got credit for starting the fixed link across the strait, with a big bang
“Additionally, Canada is also prepared to work with provincial governments to consider opportunities for further electrification and decarbonization.“
this means helping quebec develop gull island to sell power to NB NS and NL cheaper than MF power. at least NS will be able to shut down coal fired plants.
GOOD! Let Quebec do it, they have the expertise.
God help us all if a bunch of newfies and baywops from that bloody nalcor are put in charge of it again.
Dwight Ball, you can schedule one of these rate mitigation "news" conferences once a month?
You will never dig yourself out of the hole you have dug for yourself!
Yup!
The PC Party may have removed the sod?
But the the Ball Liberals have done themselves no favours by continuing this farce of a hydro project?
We were about 5 Billion in when the Ball Government assumed power.
We are now at 13 Billion and counting.
And that is the good news?
Let's not forget how this Government has still continued on a "drunken sailor" spending spree since they have assumed power?
Pun fully intended!
Yup, you would never guess the Province was in the hole as bad as it is?
If someone wasn't paying attention to the fools we have governing this place!
You noticed I never once mentioned Carla Foote, or any of the other asshat moves this Government has made since assuming power.
I didn't even once mention Ed Martin and NALCOR?
That is how much of a classy guy that I am!
Unfortunately, I don't have a big enough eye roll emoji to insert here?
So you will all have to use your own imagination to see how big it is?
You didn"t even mention "Danny's Wet Dream"
Now listen here buddy, I want you to know that " drunken sailors" spend only their own money. No loans, no credit, just cash on the barrel head.
"Muskrat Madness" by Cabot Martin is my 'go-to' Bible!
Wayne,
I like the way you think!
Sooooooooo.
After being in power since 2015, and after a long period of discussion by their respective negotiating team members, both the provincial and federal government's have made the wonderful announcement that they will START negotiating towards transitioning Muskrat's financial model towards a cost of service model.
Why is this ONLY NOW being considered?
Where was the previous PC government?
Where has the current Liberal government been?
Why did the PUB not conduct a comparative analysis in 2012, when its terms of reference allowed it to review Nalcor's assumptions?
Below is an excerpt from my 28 February 2012 (!!!!) Written Submission to the PUB least-cost 2-option review (almost 8 years ago).
QUOTE
….To consider and appropriately "evaluate" Nalcor's escalating supply price system
planning assumption, Nalcor's assumption must be compared to a year-by-year breakdown of costs over the entire 57-year (or 50-year, as appropriate) assessment period calculated using the utility industry's "cost of service" standard — an approach or assumption other than (and different from) Nalcor's escalating supply price assumption.
Only by providing an appropriately clear, accurate and thorough 57-year (or 50-year, as
appropriate) year-over-year statement of costs using a cost of service methodology can
the Board (and the public) `consider and evaluate' the full extent to which Nalcor's
escalating supply price system planning assumption might, or might not, be as Nalcor
claims, the best (the most "appropriate") assumption for the Muskrat Falls option and
CPW cost comparison calculations.
It is respectfully submitted therefore that:
• the Board require Nalcor to apply a cost of service assumption/methodology to its analyses of both options and provide both the Board
and the public a clear, accurate and thorough year-over-year breakdown of costs (including graphs) over the entire 57-year (or 50-year, as
appropriate) Reference Question time period,
• the Board and the public be provided an appropriate opportunity to review the cost of service data and analyses, to make presentations and/or to provide comments, and that the Board defer submitting a final report to
government until receipt, consideration and evaluation of the application, impact and merit of this alternative cost of service system planning assumption is completed and compared against Nalcor's escalating supply price assumption,…. UNQUOTE
MA @ 10:47:
My understanding is that the cost-of-service model cant be used because of inter-provincial trade limitations and language in the EMERA power supply language – more or less, MF assets tied tot he EMERA power supply agreement need to remain un-regulated.
My gut tells me this will be a dead end eventually unless there are other regulatory changes – changes that would require compliance/agreement of NS, its PUB and EMERA.
PENG2
Not much in the know of fincincial contracts etc., but will add my 2 cents worthy anyway. Yes, agree why did it take so long for someone to say and take action in doing away with Edie's dividend slush fund. Through legislation or otherwise. Eddie and company were eyeing the energy warehouse. Yes, get dividends from the rate payers to build Gull, build offshore and onshore wind farms, build transmission lines down through the states, etc. Plus pay themselves big annual bonuses. Muskrat was just the opening volley. Now maybe 30 b can be saved from the nalcor monster. Well, profits from all that stuff…humbug…who needs profits when the rate payer and tax payer are going to foot the bills. Maybe we are beginning to get a grip says Joe blow.
The fairy tale illusionary 'dividend' was also put in there to hoodwink gullible politicians, whose eyes glazed over when they thought of that make-believe $20-30 billion 'dividend' (a slight-of-hand tax grab/political slush fund) coming into government.
They could use that to stay in power forever.
I recall Ball himself (when in opposition), I think it was during question period, salivating over the prospect of the Liberals being in power when the dividend/tax grab/slush would start rolling in.
In short, no one in power wanted to question/challenge the Muskrat Madness.
Oh my, this is so complex that it seems no one knows what they're doing, going around in circles, saying we will continue to talk and mitigate, while the madness rolls on, rolls on.
The complex economics and the legalities is beyond me, and perhaps designed to be beyond anyone.
We are governments by a bunch of shitheads, and the public must be half full of shit to permit it. Tens of thousands should be marching on Confederation Bldg and the Nalcor office,and even some on Fortis, The Consumer Advocate and the PUB offices, and all the fat cat law firms siphoning off big fees.
But…….. We need only 600 million or so a year to pay for MFs, did not Choosing Wisely for our health care say we could cut 20% off 3 billion a year? Problem solved?
What about negative interest rates? Keep rolling over the 16 billion, costing 3.5 % with money borrowed at minus 3.5 % ( when this happens in the future) so not to worry, be happy?
If that is mad ideas, is it any worse than MFs itself? Does not a minus times a minus equal a plus?
Perhaps I'm not thinking straight, a hectic 2 days and little sleep, and trying to get insight on this big Newfie Joke.
Did not Danny say MFs was worth maybe 100 billion, swore before Leblanc? So, if the numbers with interest is 74 billion cost , that is highly profitable, right? Has the media got Danny's latest insights to counter the negativity?
Winston Adams
And I forgot …….should there not be marches on the offices of MUN?
Is not Dr Locke located there, that economic genius who promoted MFs as least cost,while sucking and blowing at the same time with his consultant work? And the silence of all those experts, especially engineers who could offer no better solution( except for Bruneau of course). And now to add insult to proceed with electrification with resistance heat, with risk of more DarkNLs , if MFs power is not reliable? No one from MUN opposing that, which even the PUB report and PlanetNL says is a foolish move at present.
Winston
I sense that as concerned citizens, yesterday's Public Relations exercise, did nothing to put our concerns for the future, and our children, in a comfort zone. Pitiful, and an unreasoned approach to fixing past stupidity, and malfeasance. Coverup indeed. Oh well, we await the Leblanc Report, and the ebbing away of the enriched professionals at NALCOR. Where is that Cost update Stan, or you too, just a pawn with buttoned lip?
My point being PENG2, that EVEN IF there is merit to your statement, Muskrat was not sanctioned until almost a year AFTER the date of my Written Submission to the PUB, and the PC government had 3 years and the fed/provincial Liberal governments have had 5 years to address REAL obstacles (IF ANY) to a proper assessment of the application of a COS method (unless you think $30 billion is chump change).
The dividends, tolls, rates, taxes, etc. collected, that Ballz referred to were from two Companies of the 16 Nalcor entities, MF and LTA he called them, they are Muskrat Falls Corporation and Labrador Transmission Corporation
Emera owns significant portions of the other project companies. HQ owns significant portion of CFLCo
https://nalcorenergy.com/about/transparency-accountability/reports/annual-quarterly-reports/2018-business-and-financial-report/
Best advice to the Opposition, Ches and Coffin; Break down the walls of secrecy, surrounding the Energy File. Too much back room stuff going on amongst the "elites". Seek truth. Much is at stake for generations to follow. The shabby record since Joe, of practiced obfuscation, has not served your people well. Sure, a few insiders have always had their agendas carried out to their own devices, and benefit, at the expense of the Workers, and the vulnerable.
I write as I see it, and always fly away when someone chops of my limb, no fast horse in the race. So what has happened since the monster, Frankenstein was first created and let loose. His creator resigned long ago despite saying at the Inquiry that he was worth maybe 100B. Then his nibs resigned shortly after her sanction. That left it all in Eddies hands to do as he pleases, not that he was not permitted to do the same under on their watch as he was now bigger and more powerful that his creator. So, the boondoggle went from 6 to 7.7 to 13 B. The Dividend slush fund had been set up, so why worry, billions rolling in each year, compliments of the rate/tax payer, as soon as the power flowed. Then full speed ahead to the energy warehouse, gull, more under water cables, power lines through the Maratimes and beyond. Free wind farms…the sky was the limit. Not to mention offshore oil. That was the crown jewel in the short run. The mad hatter plans were well laid by deceiving mice. The Norwegians had done it so why not us, way to go the Norway Way. (Will say more about that later) Won't mention the other premiere and cabinets, they didn't know if they were punched or bored, and didn't want to know. So then ball et al came along. Eddie called his bluff immediately, my way or the highway, never expecting he could be replaced. So that was the first step in getting a hold on the monster Frankenstein. But he was not going down easy, he created his side kick Oilcor. That may have been the second step in controlling the monster. Ball and Stan jumped on the monster and rode along for a while, after all there would be dividends if they finished strong. How wold those dividends be used by future governments, to build gull etc. Or buy bread and butter. Nalcor would take their first slice anyway and see if there was any left for the people. Then after ball et al along with Shamus etc. Would see what they could get from the Feds. The Feds balked. No they said only in dire circumstances. You still have the divided guzzler, we can't support him. So the third step in sleighing the monster was to cut of his oxygen supply, the devilish dividends. So maybe saving 30b, but still remains to be seen how much the rates will go beyond 13.5 cents and keep the boondoggle going on a shoe string if it gets up and running, and the Feds may kick in a few dollars then. So the saga continues, but at least the unelected monster has been slayen. It will be up to the people now to elect those in control, after all we have a minority government. For those who say the Feds should buy her, like the pipeline out west. Why would they buy her when they already own half of her through loan guarantees. Or maybe they will say, we will give you 4b and call it square, then they will own her lock stock and barrel, says Joe blow.
This comment has been removed by a blog administrator.
This comment has been removed by a blog administrator.
Lol, if I could write in French or Spanish, I would. Then you would be some upset, unless you are bilingual or multi-lingual. But I am working on it.
When is the next Provincial Budget, Economic Update, etc.? The Provincial books need to address the current global financial crisis. Service cuts soon?
http://turboleadershipsystems.com/pdf/DeadHorseManagementStrategy.pdf
TO BE CLEAR,
Ball's announcement yesterday of the start of negotiations (with his partner, Ottawa) for a MUSKRAT FALLS rate mitigation solution is misleading.
His exact words were:
"…I am pleased today…to announce…a restructuring of the financing of the LOWER CHURCHILL PROJECTS (projects, plural) to help ensure that THEY (plural) are financially sustainable…".
So this is really the first PUBLIC announcement of the start of negotiations with the federal government (and no doubt, Quebec) on proceeding and tying Gull Island hydro development into the Muskrat Falls fiasco — in the guise of a rate mitigation initiative.
All done behind closed doors (and even announced in a deceptive fashion).
Danny/Dunderdale gave us the blue Boondoggle.
Now Ball is giving us a red one.
PC or Liberal — same difference.
Maurice, lots and lots of Code Words, don't you think? Little or no Transparency. You are correct; PC or Liberal Mantra, protecting whom? When in doubt, bolt down the truth, tell a few white lies. Now and then the Big Lie. Bring in Freeland, NAFTA type negotiations in progress. Katie, (CBC), needs to pack it in at the Primaries. Bigger fish to fry near the Overpass. Get her a swile skin coat, oil skins, standing outside the negotiating theatre, somewhere near where you are standing:-)
Yes, that said, and you're probably right, but there may be a method to that madness: if all to electrify the Atlantic provinces to go off coal, and green hydro to Ont to use up HQ surplus to make Gull more attractive, and to maximize the potential of the Grand River: CFs, Gull, and Muskrat. If the economics is sound, and not on the Nlfd ratepayers back. And if details are not all behind closed doors, signed off, before the public is informed.
If all worked well it could be nation building, and good policy to counter GHGs and climate heating.
But, since they are most all scallywags,and elites, can we trust them? NO.
Trust but verify is the Russian proverb. It means show we can trust you. Prove it.
So far there is little reason to trust. They are mostly slime bags, deceitful as the Leblanc Inquiry showed.
What do do? Peaceful march and protests. But all are too lazy for that. We sit at home while our children's and grandchildren's future is bartered and sold in secret.
Ball smiles knowing there will not be a whimper form the public. We are fools led by fools. Already to the tune of 16 billion wasted, a world class fiasco, this like a 40 year soap opera, someone dies, someone fills in and the story never ends.
The Uncle Gnarley soap opera now in year 8. How many change of Premiers? Go to sleep for 2 years and tune in, and see GE still working on the software? Strong finish still promised? Mitigation still promised? Ball Still smiling? Shameless Regan still shameless? Holywood stars now with million dollar cottages at Dildo to escape the summer California heat.
Winston
This comment has been removed by a blog administrator.
Anon, @20;20
At home all day going blah………….on UG?
At 1 am, not at home, but at the hotel near Halifax airport, after a gureling day seeking advise and a Plan of Care for wife's stage 4 cancer with an expert who does HIPEC (look it up) a generally high risk procedure. Flight was to leave about 10pm, repeatedly cancelled maybe due to icing conditions, so rebooked for 7am flight.
About 3 hrs sleep, and made the morning flight. Wife wearing a face mask, presently her immune system impaired following infusion chemo into her veins also causing memory issues and diarrhea.Wife with colonmosty,(bag on her side), and dirrhea kicks in big time after day 2, so hoping no mishap and a bag leak, or a big problem.
I generally avoid flying, with severe back pain in a sitting position, but we make it ok. My son accompanies both of us, we both having disability, my wife also blind. But, we are overall very fortunate, and hopeful, and not worried about heat bills.
At home we are exhausted, I went to bed with my clothes on, slept for 2 hrs 1-3, my wife asleep in the recliner. Had to cancel her appointment with oncologist for tomorrow morning, she being too exhausted. Several emails by me to cancer Navigator to reschedule, if possible.
Meanwhile, I keep abreast of the Boondoggle and the UG comment, and I blah when I can, it often being #2 in priority.
Me a hypocrite? Yes, I suppose so. Who is not? Hypocracy is relative I think, some big time, some small. A very serious human flaw. Maybe I shold be leading the protests, and have the boondoggle #1 instead of #2 my priority? I have also blahed with presentations at the PUB, and considered blahing some more there. Perhaps this blah blah of mine is all a waste of time? Most blah not even one time, and think ignorance is bliss.
Winston Adams
This comment has been removed by a blog administrator.
Agree Maurice, Lower Churchill Projects, is ambiguous to say the least. Don't know why they do that, except just to be ambiguous, so they can't be nailed down. But the alert media will sort that out, maybe next year. So does PROJECTS refer to generation site, LIL, soldiers pond, NS link, etc. Can't imagine referring to Muskrat and Gull, at this time. If they are they may as well throw in the Fuxed Link too, so that we can be as totally confused as they are themselves. Joe blow.
Joe, while the corporate structure of the various aspects of the boondoggle is broken down into somewhat separate entities, they are all component parts (it seems to me) of only one project (the Muskrat Falls Project, which is defined in legislation).
So I think the term "Lower Churchill Projects" seem to refer to both Gull Island and Muskrat.
Maurice you raise a terrifying possibility!
As if one thinks it can't possibly get worse, the prospect of Gull becoming part of a backroom firesale to prevent NL sliding into the abyss looms large. If true Maurice, we aint seen nothing yet!
So the federal and provincial liberal governments plan to cut down the money tree, set up to grow money for Nalcor and the provincial government by Williams/Dunderdale and Martin, in order to mitigate rates in NL but who will pay for the massive debt created to pay for the assets of the boondoggle??
Other than brief mention of returning dividends, there was little acknowledgement of PUB recommendations, no discussion of re-integration of that silly power supply wastage. No mention of therest of his April 2019 plan. reminded us of the plan then said nothing other than intent to re negotiate soon. i guess he doesnt know what was in the blurb anyway.
if Moodys or S&P say its a waste of time announcement. it is. ballsth sound like leaf fans predicting a stanley cup. always next year is the year. horeagan and hosbourne are hard at it. next year bys.
seriously 4 years no change in outrageous spending habits. no action for four years except to put gas taxes on. spent putting down poor grade asphalt to keep construction jobs going. fixing mess every year.
I have a good economic idea. buy snow equipment. destroy infrastructure with snow clearing every winter. repair infrastructure every summer. year round emplyment.
but do it in the day. night time we cant keep lights on past 9pm.
is there an actually leader amongst them? minimum wage growth actually improves local economies. allows more spending and more disposable income, its proven in every jurisdiction that does it.
provide cheap as feck farm land, a shit ton cheaply in return for local commitment. you dont need to charge stoopid amounts for crown land. galway was built on cheap land. open it up to more cheaply. they aint coming for the soil.
give jeff bezos an airport and land. he’d employ half the province in a warehouse
do something. anything. any action that shows effort.
or resign
Your spelling errors are not a problem, as your message is clear: have a good plan and act, otherwise you're not a leader,and resign. We have no leaders, no good plans and no action. But who resigns from a cushy job and many getting golden handshakes ranging from 1/2 to 6 million dollars.
WA
Well said!
this deferral plan sounds like earmarking all of post 2041 revenues for servicing this debt. so we’re wiping out that source of revenue growth. we’re planning to earmark atlantic accord money that was the big ‘announcement’ last time. what future revenue growth is left for the stagnant economy? Oil.
we entered confederation in the wrong century. we should be investing in Elon Musk’s time machine.
You know its bad when the Premier of Quebec says we have no choice but to beg.
https://www.theglobeandmail.com/opinion/editorials/article-how-ottawa-helped-newfoundland-build-the-multibillion-dollar-fiasco/
Well, apparently this is the view of Muskrat Falls from Ottawa, it pretty well covers all the bases from start until now, and our much talked about supposed "bail out".
If only if the right people had to have listened?
NALCOR:
"The tangled web you weave, when first you practice to deceive."
Yeah I read that. Really points the finger at Harper and the Feds. Similar to blaming the parents for unsupervised kids while they played with matches and ended up burning down the house.
What do you expect when a bunch of stupid newfies and idiot baywop politicians are involved in formulating public policy?
These poor wretches are their own worst enemy… always have been, always will be.
They're incapable of competently governing themselves… the only independent state in the history of the world that willingly surrendered its self-governance when it all went to pot.
Nothing but a societal basket-case.
Now bye, let Greg Malone/Bruno figure it all out. If had been left to the Circular Road, St. Bon's, townie, ambulance chasers it would have worked out all right. Ooops, I guess we did and it didn't.
sell sell sell
Sell your half of the LIL (or NIL as in ZERO MW), to Emera and complete their investment.
Sell Gull Island to Hydro Quebec maybe the conveniently offer 5 billion.
ring the bell. ring the bell. settle in for the big Rrrrrrrrr.
Rent your rock for Chinese quarentine.
What a great idea.. turn this tortured province into a COVID-19 quarantine central.
Who knows… they might even be able to recoup a few lousy shekels from the cost of running this destitute shithole.
The only reason Ball is leaving is he already knows the outcome of rate mitigation. Newfoundland will get nothing even with the pretend help from the nincompoop Seamus ORegan. Ball does not want to be sitting in the top chair when the official announcement telling Newfoundlanders to suck dust is announced.