Open Letter for all prospective Members of the Provincial House of Assembly running for election on October 14, 2025:
As independent Chartered Professional Accountants, who’ve read the MOU, we support and respect our colleague, Mike Wilson, in taking a public position on the critically important December 2024 MOU between NL Hydro and Hydro Quebec. We agree that the MOU is not in the best interest of the people of Newfoundland and Labrador.
Based on our review of the available information, the MOU repeats key flaws of the 1969 Churchill Falls Agreement. We specifically refer to the following crucial failings of the MOU:
1. Contract term
A fundamental issue with the 1969 Churchill Falls Agreement was the length of the contract.
The proposed Power Purchase Agreements are for 50 years 2025 to 2075 for the CF Upgrades and 50 years from the start of commercial production for CF Enhancement (aka CF2) and Gull Island (GI). It is not possible to anticipate and make provision for changes that will occur in this time period.
2. Cost-plus pricing
There are price increases to be built into the Purchase Price Agreements, however the price appears to be primarily cost plus, not market based. (A search of the MOU results in 9 uses of the term ‘cost-plus’).
3. Transmission corridor
The MOU does not provide any NL Hydro access to Hydro Quebec transmission assets. This is a serious limitation on NLHyrdo’s ability to benefit from its asset, the Churchill River and any other future hydro development in Labrador.
4. Allocation of power from the projects
The power generated from the projects is to be allocated approximately 20% to NL Hydro and 80 % to Hydro Quebec.
The MOU combines four distinct projects, the existing Churchill Falls contract, upgrades to Churchill Falls, expansion of Churchill Falls and development of Gull Island. This unnecessarily complicates and confuses the negotiations as well as any analysis. We also note the absence of information from the Province on any clear goals or strategic objectives, against which the MOU could be assessed.
As such, we ask that you commit to stopping the contract negotiations until the issues above are corrected.
Sincerely
H. Boyd Chislett, CPA
Larry Blanchard, CPA
Susan Cohlmeyer, CPA
