OVER A BARREL: THE START OF A NEW RESOURCE GIVEAWAY?

Another great blog, Uncle. With Dwight Ball's popularity in the gutter he needs good news and will likely sell Gull Island to Hydro Quebec in a similar scenario.Probably before Spring 2017.

This is a chilling summary of the state of affairs now facing the helpless populace who continue being denied democratic oversight or any transparency. All the while Nalcor continues playing with the "house money" that the helpless chumps must keep putting up for 57 years, not 50.

Will the chumps remain passive while they continue to be fed BS in the dark? Who will demand the Nalcor house be fumigated and the rats disposed of? Who will demand the part time leader at Nalcor open the books and demonstrate the competence and honesty of the contractors?

Once again the aboriginal groups are ignored in any discussions and their culture and food supply are bargained away without concern. Is patronizing colonialism still the prevalent attitude?

All in all this is a disgusting demonstration of third world politics at it's most sleazy.

"The NL legislature granted those water rights to Quebec on rotten terms…" Uncle: Just a small correction here. The water rights of the WHOLE Churchill river had been already given away (for peanuts) in 1961 to CF(L)Co (then 100% owned by BRINCO) for 99 years! So those water rights (including CF) were gone already, given for free to a consortium of British companies. So BRINCO (NOT HQ) actually is the one that got for free those water rights!

If there is a "deal" with Hydro-Quebec to "develop" Gull Island, here's what will happen:

– every provincial Liberal will lose their seat.
– if the deal is facilitated by the federal government, almost every federal Liberal will lose their seat.
– depending on what Hydro-Quebec has to pay, and what Quebec-only projects get delayed, Couillard may not survive.
– the Aboriginal peoples in Labrador, or at least two of them, will make this year's protests look like a birthday party.
– Labrador separatism will be re-ignited like never before.
– Probably Newfoundland separatism, too.

"An entity to take over and complete the project…" HQ might have the competence/capacity to achieve this (and saving costs), but it is not interested as MF will eventually "dump" (ie below costs)electricity in the US market, and depress US prices even further.

HQ would be in a conflict of interest in taking over MF completion. Any HQ actions/decisions would be meet with extremely high suspicions from NL. So, tThat's a no go!

==> The only way out would be to sell HQ all the MF capacity (except the Emera block + a set Nfld block) for a fair pre-set price. HQ is the most well placed entity to manage efficiently MF operations/production, with its immense grid + reservoirs (including CF).

We have to remember that an agreement has to be WIN-WIN for both Nalcor, and HQ. Otherwise, forget it. Any future HQ discussions will only cover the 2041 deadline…

What did the British ever do but rob its colonies of its resources. In my area of Conception I have read that a small school started in 1839. I was just reading some history on Bermuda, which was colonized about 1619, just after Guys colony at Cupids, In Bermuda, schools were underway by the late 1600s, some 150 years ahead of us. Likewise land grants elsewhere was often hundreds of acres, here, in the mid 1700s to 1800, one acre lots for fishermen planters were the norm. We have been screwed for centuries by the British, and yet we still pay for the Royals to visit here. And we see the French from Quebec as out to do us in! Perhaps we should join the beautiful province if we are to become the happy province. Consider electricity rates of 7 cents instead of 21.4. Sign me up. Or I suppose I could wait 57 years for Muskrat t pay its debts, if ever. And Quebec roots out corruption at times. We just continue to hide it.

(Uncle)"…BRINCO was the developer of the Upper Churchill…"

==> BRINCO was THE OWNER of Upper Churchill, period. (until what, 2060?)

BRINCO actually owned the WHOLE Churchill River water rights for 99 years – Churchill Falls, Muskrat Falls, Gull, and anything in between.

BRINCO was the contracting party in 1969, not NL, because BRINCO totally owned Churchill Falls rights. Period.

BRINCO was only nationalised in 1974. ==> If BRINCO had obtained a better price for CF (lets say 20 times more), NL would have then paid many $ Billions more to nationalise BRINCO in 1974. So no free ride possible here, either. PERIOD.

BRINCO is the one that lost out here, NOT NL! Due to unforeseen energy inflation (as opposed to an expected energy deflation as it was believed in 1969), yes HQ gambled, made a fortune. Who cares!!!

Similarly, if HQ had walked away and built James Bay earlier instead, it would have saved a bundle of $ by totally escaping end of 1970s / beginning of 1980s construction inflation years. (And NL would not have CF for free in 2041).

You can't have it both ways, really.

Its a ungodly mess and an embarrassment to every sane Newfoundlander…….Some one please stop the misery…..

I have a relative who works with an accounting company. Apparently Muskrat was not much of a topic before Marshall announced what a boondoggle it was. Now, they say most Nflders realise what only a few were saying originally, and that it is going to have a terrible impact.

Biographies: http://www.releases.gov.nl.ca/releases/2016/nr/1129n04.aspx

Sadly, Danny's hatred and prejudices were, and still are, shared by too many of the same people who voted him in.

Uncle…the first paragraph is factually inaccurate in that it was Brinco that signed the agreement. The Gov of Nfld did not and was not a signatory to the agreement. The Gov of Nfld did not have any financial risk, and it was substantial, on this project. Why is that important? Because it is a fact and the first paragraph makes it sound as if the Gov of Nfld was in the room negotiating. It is also the narrative that modern-day politicians use to garner nationalistic support.

Looking through the lens of hindsight is easy. While I agree inflation benefited HQ no one could have predicted the levels of inflation that occurred. It is also ironic that inflation (oil prices) also exposed the people of NL to the pie-in-the-sky vision of Williams and his band of useful idiots.

Listened to Ball on CBC TV saying:
Him ans Stan were getting Muskrat back on track. On tract to what. he says we need projects that will pay for health , education etc, but Muskrat is doing the opposite, taking away from other services, while making interest payments the second biggest use of our tax dollars.
He says that we need competitive electricity rates, and they are doing everything possible to mitigate high rates, like export sales. Well 7 billion wasted would drive rates to 16.5 cents, another 8 billion and rates needed is 22 cents or more, so, to keep rates in check, we will spend another 8 billion……..and no worth while export sales for mitigation, and declining island electricity use.
And that they are looking at everything to keep rates in check…EXCEPT .demand management, helping customers with efficiency improvements to reduce their energy consumption……….. anything meaningful in that area (as other jurisdictions do) is off the table, because the business case for MF is to increase demand and energy consumption. But customers are not stupid and are and will step up electricity use reduction. This is common sense that Ball and Stan seem deficient in.

Couldn't Clyde have found anyone under 60 years of age to serve on NALCO Board? Oe a Chair who has not given up on this place?

"…demand management… …efficiency improvements to reduce their energy consumption…"

Believe me, 22 cents rates will induce demand management/electricity consumption reduction big time… (which will then affect Nalcor sales, thus more rate increases to compensate…)

Your flawed logic is that you assume that the more you reduce energy sales the more they will increase rates. Same as assuming the more you reduce purchase of beef the more they will charge for beef.
Nalcor and governments logic is that they have consumers over a barrel and will use just as much (or almost as much) electricity at any price.They assume a price of 15.5 cents will result in a elasticity effect going from 0.2 to 0.3, so a modest decrease. They may be low on this 0.3 figure (Vardy suggests 0.5, and it may be higher) but rates of 22 cents will cause a drastic drop off in sales. For that reason, I believe rates will not be above 16 or 17 cents regardless of the need for 22 cents or more. The burden will be loaded to income tax , or other service reductions.
Point being that one might argue that demand reduction is counter productive. True , demand reduction is inconsistent with Muskrat. But if there is considerable demand reduction and they accept that there will be such demand reduction, that it would make sense not to waste another 8 billion on this boondoggle, then demand reduction is our friend. If there are little if any profitable export sales, and also reasonable certainity that there will be a large demand reduction on the island, then this boondoggle continues and worsens. Demand reduction and putting Muskrat on ice , as Uncle Gnarley suggest,is the only way to limit the exposure to more debt and reduction of services and increased taxes. Even Ball say rates need to be competitive, so they will not increase beyond what people can afford. If competitive rates was considered prior to sanction, sanction would never have occurred. So they are now in denial with the view that we are too far in to turn back. That continued waste assures more , not less, demand reduction will occur. Well, my confidence rate, that there will be a very large demand reduction is at least 95 percent. And the fact that demand reduction has been a corner stone of other jurisdictions to keep customers costs in check is not accidental. Here it is a foreign concept! How can there be such ignorance as to what others are doing.

As I understand it, the total annual energy output of MF is approximately 4.8 terawatt hours(twh). It was reported by media in early November that the previous government and Nalcor had agreed to give Emera fully 1/3( approx. 1.6 twh ) of this energy for a period of 35 years for building the 1.6 billion dollar Maritime Link, a bargain for sure! That leaves 3.2 terawatt hours of which up to another approximately 1/3( 1.6 twh ) could be sold in Nova Scotia for market rates. I understand that the Maritime link is designed to carry 2/3 of the MF output. Up to the remaining 1.6 terawatt hours could be used in Labrador which could then free up a quantity of up to the energy equivalent of the 300 Megawatts of available recall power from the upper CF plant to be sold through existing arrangements already in place with Emera and HQ by wheeling this power and energy over the Hydro Quebec system to the maritimes. This could reduce the requirement for tax revenue being used to subsidize rates to keep them affordable to residents and competitive for businesses. The foregoing assume MF can be completed to hold water and thereby produce power and energy.

"…sell 300 MW recall power… …through existing arrangements… …over the Hydro Quebec system"

Actually, Nalcor may wheel thru a bigger amount of power (from MF) over HQ system if it wishes so => as long as HQ's 3 existing 735kv power lines HAVE enough spare capacity at the time (obviously, not so much during the winter peak).

In northeastern US/Canada, there are agreements in place to ensure that fair – pre-set – fees are paid when using anyone's grid for export.

Following the 1998 framework agreement of the Tobin/Bouchard initiates, the 3 year notice period for recall of the unused portion, approx. 130MW, of the 300 MW provided for in the infamous 1969 contract was waived as part of other agreements including the increased capacity agreement known as GWAC and the shareholders agreement.
However, please give us a break, the record to date shows that HQ has steadfastly shown itself to be incapable of giving us the break we need and deserve, and that is a fairer share of our resource!

Well in 1927, the British expropriated Québec from Labrador without any compensation.

The Dominion of Canada did not bother/cared to defend Québec against this British annexion (for its colony). So, I would take with a grain of salt any Canadian Prime Minister comments about on CF.

(Nfld was smart to take it and run in 1927, anyone would have done the same).

So, when we talk about decency/most elementary spirit of justice, does it apply only to the year 1969, or we can go back to the root cause in 1927?

(And Nfld keeps shicking it to Québec ever since, plus all the Québec bashing. And we now complain about the lack of generosity of from HQ? What are we smoking here?)

Then we should include the Québec Act of 1774 as well, where Quebecers agreed to not side with the american – to kick anything british out of North America (=> With this continious "love" from Canadian, maybe that was not such a wise decision afterall)

1774 Québec Act:

-The province's territory was expanded to take over part of the Indian Reserve, including much of what is now southern Ontario, Illinois, Indiana, Michigan, Ohio, Wisconsin, and parts of Minnesota.

-Reference to the Protestant faith was removed from the oath of allegiance.

-It guaranteed free practice of the Catholic faith.

-It restored the use of the French civil law for matters of private law, except that in accordance with the English common law, it granted unlimited freedom of testation. It maintained English common law for matters of public law, including administrative appeals, court procedure, and criminal prosecution.

-It restored the Catholic Church's right to impose tithes.