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01 March 2013
From VOCM website:- "The Globe and Mail is reporting that mining giant Rio Tinto has started the process of selling its majority stake in the Iron Ore Company of Canada, the country's largest mining company."
So, while Nalcor/government is speculatively spending billions of the people's money in part to meet the so-called power needs of the mining giants in Labrador, Rio Tinto is selling off.
UNBELIEVABLE
27 February 2013
Excerpt from National Post article :--- "Canada's former spy watchdog, ex-SNC:Lavalin CEO now wanted men in Quebec as fraud probe widens" [http://news.nationalpost.com/2013/02/27/canadas-former-spy-watchdog-arthur-porter-now-a-wanted-man-in-quebec-as-fraud-probe-widens/] "The arrest warrant alleges that Dr. Porter, 56, and Mr. Elbaz, 44, accepted a payment or benefit from former SNC-Lavalin executives Pierre Duhaime and Riadh Ben Aissa sometime between Oct. 16, 2008 and Aug. 31, 2011.
Mr. Duhaime, 58, who was chief executive of SNC-Lavalin at the time of the alleged infractions, and Mr. Ben Aissa, 54, who led the company’s construction business worldwide, were charged last November with fraud and using forged documents in connection with the hospital contract."
[I wonder who was the SNC-Lavalin CEO when SNC-Lavalin was contracted to virtually 'control' the multi-billion dollar Muskrat Falls project?.
Do I, as a voter, a ratepayer, a taxpayer, a citizen of Newfoundland and Labrador [in this open and transparent (sic) democracy] have a right to access that information? ------- IF NOT, WHY NOT? ]
25 February 2013
Quote from the Globe and Mail, 25 February 2013 "True innovation doesn't flow from a pipeline" :----- "Last week, PricewaterhouseCoopers predicted that the coming boom in global shale oil production could slash the price of crude by $50 (U.S.) a barrel over the next two decades"
Go to the PriceWaterhouseCoopers --- "Shale oil changes energy markets" (link below) and also see summary excerpt below:
"Shale oil: the next energy revolution Download
22 February 2013
"SNC-Lavalin in Bangladesh, world bank sees conspiracy" (Globe and Mail)
http://www.theglobeandmail.com/report-on-business/snc-lavalin-in-bangladesh-world-bank-sees-conspiracy/article8963225/
21 February 2013
"SNC bribery probe widens to Algeria" (Globe and Mail)
http://www.theglobeandmail.com/report-on-business/snc-bribery-probe-widens-to-algeria/article8907906/
15 February 2013
Oil prices could drop by 40% :---- http://arabnews.com/shale-oil-could-slash-crude-price-40
Also, see this excerpt from today's Sir Robert Bond Papers :-----
"The finance minister forecast a $1.6 billion deficit for a budget he will deliver in a couple of months. This is not an amount you can easily hack out of any budget. To help understand how much money this is, look at Budget 2012. In order to cut $1.6 billion from the budget you would have to wipe out the education department completely, plus take out natural resources, agriculture, trade, industry and tourism and then find another couple of hundred million besides."
http://bondpapers.blogspot.ca/2013/02/if-next-two-years-are-bad-nlpoli.html
11 February 2013
"Former SNC-Lavalin chief charged with fraud" (closer to home)
http://www.theglobeandmail.com/report-on-business/former-snc-lavalin-chief-duhaime-formally-charged-with-fraud/article8448126/
09 February 2013
Canadian National has put the brakes on its estimated $5 BILLION northern Quebec railway line saying "There's a pause because we're evaluating certain timetables and it also has something to do with some projects of mining companies that they seem to have put a hold on at the moment"
http://www.theglobeandmail.com/globe-investor/cn-puts-on-hold-northern-quebec-railway-project/article8401752/
So much for the 10's of billions in Quebec/Labrador mining developments and urgent need for Muskrat Falls power.
07 February 2013
Radio interview with Nova Scotia's Todd McDonald re the Maritime Link http://www.cbc.ca/mainstreetns/
http://www.cbc.ca/mainstreetns/
06 February 2013
Brad Cabana's "Case Against Nalcor" http://rocksolidpolitics.blogspot.ca/
26 January 2013
COMMENT BY Winston Adams- January 26, 2013 at 12:20:04 TIED TO MY "Playing with power numbers" letter published in The Telegram (see LINK, BELOW) :--- I listened to a caller on Vocm who was previously on the board of Nfld Hydro. He said that the transmission lines coming to the Avalon from central cannot handle the load on this end. We have 2-230 kv lines doing that . A line is designed for a certain capacity, and as it gets loaded up a larger percentage of the power gets lost ( in a sense heating the atmosphere). For example, if transmitting 1000 MW, a transmission loss of 7 percent is 70 MW lost ( just avout enough to supply Vale Inco at Long Hr) or thousands of houses in St John's. A third line would give more transmission capacity and also reduce line losses. The caller to Vocm said the third line plan was scuttled. It seems they gambled on MF and to use Holyrood as backup, despite the oil consumption. St. John's is at the extreme end of our power grid, and is vulernable to transmission line reliability and line losses. Line losses is an important reason Holyrood is where it is, near the main load, and a shorter distance and therefore less risk to icing damage to transmission lines. And these factors are a disadvantage for MF, all in the weighing of risks. MF has many more risk including salt in the Alpine region, GIC (geomagnetic induced currents) and other risks. So our on island hydro is the main reliable source of power, and the more of it that gets to the St Johns region the better. The question you pose should be answered by Nalcor. How much island hydro is stranded by insuffiicient transmission capacity to St Johns? Is a third line cost effective? How much oil cost would it have saved the past 5 years and the next 5? Even with MF, with a MF failure, can we get sufficient island hydro to St Johns? These are reasonable questions the media should put to Nalcor or Hydro. They won't respond to questions posed by citizens or ratepayers. So the media must pose questions that are deserving of answers. In the end, power reliability affects everyone. John Smith's statement that we are using every scrap of power we can to meet demand seems intended to confuse the isssue and not answer the question. Certainly we cannot exceed the safe capacity of the lines, but should we have had another line? The issue is not conspiracy theory, but proper planning and risk avoidance. Not a laughing matter John. When is potential power shortages a laughing matter? Hydro officials warned of this, People didn't laugh, but were very concerned. And John blames the age of the Holyrood assets! Remember too , that the plan is to use those same generators at Holyrood even when MF comes on stream. The generators will not stop, they will be used as for voltage support, but without the oil burning. Perhaps John could explain his view that this equipment is obselete and Nalcor plan to use if for voltage support?
Also, see the National Post article regarding alleged SNC-Lavalin bribes:--
http://news.nationalpost.com/2013/01/25/an-amicable-and-mutually-beneficial-relationship-snc-lavalin-bribed-their-way-into-plump-gaddafi-era-contracts-documents-allege/
25 January 2012
$160 million in kickbacks
http://news.nationalpost.com/2013/01/25/millions-in-snc-lavalin-bribes-bought-gaddafi-son-luxury-yachts-unsealed-rcmp-documents-allege/
---------------------------------
Also, the island's Peak Demand (MW) for the last 10 years : ------ 2003 (1,595)--- 2004 (1,598)--- 2005 (1,595)--- 2006 (1,517)--- 2007 (1,540)--- 2008 (1,520)--- 2009 (1,601)--- 2010 (1,478) --- 2011 (1,544) ---- 2012 (1,550) ------- 4 MW BELOW our 10-year average, 21 MW BELOW Nalcor's forecast for year 2012, and the island's already existing installed NET capacity is 1,958 MW.
"Playing with power numbers", Maurice E. Adams, The Telegram:-- http://www.thetelegram.com/Opinion/Letters-to-the-editor/2013-01-25/article-3163674/Playing-with-power-numbers/1
24 January 2012
Not including Holyrood, the existing installed NET power generation capacity on the island is 1,500 megawatts, while the 2012 PEAK DEMAND was 1,550 megawatts -- a shortfall of only 50 megawatts.
Why then is Nalcor using 2 (and sometimes 3) large oil-fired generators at Holyrood producing more than 300 and up to 466 megawatts of power to cover off a 50 megawatt shortfall? Why is it that our already existing non-Holyrood generation capacity is not being used to its fullest --- before firing up Holyrood?
22 January 2012
The island's 'peak demand' for year 2012 was 1,550 MW (up only 6 MW from last year --- a 0.38% increase over last year, and 21 MW BELOW Nalcor's year 2010 forecast of 1,571 MW for year 2012). Our existing installed NET capacity is 1,958 MW.
Also,
See link to Wangersky's Telegram article for more Muskrat info:-
http://www.thetelegram.com/Opinion/Columns/2013-01-22/article-3161171/Something%26rsquos-missing-here/1#Comments
15 January 2013
Emera CEO comment regarding Muskrat Falls power (Jan. 10, 2013) : ----- " We have not signed anything that would obligate Nova Scotia customers to take this energy "
http://thechronicleherald.ca/business/410655-taylor-emera-s-growing-power-raises-worries-about-future-bills#.UPSJu8GzhWQ.mailto
12 January 2013
"Even the best design have flaws", Russell Wangersky, The Weekend Telegram
http://www.thetelegram.com/Opinion/Columns/2013-01-12/article-3155251/Even-the-best-design-have-flaws/1
COMMENT MADE BY WINSTON ADAMS on the above-noted article:-
Winston Adams- January 12, 2013 at 14:10:37 Russell, you say, as to whether we actually NEED the power from Muskrat Falls, "the question has never been objectively answered outside of Hydro's own forecasts..... which don't have a great history of accuracy". Now JM, an economist, had a lengthy presentation to the PUB, that the forocast was biased and unreliable. He pointed to our aging and no growth population, being not properly considered. Feehan, another economist put reasoned arguments against the need of more power. Maurice Adams, on his Vision 2041 website has presented the charts of Hydro's flawed forecast record, and has correctly stated that new houses use less energy than old ones, despite being larger. Even economist Wade Locke stated the economics of MF is questionable and subject to the island forecast holding up. Sullivan, Martin and others have questioned the forecast. I filed a submission to the PUB dealing specifically with that issue, showing that efficiency opportunities were substancial. The Telegram later published 3 pieces showing my analysis from an engineering and mathematics perspective that the efficiency potential was 4 times the present average production of Holyrood, and was so economic as to hold steady or decrease costs to consumers. What was not objective about that analysis. I could not engage Nalcor, journalists, media, or MHAs to open up the issue. When you refer to objective analysis you likey mean a significant study, of this and other considerations. Certainly, I could get no details of Nalcor's efficiency considerations before the MF project was sanctioned. Was it a flawed debate by not properly analysing the need for power, before proceeding with the question of what the source of power would be? Certainly it was flawed, and I suggest deliberately so by the government and Nalcor, who preferred to go with MF whether we need the power on the island or not, as the rationale kept changing. Is it like flogging a dead horse to discuss this need for power now? I would say it is late but appropriate to discuss it. Nalcor has just awarded a contract exceeding 100 million for excavation. But Nfld Power is pushing ahead seeking 8.0 percent increase on residential energy rates. Look at their application. See their reduction to normal forecast due to future declining population, and aging population. See the negative impact on power use with the price increase requested, and superimpose this on what effect another 30 or 40 percent increase will do to load growth. You can see Nfld Power's analysis supports the objective statements made by JM and others. Then look at the Application from the perspective of energy efficiency savings. Also note their concern about having little access to alternative power sources, other than Hydro. You will see we are on a path that separates us from all oher progressive utilities. Others put 5 to ten times more resources into the efficiency and conservation approach with real significant benefits for consumers. This Application confirms a path, with little efficiency effort, to prop up power demand.The negative consequences of not doing a comprehensive analysis of whether ne need more power will rattle our economy and worry all power consumers for a long time. This is but the first of many post MF sanction price hikes. Lets brace ourselves for that. It may not be too late, but Nalcor is certainly ramping up expenses. I hope it doesn't turn out like Joey's follies. Certainly,as the costs esculates, more and more it will be asked "did we need that power for the island'. Meanwhile , in Nova Scotia, their Efficiency Corporation is flying the banner "Home Heating Revolution. Oppressed by the high cost of heating your home? Citizens of Nova Scotia- affordability and comfort are yours for the taking!" And yet such a revolution is technically possible much more easily here. So, I suggest, lets kick the dead horse. What harm is that. We need to know if horse is really dead. Electrical power is rated in terms of horses. And 45 percent of our present horsepower is wasted. Our horses have much more to give. With due attention, our electrical horses are far from exhausted. Where is the proof? Where was that objective study? That is the Question.
My comment earlier today (also on Wangersky's article):-
Russel Wangersky's article in today's Weekend Telegram is nicely written.......... I do think however, that he has it backwards --- I would suggest that "The decision on Muskrat Falls, for better or worse, was made" FIRST, ------ THEN "government accepted the premise that electrical consumption in this province would rise — and that there was nothing that could be done to slow that rate of increase." --------- A means to justify the end. ........The decision was made in 2010 (or earlier) and then government set about creating the various and continually changing justifications and rationale for its decision. ... Almost like 'reverse engineering', where you already have the end product, and then you work backwards so as to include all the elements needed to create the product while discarding all those that don't.,,,,,,,, Kennedy's approach in the House was similar ---- where, instead of keeping an open mind while grasping and arriving at an understanding of whether or not Muskrat Falls was the best option, he said instead that he approached Muskrat Falls by FIRST convincing himself that it was the best option and then went about selling it to the people (the very opposite of a rational, scientific, objective approach)....... The process has, from the beginning, been designed to push Muskrat Falls through --- whether it was and is in the best interest of the people and the province ---- or not ----- whether we need the power ----- or not, whether we can afford it --- or not. ........ NONE OF THAT MATTERS ---- PERIOD.
08 January 2013
We all know Brazil is a very rainy/tropical place. However, today's Globe and Mail reports that the stock market there is taking a beating and Brazil is rationing electricity because low rainfall has meant not enough water to run their hydroelectric generation plants. With global warming, where will the hydro potential for Muskrat Falls be in a decade or so?
Also, the Federal Court has today ruled that Metis rights and entitlements come under the jurisdiction of the federal government. How will this impact on Muskrat Falls, in that Muskrat Falls is within NunatuKavut's land claims area, and has Nalcor/government satisfied its aboriginal obligations pursuant to Bil 61?
05 January 2013
It seems that there is a good chance that Muskrat Falls power will never be exported to the U.S.----- the so-called Water Management Agreement between Nalcor and its subsidiary, CFL-Co, (with itself) is highly suspect and may be in conflict with the 1969 Quebec contract ----- the advertised 824 MW of power, which has since been reported to be an average of only 570 MW, is suspect ----------- the forecast demand on which the very viability of Muskrat Falls depends (an island demand of 0.8% compounded yearly FOR 50 YEARS) is suspect -------- the argument that we need MORE POWER is suspect (40% of 570MW is only 228MW ---- which is less than half our already existing installed and only partially used NET capacity of Holyrood --- which is 466MW) --- the rates for Muskrat Falls power is highly suspect and will likely be much HIGHER THAN government is saying (ratepayers MUST PAY whatever is needed to pay the Muskrat Falls multi-billion dollar cost/debt)........ the original cost of $6.2 billion is highly suspect and when interest costs during construction and cost overruns are included will likely be $12 billion or more (it is already up around $9 billion)........ I could go on and on, but in short, Muskrat Falls is unneeded, uneconomic, and needs to be halted pending an objective and detailed review.
04 January 2013
I note that the Sir Robert Bond Papers blog is asking for Consumer Advocate (Tom Johnson) to resign his position.
Why isn't Tom Johnson asking why Nalcor/government will be taking $20 billion in revenue/dividends (over and above Muskrat Falls debt servicing and operating costs) out of the pockets of ratepayers over the next 50 years (according Minister Tom Marshall)?
What rate of return is that for Nalor/government?
Why isn't Tom Johnson speaking up for ratepayers, instead of paying lip-service to the job?
Hydro Quebec has more than the equivalent of Muskrat Falls power (and the Romaine will soon be coming on stream) that will be difficult to sell.
Why isn't Tom Johnson demanding that Nalcor negotiate an early access to Upper Churchill power to meet our needs? Since the market is poor at present for HQ's excess power, don't you think HQ would be willing to provide this province early access to the power we need to get us to 2041? Provided Nalcor would agree to have the equivalent amount of power returned to HQ after 2041 when markets may be better for them?
That would be a win/win situation for both HQ and NL.
NL ratepayers could then save the $29 billion cost (over 50 years) for the Muskrat Falls dam/generation facility (the transmission line cost is only $6 billion over 50 years).
The Muskrat Falls dam/generation facility is a totally unneeded and uneconomic project and should be halted.
26 December 2012
RATEPAYER PROTECTION?
Now that the Public Utilities Board (PUB) is largely out of the picture, how are ratepayers protected?
Is there a need for an independent Ratepayers Association?
The passage of Bill 61 has driven a huge nail in the coffin of ratepayers' rights (and Bill 61 will ensure that there are unnecessarily high electricity bills).
For decades, the Electrical Power Control Act (EPCA) required that the supply, development and distribution of power to consumers would be at "the lowest possible cost consistent with reliable service".
However, Bill 61 has given Cabinet the legislative authority to usurp the rights that ratepayers had previously enjoyed and that were assured by the various provisions of the province's Electrical Power Control Act.
Bill 61 allows Cabinet (at its sole discretion) to direct the Public Utilities Board (PUB) to disregard the EPCA legislated "lowest possible cost" policy requirement (up to now, government has used an "exemption" Order and the "least cost", rather than 'lowest possible cost' slight-of-hand to bypass the 'lowest possible cost' requirement).
Bill 61 now also allows Cabinet (at its sole discretion) to usurp many of the most important rights, authorities, responsibilities and duties of the Public Utilities Board --- thereby effectively neutering the Public Utilities Board, preventing it from protecting the rights (and preventing it from looking out for the best interest) of ratepayers. Now it is ratepayers who must subsidize industrial customers, Nova Scotians and beyond.
Furthermore, the government-appointed Consumer Advocate has been ineffective in preventing these changes (and in fact, supported the Muskrat Falls project and its locked-in, escalating, 50-year, take or pay hidden tax contract).
Accordingly, in order to protect householders/ratepayers, is it now time for an independent "Ratepayers Association", an organization properly structured, ratepayer-funded and managed, and that will stand up for ratepayers' rights --- stand up for their best interests?
A Ratepayers Association could not only lobby government and represent ratepayers at PUB hearings, but a Ratepayers Association would be able to provide information and advice to ratepayers on a range of energy related legislative, regulatory, policy and pricing matters, from "Cost of Service" vs "Power Purchase Agreement" (take or pay) pricing schemes, best practices (engineering, reliability, etc.), other power options, new technologies, energy efficiency, proposed rate increases, demand forecasts, government energy conservation programs, etc., etc.
There are approximately 240,000 households/ratepayers in the province, and a not-for-profit Ratepayers Association (with a board of directors responsible solely to ratepayers), funded perhaps through a small annual fee of $5 to $10, would have considerable influence and would be able to help ensure that ratepayers' rights (and best interests) are represented and protected.
Unchallenged, NL ratepayers will be on the receiving end of a Muskrat Falls, multi-billion dollar TAX GRAB. Ratepayers will subsidize power (for at least 35 years) to mining companies, to the Maritime provinces and potentially to the eastern U.S.
There are better (and lower cost) power supply, development and distribution options, options that are potentially able to provide ratepayers with decreasing, rather than yearly escalating, locked-in prices for 50 years (there are ways that householders/ratepayers can on average pay a thousand, and perhaps even several thousand dollars each and every year LESS THAN the BILLIONS (cumulatively) that Minister Marshall says Muskrat Falls will take out of the pockets of ratepayers over the next 50 years).
The info-graphic below shows that over the next 50 years Nalcor/Government will extract (UNNECESSARILY) about $35 billion from ratepayers' pockets, their children, and grandchildren --- and Premier Dunderdale is also now hinting at higher taxes (most likely on low and middle income earners) in order to deal with the province's deficit, a large part of which is caused by Muskrat Falls.
So --- is exploring the need for an independent Ratepayers Association a worthwhile endeavour?
Or is there another way to shed light on, and lessen the impact of, Muskrat Madness?
CLICK IMAGE TO ENLARGE
From VOCM website:- "The Globe and Mail is reporting that mining giant Rio Tinto has started the process of selling its majority stake in the Iron Ore Company of Canada, the country's largest mining company."
So, while Nalcor/government is speculatively spending billions of the people's money in part to meet the so-called power needs of the mining giants in Labrador, Rio Tinto is selling off.
UNBELIEVABLE
27 February 2013
Excerpt from National Post article :--- "Canada's former spy watchdog, ex-SNC:Lavalin CEO now wanted men in Quebec as fraud probe widens" [http://news.nationalpost.com/2013/02/27/canadas-former-spy-watchdog-arthur-porter-now-a-wanted-man-in-quebec-as-fraud-probe-widens/] "The arrest warrant alleges that Dr. Porter, 56, and Mr. Elbaz, 44, accepted a payment or benefit from former SNC-Lavalin executives Pierre Duhaime and Riadh Ben Aissa sometime between Oct. 16, 2008 and Aug. 31, 2011.
Mr. Duhaime, 58, who was chief executive of SNC-Lavalin at the time of the alleged infractions, and Mr. Ben Aissa, 54, who led the company’s construction business worldwide, were charged last November with fraud and using forged documents in connection with the hospital contract."
[I wonder who was the SNC-Lavalin CEO when SNC-Lavalin was contracted to virtually 'control' the multi-billion dollar Muskrat Falls project?.
Do I, as a voter, a ratepayer, a taxpayer, a citizen of Newfoundland and Labrador [in this open and transparent (sic) democracy] have a right to access that information? ------- IF NOT, WHY NOT? ]
25 February 2013
Quote from the Globe and Mail, 25 February 2013 "True innovation doesn't flow from a pipeline" :----- "Last week, PricewaterhouseCoopers predicted that the coming boom in global shale oil production could slash the price of crude by $50 (U.S.) a barrel over the next two decades"
Go to the PriceWaterhouseCoopers --- "Shale oil changes energy markets" (link below) and also see summary excerpt below:
"Shale oil: the next energy revolution Download
- The global impact of shale oil could revolutionise the world’s energy markets over the next couple of decades, resulting in significantly lower oil prices, higher global GDP, changing geopolitics and shifting business models for oil and gas companies, according to new analysis from PwC.
- The potential availability and accessibility of significant resources of shale oil around the globe - and the potential effect of increased shale oil production in limiting growth in global oil prices - has implications that stretch far beyond the oil industry.
- Shale oil has the potential to reshape the global economy, increasing energy security, independence and affordability in the long term. However, these benefits need to be squared with broader environmental objectives at both the local and global level.
- The effects of a lower oil price resonate along the entire energy value chain, and investment choices based on long-term predictions of a steady increase in real oil prices may need to be reassessed. The potential magnitude of the impact of shale oil makes it a profound force for change in energy markets and the wider global economy. It is therefore critical for companies and policy-makers to consider the strategic implications of these changes now."
22 February 2013
"SNC-Lavalin in Bangladesh, world bank sees conspiracy" (Globe and Mail)
http://www.theglobeandmail.com/report-on-business/snc-lavalin-in-bangladesh-world-bank-sees-conspiracy/article8963225/
21 February 2013
"SNC bribery probe widens to Algeria" (Globe and Mail)
http://www.theglobeandmail.com/report-on-business/snc-bribery-probe-widens-to-algeria/article8907906/
15 February 2013
Oil prices could drop by 40% :---- http://arabnews.com/shale-oil-could-slash-crude-price-40
Also, see this excerpt from today's Sir Robert Bond Papers :-----
"The finance minister forecast a $1.6 billion deficit for a budget he will deliver in a couple of months. This is not an amount you can easily hack out of any budget. To help understand how much money this is, look at Budget 2012. In order to cut $1.6 billion from the budget you would have to wipe out the education department completely, plus take out natural resources, agriculture, trade, industry and tourism and then find another couple of hundred million besides."
http://bondpapers.blogspot.ca/2013/02/if-next-two-years-are-bad-nlpoli.html
11 February 2013
"Former SNC-Lavalin chief charged with fraud" (closer to home)
http://www.theglobeandmail.com/report-on-business/former-snc-lavalin-chief-duhaime-formally-charged-with-fraud/article8448126/
09 February 2013
Canadian National has put the brakes on its estimated $5 BILLION northern Quebec railway line saying "There's a pause because we're evaluating certain timetables and it also has something to do with some projects of mining companies that they seem to have put a hold on at the moment"
http://www.theglobeandmail.com/globe-investor/cn-puts-on-hold-northern-quebec-railway-project/article8401752/
So much for the 10's of billions in Quebec/Labrador mining developments and urgent need for Muskrat Falls power.
07 February 2013
Radio interview with Nova Scotia's Todd McDonald re the Maritime Link http://www.cbc.ca/mainstreetns/
http://www.cbc.ca/mainstreetns/
06 February 2013
Brad Cabana's "Case Against Nalcor" http://rocksolidpolitics.blogspot.ca/
26 January 2013
COMMENT BY Winston Adams- January 26, 2013 at 12:20:04 TIED TO MY "Playing with power numbers" letter published in The Telegram (see LINK, BELOW) :--- I listened to a caller on Vocm who was previously on the board of Nfld Hydro. He said that the transmission lines coming to the Avalon from central cannot handle the load on this end. We have 2-230 kv lines doing that . A line is designed for a certain capacity, and as it gets loaded up a larger percentage of the power gets lost ( in a sense heating the atmosphere). For example, if transmitting 1000 MW, a transmission loss of 7 percent is 70 MW lost ( just avout enough to supply Vale Inco at Long Hr) or thousands of houses in St John's. A third line would give more transmission capacity and also reduce line losses. The caller to Vocm said the third line plan was scuttled. It seems they gambled on MF and to use Holyrood as backup, despite the oil consumption. St. John's is at the extreme end of our power grid, and is vulernable to transmission line reliability and line losses. Line losses is an important reason Holyrood is where it is, near the main load, and a shorter distance and therefore less risk to icing damage to transmission lines. And these factors are a disadvantage for MF, all in the weighing of risks. MF has many more risk including salt in the Alpine region, GIC (geomagnetic induced currents) and other risks. So our on island hydro is the main reliable source of power, and the more of it that gets to the St Johns region the better. The question you pose should be answered by Nalcor. How much island hydro is stranded by insuffiicient transmission capacity to St Johns? Is a third line cost effective? How much oil cost would it have saved the past 5 years and the next 5? Even with MF, with a MF failure, can we get sufficient island hydro to St Johns? These are reasonable questions the media should put to Nalcor or Hydro. They won't respond to questions posed by citizens or ratepayers. So the media must pose questions that are deserving of answers. In the end, power reliability affects everyone. John Smith's statement that we are using every scrap of power we can to meet demand seems intended to confuse the isssue and not answer the question. Certainly we cannot exceed the safe capacity of the lines, but should we have had another line? The issue is not conspiracy theory, but proper planning and risk avoidance. Not a laughing matter John. When is potential power shortages a laughing matter? Hydro officials warned of this, People didn't laugh, but were very concerned. And John blames the age of the Holyrood assets! Remember too , that the plan is to use those same generators at Holyrood even when MF comes on stream. The generators will not stop, they will be used as for voltage support, but without the oil burning. Perhaps John could explain his view that this equipment is obselete and Nalcor plan to use if for voltage support?
Also, see the National Post article regarding alleged SNC-Lavalin bribes:--
http://news.nationalpost.com/2013/01/25/an-amicable-and-mutually-beneficial-relationship-snc-lavalin-bribed-their-way-into-plump-gaddafi-era-contracts-documents-allege/
25 January 2012
$160 million in kickbacks
http://news.nationalpost.com/2013/01/25/millions-in-snc-lavalin-bribes-bought-gaddafi-son-luxury-yachts-unsealed-rcmp-documents-allege/
---------------------------------
Also, the island's Peak Demand (MW) for the last 10 years : ------ 2003 (1,595)--- 2004 (1,598)--- 2005 (1,595)--- 2006 (1,517)--- 2007 (1,540)--- 2008 (1,520)--- 2009 (1,601)--- 2010 (1,478) --- 2011 (1,544) ---- 2012 (1,550) ------- 4 MW BELOW our 10-year average, 21 MW BELOW Nalcor's forecast for year 2012, and the island's already existing installed NET capacity is 1,958 MW.
"Playing with power numbers", Maurice E. Adams, The Telegram:-- http://www.thetelegram.com/Opinion/Letters-to-the-editor/2013-01-25/article-3163674/Playing-with-power-numbers/1
24 January 2012
Not including Holyrood, the existing installed NET power generation capacity on the island is 1,500 megawatts, while the 2012 PEAK DEMAND was 1,550 megawatts -- a shortfall of only 50 megawatts.
Why then is Nalcor using 2 (and sometimes 3) large oil-fired generators at Holyrood producing more than 300 and up to 466 megawatts of power to cover off a 50 megawatt shortfall? Why is it that our already existing non-Holyrood generation capacity is not being used to its fullest --- before firing up Holyrood?
22 January 2012
The island's 'peak demand' for year 2012 was 1,550 MW (up only 6 MW from last year --- a 0.38% increase over last year, and 21 MW BELOW Nalcor's year 2010 forecast of 1,571 MW for year 2012). Our existing installed NET capacity is 1,958 MW.
Also,
See link to Wangersky's Telegram article for more Muskrat info:-
http://www.thetelegram.com/Opinion/Columns/2013-01-22/article-3161171/Something%26rsquos-missing-here/1#Comments
15 January 2013
Emera CEO comment regarding Muskrat Falls power (Jan. 10, 2013) : ----- " We have not signed anything that would obligate Nova Scotia customers to take this energy "
http://thechronicleherald.ca/business/410655-taylor-emera-s-growing-power-raises-worries-about-future-bills#.UPSJu8GzhWQ.mailto
12 January 2013
"Even the best design have flaws", Russell Wangersky, The Weekend Telegram
http://www.thetelegram.com/Opinion/Columns/2013-01-12/article-3155251/Even-the-best-design-have-flaws/1
COMMENT MADE BY WINSTON ADAMS on the above-noted article:-
Winston Adams- January 12, 2013 at 14:10:37 Russell, you say, as to whether we actually NEED the power from Muskrat Falls, "the question has never been objectively answered outside of Hydro's own forecasts..... which don't have a great history of accuracy". Now JM, an economist, had a lengthy presentation to the PUB, that the forocast was biased and unreliable. He pointed to our aging and no growth population, being not properly considered. Feehan, another economist put reasoned arguments against the need of more power. Maurice Adams, on his Vision 2041 website has presented the charts of Hydro's flawed forecast record, and has correctly stated that new houses use less energy than old ones, despite being larger. Even economist Wade Locke stated the economics of MF is questionable and subject to the island forecast holding up. Sullivan, Martin and others have questioned the forecast. I filed a submission to the PUB dealing specifically with that issue, showing that efficiency opportunities were substancial. The Telegram later published 3 pieces showing my analysis from an engineering and mathematics perspective that the efficiency potential was 4 times the present average production of Holyrood, and was so economic as to hold steady or decrease costs to consumers. What was not objective about that analysis. I could not engage Nalcor, journalists, media, or MHAs to open up the issue. When you refer to objective analysis you likey mean a significant study, of this and other considerations. Certainly, I could get no details of Nalcor's efficiency considerations before the MF project was sanctioned. Was it a flawed debate by not properly analysing the need for power, before proceeding with the question of what the source of power would be? Certainly it was flawed, and I suggest deliberately so by the government and Nalcor, who preferred to go with MF whether we need the power on the island or not, as the rationale kept changing. Is it like flogging a dead horse to discuss this need for power now? I would say it is late but appropriate to discuss it. Nalcor has just awarded a contract exceeding 100 million for excavation. But Nfld Power is pushing ahead seeking 8.0 percent increase on residential energy rates. Look at their application. See their reduction to normal forecast due to future declining population, and aging population. See the negative impact on power use with the price increase requested, and superimpose this on what effect another 30 or 40 percent increase will do to load growth. You can see Nfld Power's analysis supports the objective statements made by JM and others. Then look at the Application from the perspective of energy efficiency savings. Also note their concern about having little access to alternative power sources, other than Hydro. You will see we are on a path that separates us from all oher progressive utilities. Others put 5 to ten times more resources into the efficiency and conservation approach with real significant benefits for consumers. This Application confirms a path, with little efficiency effort, to prop up power demand.The negative consequences of not doing a comprehensive analysis of whether ne need more power will rattle our economy and worry all power consumers for a long time. This is but the first of many post MF sanction price hikes. Lets brace ourselves for that. It may not be too late, but Nalcor is certainly ramping up expenses. I hope it doesn't turn out like Joey's follies. Certainly,as the costs esculates, more and more it will be asked "did we need that power for the island'. Meanwhile , in Nova Scotia, their Efficiency Corporation is flying the banner "Home Heating Revolution. Oppressed by the high cost of heating your home? Citizens of Nova Scotia- affordability and comfort are yours for the taking!" And yet such a revolution is technically possible much more easily here. So, I suggest, lets kick the dead horse. What harm is that. We need to know if horse is really dead. Electrical power is rated in terms of horses. And 45 percent of our present horsepower is wasted. Our horses have much more to give. With due attention, our electrical horses are far from exhausted. Where is the proof? Where was that objective study? That is the Question.
My comment earlier today (also on Wangersky's article):-
Russel Wangersky's article in today's Weekend Telegram is nicely written.......... I do think however, that he has it backwards --- I would suggest that "The decision on Muskrat Falls, for better or worse, was made" FIRST, ------ THEN "government accepted the premise that electrical consumption in this province would rise — and that there was nothing that could be done to slow that rate of increase." --------- A means to justify the end. ........The decision was made in 2010 (or earlier) and then government set about creating the various and continually changing justifications and rationale for its decision. ... Almost like 'reverse engineering', where you already have the end product, and then you work backwards so as to include all the elements needed to create the product while discarding all those that don't.,,,,,,,, Kennedy's approach in the House was similar ---- where, instead of keeping an open mind while grasping and arriving at an understanding of whether or not Muskrat Falls was the best option, he said instead that he approached Muskrat Falls by FIRST convincing himself that it was the best option and then went about selling it to the people (the very opposite of a rational, scientific, objective approach)....... The process has, from the beginning, been designed to push Muskrat Falls through --- whether it was and is in the best interest of the people and the province ---- or not ----- whether we need the power ----- or not, whether we can afford it --- or not. ........ NONE OF THAT MATTERS ---- PERIOD.
08 January 2013
We all know Brazil is a very rainy/tropical place. However, today's Globe and Mail reports that the stock market there is taking a beating and Brazil is rationing electricity because low rainfall has meant not enough water to run their hydroelectric generation plants. With global warming, where will the hydro potential for Muskrat Falls be in a decade or so?
Also, the Federal Court has today ruled that Metis rights and entitlements come under the jurisdiction of the federal government. How will this impact on Muskrat Falls, in that Muskrat Falls is within NunatuKavut's land claims area, and has Nalcor/government satisfied its aboriginal obligations pursuant to Bil 61?
05 January 2013
It seems that there is a good chance that Muskrat Falls power will never be exported to the U.S.----- the so-called Water Management Agreement between Nalcor and its subsidiary, CFL-Co, (with itself) is highly suspect and may be in conflict with the 1969 Quebec contract ----- the advertised 824 MW of power, which has since been reported to be an average of only 570 MW, is suspect ----------- the forecast demand on which the very viability of Muskrat Falls depends (an island demand of 0.8% compounded yearly FOR 50 YEARS) is suspect -------- the argument that we need MORE POWER is suspect (40% of 570MW is only 228MW ---- which is less than half our already existing installed and only partially used NET capacity of Holyrood --- which is 466MW) --- the rates for Muskrat Falls power is highly suspect and will likely be much HIGHER THAN government is saying (ratepayers MUST PAY whatever is needed to pay the Muskrat Falls multi-billion dollar cost/debt)........ the original cost of $6.2 billion is highly suspect and when interest costs during construction and cost overruns are included will likely be $12 billion or more (it is already up around $9 billion)........ I could go on and on, but in short, Muskrat Falls is unneeded, uneconomic, and needs to be halted pending an objective and detailed review.
04 January 2013
I note that the Sir Robert Bond Papers blog is asking for Consumer Advocate (Tom Johnson) to resign his position.
Why isn't Tom Johnson asking why Nalcor/government will be taking $20 billion in revenue/dividends (over and above Muskrat Falls debt servicing and operating costs) out of the pockets of ratepayers over the next 50 years (according Minister Tom Marshall)?
What rate of return is that for Nalor/government?
Why isn't Tom Johnson speaking up for ratepayers, instead of paying lip-service to the job?
Hydro Quebec has more than the equivalent of Muskrat Falls power (and the Romaine will soon be coming on stream) that will be difficult to sell.
Why isn't Tom Johnson demanding that Nalcor negotiate an early access to Upper Churchill power to meet our needs? Since the market is poor at present for HQ's excess power, don't you think HQ would be willing to provide this province early access to the power we need to get us to 2041? Provided Nalcor would agree to have the equivalent amount of power returned to HQ after 2041 when markets may be better for them?
That would be a win/win situation for both HQ and NL.
NL ratepayers could then save the $29 billion cost (over 50 years) for the Muskrat Falls dam/generation facility (the transmission line cost is only $6 billion over 50 years).
The Muskrat Falls dam/generation facility is a totally unneeded and uneconomic project and should be halted.
26 December 2012
RATEPAYER PROTECTION?
Now that the Public Utilities Board (PUB) is largely out of the picture, how are ratepayers protected?
Is there a need for an independent Ratepayers Association?
The passage of Bill 61 has driven a huge nail in the coffin of ratepayers' rights (and Bill 61 will ensure that there are unnecessarily high electricity bills).
For decades, the Electrical Power Control Act (EPCA) required that the supply, development and distribution of power to consumers would be at "the lowest possible cost consistent with reliable service".
However, Bill 61 has given Cabinet the legislative authority to usurp the rights that ratepayers had previously enjoyed and that were assured by the various provisions of the province's Electrical Power Control Act.
Bill 61 allows Cabinet (at its sole discretion) to direct the Public Utilities Board (PUB) to disregard the EPCA legislated "lowest possible cost" policy requirement (up to now, government has used an "exemption" Order and the "least cost", rather than 'lowest possible cost' slight-of-hand to bypass the 'lowest possible cost' requirement).
Bill 61 now also allows Cabinet (at its sole discretion) to usurp many of the most important rights, authorities, responsibilities and duties of the Public Utilities Board --- thereby effectively neutering the Public Utilities Board, preventing it from protecting the rights (and preventing it from looking out for the best interest) of ratepayers. Now it is ratepayers who must subsidize industrial customers, Nova Scotians and beyond.
Furthermore, the government-appointed Consumer Advocate has been ineffective in preventing these changes (and in fact, supported the Muskrat Falls project and its locked-in, escalating, 50-year, take or pay hidden tax contract).
Accordingly, in order to protect householders/ratepayers, is it now time for an independent "Ratepayers Association", an organization properly structured, ratepayer-funded and managed, and that will stand up for ratepayers' rights --- stand up for their best interests?
A Ratepayers Association could not only lobby government and represent ratepayers at PUB hearings, but a Ratepayers Association would be able to provide information and advice to ratepayers on a range of energy related legislative, regulatory, policy and pricing matters, from "Cost of Service" vs "Power Purchase Agreement" (take or pay) pricing schemes, best practices (engineering, reliability, etc.), other power options, new technologies, energy efficiency, proposed rate increases, demand forecasts, government energy conservation programs, etc., etc.
There are approximately 240,000 households/ratepayers in the province, and a not-for-profit Ratepayers Association (with a board of directors responsible solely to ratepayers), funded perhaps through a small annual fee of $5 to $10, would have considerable influence and would be able to help ensure that ratepayers' rights (and best interests) are represented and protected.
Unchallenged, NL ratepayers will be on the receiving end of a Muskrat Falls, multi-billion dollar TAX GRAB. Ratepayers will subsidize power (for at least 35 years) to mining companies, to the Maritime provinces and potentially to the eastern U.S.
There are better (and lower cost) power supply, development and distribution options, options that are potentially able to provide ratepayers with decreasing, rather than yearly escalating, locked-in prices for 50 years (there are ways that householders/ratepayers can on average pay a thousand, and perhaps even several thousand dollars each and every year LESS THAN the BILLIONS (cumulatively) that Minister Marshall says Muskrat Falls will take out of the pockets of ratepayers over the next 50 years).
The info-graphic below shows that over the next 50 years Nalcor/Government will extract (UNNECESSARILY) about $35 billion from ratepayers' pockets, their children, and grandchildren --- and Premier Dunderdale is also now hinting at higher taxes (most likely on low and middle income earners) in order to deal with the province's deficit, a large part of which is caused by Muskrat Falls.
So --- is exploring the need for an independent Ratepayers Association a worthwhile endeavour?
Or is there another way to shed light on, and lessen the impact of, Muskrat Madness?
CLICK IMAGE TO ENLARGE
|
The Muskrat Falls graphic (left) is from one of Nalcor's 2011 media briefings.
Last week Minister Marshall, in the House of Assembly, said that over the 50-year period shown here Nalcor/Government would receive $20 billion in "revenue" from ratepayers (the GREEN section) --- the $20 billion in "revenue" is over and above the additional $15 billion (the RED and BLUE sections) that is needed from ratepayers to cover Muskrat Falls' debt servicing and operating costs (an unabashed TAX GRAB). On average, these total MF revenues (from ratepayers) amount to about $700 million per year for 50 years, or about an additional $3,000.00 per household/ ratepayer per year (note the dramatic increase in the last 20 years) By way of comparison, from 2001-2010, oil costs for Holyrood averaged $92 million per year --- about $380 per household/ratepayer per year). So what impact do you think that change will have on your electricity bill --- a whole lot more than $5 to $10 a year? Who is looking out for your interest? |
24 December 2012
Muskrat Madness: http://bondpapers.blogspot.ca/2012/12/not-with-bang-but-whimper-nlpoli.html
23 December 2012
A MUST READ article by Dennis Woodrow Burden "Why am I here?", Labrador http://rethinkmuskratfalls.wordpress.com/2012/12/18/why_am_i_here/
The Telegram editorial of 22 December 2012 http://www.thetelegram.com/Opinion/Editorial/2012-12-22/article-3146156/One-question/1 suggests that Bill 61 prevents even retailers and industrial customers from building (and utilizing) even their own sources of electrical power.
22 December 2012
"Snowstorm leaves 100,000 homes, businesses without power in Quebec"
http://www.theglobeandmail.com/news/national/snowstorm-leaves-100000-homes-businesses-without-power-in-quebec/article6689741/
-------------------------
Bill 61 has been passed by the House.
I would say that while it would have been more difficult for the Opposition parties to have dissected the Muskrat Falls project in as detailed a way over the last several months as they did this week, nevertheless, they could have done so long before now.
This weeks very good work seems to have been too little, too late.
If they had been more critical earlier and provided more leadership to their people, polls showing that the people supporting Muskrat Falls may have been significantly different. So I place at least some share of the blame on the opposition (recognizing of course that government kept them out of the picture, kept changing the picture, refused committee analysis, provided little or no notice for legislation, etc, etc.).
It is the opposition's job to oppose, and at the political level there was virtually no opposition to Muskrat Falls with the exception to the week before Christmas when citizens would not have had the time to be paying attention.
Not a good 2 years for democracy. Not a good project for the people. Not a good 50 years for our children and grand children. After the Upper Churchill project fiasco, we should all be ashamed of ourselves.
21 December 2021
Excerpt from Bill 61
(2) The Lieutenant-Governor in Council may designate any activities, agreements and amendments in connection with or in respect of subsection (1) entered into by the corporation, a subsidiary of the corporation, Newfoundland and Labrador Hydro, and Emera Inc., whether individually or by any combination of them (a) to be included as part of the Muskrat Falls Project where that activity, agreement or amendment may not otherwise qualify under this section;
This would appear to allow government to put assets, other than the more precisely existing definition of MF assets, up as security and thereby place other NL assets at risk in order to get financing ---- and there is NO LIMIT on what government can pledge. This Premier no doubt has a Plan B that includes placing the Confederation Building up for security in order to get the financing. Now I know why $50 million is being spent to spruce up our seat of government --- it will, in all likelihood, be needed as collateral.
------------------------
Comment today from James G. Learning on The Telegram website in relation the Brian Jones's article: http://www.thetelegram.com/Opinion/Columns/2012-12-21/article-3145210/More-nonsense-from-the-power-crowd/1
James G. Learning- December 21, 2012 at 16:53:25
"It's no secret by now that NunatuKavut and Nunatseavut oppose this project, first because it's not for Labrador. Second because it will poison our waters, and the food in it. Clap trap about mining revenues and deals aside, becaues they are asides, were never in the original justification. I don't honestly remember what was in which Justification. So, all of that aside, the two ineffective Aboriginal groups I hope will be on the front lines to stop this fiasco, and save the NL rate payer. My call would be to other Non-Aboriginal rate payers, come with us on the front lines, you will never regret it. This Island and Territory need to be saved from this Willams/Dunderdale horror. Every drop of oil revenues, every rock in Labrador will be savaged to pay for this fiasco. I can't imagine anyone listening to Maurice Adams factuals, and still be confused. Like the man said now we are truly Canadian, why because we are about to be in tax hell, I don't think thats where the average Canadian is. I lived and worked in Alberta for over 25 years, the tax rate was a dream. They are Canadians. So what is that statement all about. More clap trap, no doubt. It would appear if the NL Government can't do anything right, it can't do anything. The Newfoundland history is one of failed governments, here we go again. Only difference is this time everyones eyes are wide shut."
A 7th amendment is proposed --- to close Holyrood "in a timely manner" ---- ruled by the Speaker as "not in order"
A 6th amendment by the Liberals has been ruled in order. The amendment (if passed by government) would allow for meaningful consultation with Labrador Aboriginal groups.
A 5th attempt by the Liberals to amend the legislation, in this case to allow the private sector to develop cheaper or alternative power to Muskrat Falls has been ruled "out of order"
For the 4th time today, the Speaker has ruled a proposed information related amendment to Muskrat Falls legislation --- "out of order" ---- we -- the public of NL are NOT ALLOWED, through OUR PUB, to have access to expenses and cost and revenue information related to Muskrat Falls ------ It is NOT the "Cabinet's" Utilities Board, it is the "Public's" Utilities Board. What is in this Bill 61 that government do not want the public to know?
For the 3rd time today, the Speaker has ruled an amendment by the Liberals ----- "out of order" (an amendment related to the PUB accessing information related to Muskrat Falls).
For the 2nd time today, the Speaker has ruled that another amendment that would require government to use revenue in excess of expenses to be used to reduce rates for ratepayers to be "out of order". What other reason can there be than because the Muskrat legislation is DESIGNED as a TAX GRAB --- and not to keep rates low for ratepayers?
If there was and is any doubt that Bill 61 (Muskrat legislation) was designed by government to be a MASSIVE TAX GRAB, an amendment proposed today to use excess revenue to lower rates for ratepayers was ruled by the Speaker as "out of order" --- which in effect means that the purpose of Bill 61 is not just to provide power to island ratepayers, but to raise money "FOR GOVERNMENT USE" ---- in other words a 'tax grab'. Why else would the Speaker rule the proposed amendment to use excess MF revenues to lower rates out of order?
-------------------------------
The G & M insert today (Eastern Canada's Energy News, Earth Resources), quotes Nova Scotia's Premier Dexter as saying that Muskrat Falls "will lower costs over time because Nova Scotia will have a frozen price for energy for 35 years" ---- while NL ratepayers will be locked in to an annual 2% escalating rate increase for 50 years.------- The premier then goes on to say that "just imagine yourself if you could buy electricity today at 1995 rates. Here's a real interesting piece. You can imagine energy passing through Nova Scotia going to New England. We would be able to buy off of that line at the New England price, minus the transmission cost...and if they (NL) transmit, they pay a wheeling rate to Nova Scotia Power across the transmission lines that then has to be taken into account as income for the purpose of calculating the rate of return for Nova Scotia Power. Either way, (Nova Scotia) ratepayers benefit" -------and I would say that,.... either way, NL ratepayers lose.
-----------------------------------
In the House today, I would say that "even the Liberals are salivating at the time when they can form the government and then have their turn at setting the electricity rates so that then they too can throw taxpayers' own money around at election time"
Consumers will not even be able to use Upper Churchill power in 2041 (and therefore have no alternative market to Quebec). We will also pay (not including debt servicing and operating costs) 5 times more for our 40% of Muskrat power than Maritimers or ratepayers in the U.S will pay for their 40%). ........Facts, rational thought just does not matter. .........Government sees an opportunity for a multi-billion dollar TAX GRAB from its own citizens --- and it is, by legislation, locking its own citizens into that by way of this ELECTRICITY TAX --- and no one seems to care. ......... Even the Liberals are salivating at the time when they can form the government and then have their turn at setting the electricity rates so that then they too can throw taxpayers own money around at election time --- obtained through this Conservative imposed multi-billion dollar tax grab. ------ If ratepayers do not wish to be FLEECED, they must speak up now --- ALL AIDED AND ABETTED BY OUR 'FRIENDS' IN OTTAWA (HARPERLAND) AND NOVA SCOTIA ----- our situation has not improved.
20 Dec. 2012 --- Island ratepayers pay 5 times more than Maritimers or future U.S. ratepayers.
Just listening to the House. Government confirms that revenues received from island ratepayers for the 40% of Muskrat Falls power that they will use ($20 billion) will be 5 times more than the revenues received from the export sale of the other 40% of Muskrat Falls power ($4 billion). Or, to put it another way, island ratepayers will pay 5 times more for their 40% of Muskrat Falls power than Maritime or U.S. ratepayers will pay for theirs 40%. Actually, more than that because on top of that $20 billion, island ratepayers will also pay for the operating and debt service costs as well (which is not included in the $20 billion figure).
"Muskrat Folly" -- The Financial Post - http://opinion.financialpost.com/2012/12/18/muskrat-folly/
MUST READ
Excerpt from Sir Robert Bond Papers blog:
"...changes to the (Electrical Power Control) Act will allow cabinet to dictate electricity prices in the province. The changes to the bill ensure that Nalcor can prevent development of cheaper alternatives to Muskrat Falls, including purchasing electricity from outside the province for use on the island. It also voids any contracts that may exist before the changes come into force."
Government is changing the province's Electrical Power Control Act to prevent the private sector from developing and/or supplying any power to customers on the island that could undercut Muskrat Falls' prices. Please link to Ed Hollett's Sir Robert Bond Papers: http://bondpapers.blogspot.ca/2012/12/a-closed-market-nlpoli.html
17 Dec, 2012 --- In the House today government is saying that the mining companies in Labrador need 'certainty' in their electricity rates, so the government is debating an industrial rate for Labrador that in 2017 will be 2.7 cents / KWh, while the cost for Muskrat Falls power will be around 30-40 cents/KWh.
And recently, it has been reported that Alderon will spend $3.8 million for pre-engineering work so that Nalcor might provide transmission lines to facilitate power to western Labrador mining. By way of comparison, ratepayers share of the cost of Muskrat Falls over 50 years will be about 10,000 times greater than Alderon's expenditure of $3.8 million.
----------------------------------------------------------------------------------------------------------------------
The 824 MW number that Nalcor quotes for Muskrat Falls comes from the manufacturer's rating on the metal plate that is on each of the 4 turbines planned for the generation facility (206 MW each)............ However, Nalcor says that the average output will be 570 MW (determined by the water flow). .........Nalcor says we need 40% of MF power for the island. That equals 228 MW (less than half Holyrood's already exisiting NET capacity of 466 MW --- and which operates on average at less than 30% its capacity and provides only 12% of the island's total energy needs).
How then can we need MORE power, when the 40% of Muskrat Falls power (228 MW) give the island 50% LESS POWER than Holyrood's 466 MW? ---- And we will pay $10 billion for LESS POWER than we have now ($35 billion over 40 years)?
Why are we allowing government to drown us in debt, waste our oil revenues, put a hold on public services, place the control and ownership of our resources at risk, weigh each homeowner down with debt for 50 years based on what Nalcor says is increasing residential demand --- when government 's own two 2011 studies (Energy Efficiency and Climate Change Action Plans) both state clearly and firmly that residential energy demand has GONE DOWN 17% over the last 19 years?
This is a travesty that homeowners and parents should not allow to happen.
-----------------------------------------------------------------------------------------
Excerpt from 13 Dec. 2012 NL Government News Release:
“Muskrat Falls is a project that will ... be a major revenue generator for the province as we diversify our economy. We estimate that the province will see revenues in excess of $20 billion over 50 years beginning in 2017, with average annual revenues of $450 million over this period”
Please scroll down and see Nalcor's info-graphic where that so-called 'revenue' can be seen.
That $20 billion 'revenue' (PLUS $15 billion more in debt servicing and operating costs) comes solely out of the pockets of island ratepayers ---- that is the REVENUE of which government speaks.
It is a backdoor TAX GRAB from island ratepayers --- going into government coffers, and government and Nalcor touts it as "revenue".
Muskrat Madness: http://bondpapers.blogspot.ca/2012/12/not-with-bang-but-whimper-nlpoli.html
23 December 2012
A MUST READ article by Dennis Woodrow Burden "Why am I here?", Labrador http://rethinkmuskratfalls.wordpress.com/2012/12/18/why_am_i_here/
The Telegram editorial of 22 December 2012 http://www.thetelegram.com/Opinion/Editorial/2012-12-22/article-3146156/One-question/1 suggests that Bill 61 prevents even retailers and industrial customers from building (and utilizing) even their own sources of electrical power.
22 December 2012
"Snowstorm leaves 100,000 homes, businesses without power in Quebec"
http://www.theglobeandmail.com/news/national/snowstorm-leaves-100000-homes-businesses-without-power-in-quebec/article6689741/
-------------------------
Bill 61 has been passed by the House.
I would say that while it would have been more difficult for the Opposition parties to have dissected the Muskrat Falls project in as detailed a way over the last several months as they did this week, nevertheless, they could have done so long before now.
This weeks very good work seems to have been too little, too late.
If they had been more critical earlier and provided more leadership to their people, polls showing that the people supporting Muskrat Falls may have been significantly different. So I place at least some share of the blame on the opposition (recognizing of course that government kept them out of the picture, kept changing the picture, refused committee analysis, provided little or no notice for legislation, etc, etc.).
It is the opposition's job to oppose, and at the political level there was virtually no opposition to Muskrat Falls with the exception to the week before Christmas when citizens would not have had the time to be paying attention.
Not a good 2 years for democracy. Not a good project for the people. Not a good 50 years for our children and grand children. After the Upper Churchill project fiasco, we should all be ashamed of ourselves.
21 December 2021
Excerpt from Bill 61
(2) The Lieutenant-Governor in Council may designate any activities, agreements and amendments in connection with or in respect of subsection (1) entered into by the corporation, a subsidiary of the corporation, Newfoundland and Labrador Hydro, and Emera Inc., whether individually or by any combination of them (a) to be included as part of the Muskrat Falls Project where that activity, agreement or amendment may not otherwise qualify under this section;
This would appear to allow government to put assets, other than the more precisely existing definition of MF assets, up as security and thereby place other NL assets at risk in order to get financing ---- and there is NO LIMIT on what government can pledge. This Premier no doubt has a Plan B that includes placing the Confederation Building up for security in order to get the financing. Now I know why $50 million is being spent to spruce up our seat of government --- it will, in all likelihood, be needed as collateral.
------------------------
Comment today from James G. Learning on The Telegram website in relation the Brian Jones's article: http://www.thetelegram.com/Opinion/Columns/2012-12-21/article-3145210/More-nonsense-from-the-power-crowd/1
James G. Learning- December 21, 2012 at 16:53:25
"It's no secret by now that NunatuKavut and Nunatseavut oppose this project, first because it's not for Labrador. Second because it will poison our waters, and the food in it. Clap trap about mining revenues and deals aside, becaues they are asides, were never in the original justification. I don't honestly remember what was in which Justification. So, all of that aside, the two ineffective Aboriginal groups I hope will be on the front lines to stop this fiasco, and save the NL rate payer. My call would be to other Non-Aboriginal rate payers, come with us on the front lines, you will never regret it. This Island and Territory need to be saved from this Willams/Dunderdale horror. Every drop of oil revenues, every rock in Labrador will be savaged to pay for this fiasco. I can't imagine anyone listening to Maurice Adams factuals, and still be confused. Like the man said now we are truly Canadian, why because we are about to be in tax hell, I don't think thats where the average Canadian is. I lived and worked in Alberta for over 25 years, the tax rate was a dream. They are Canadians. So what is that statement all about. More clap trap, no doubt. It would appear if the NL Government can't do anything right, it can't do anything. The Newfoundland history is one of failed governments, here we go again. Only difference is this time everyones eyes are wide shut."
A 7th amendment is proposed --- to close Holyrood "in a timely manner" ---- ruled by the Speaker as "not in order"
A 6th amendment by the Liberals has been ruled in order. The amendment (if passed by government) would allow for meaningful consultation with Labrador Aboriginal groups.
A 5th attempt by the Liberals to amend the legislation, in this case to allow the private sector to develop cheaper or alternative power to Muskrat Falls has been ruled "out of order"
For the 4th time today, the Speaker has ruled a proposed information related amendment to Muskrat Falls legislation --- "out of order" ---- we -- the public of NL are NOT ALLOWED, through OUR PUB, to have access to expenses and cost and revenue information related to Muskrat Falls ------ It is NOT the "Cabinet's" Utilities Board, it is the "Public's" Utilities Board. What is in this Bill 61 that government do not want the public to know?
For the 3rd time today, the Speaker has ruled an amendment by the Liberals ----- "out of order" (an amendment related to the PUB accessing information related to Muskrat Falls).
For the 2nd time today, the Speaker has ruled that another amendment that would require government to use revenue in excess of expenses to be used to reduce rates for ratepayers to be "out of order". What other reason can there be than because the Muskrat legislation is DESIGNED as a TAX GRAB --- and not to keep rates low for ratepayers?
If there was and is any doubt that Bill 61 (Muskrat legislation) was designed by government to be a MASSIVE TAX GRAB, an amendment proposed today to use excess revenue to lower rates for ratepayers was ruled by the Speaker as "out of order" --- which in effect means that the purpose of Bill 61 is not just to provide power to island ratepayers, but to raise money "FOR GOVERNMENT USE" ---- in other words a 'tax grab'. Why else would the Speaker rule the proposed amendment to use excess MF revenues to lower rates out of order?
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The G & M insert today (Eastern Canada's Energy News, Earth Resources), quotes Nova Scotia's Premier Dexter as saying that Muskrat Falls "will lower costs over time because Nova Scotia will have a frozen price for energy for 35 years" ---- while NL ratepayers will be locked in to an annual 2% escalating rate increase for 50 years.------- The premier then goes on to say that "just imagine yourself if you could buy electricity today at 1995 rates. Here's a real interesting piece. You can imagine energy passing through Nova Scotia going to New England. We would be able to buy off of that line at the New England price, minus the transmission cost...and if they (NL) transmit, they pay a wheeling rate to Nova Scotia Power across the transmission lines that then has to be taken into account as income for the purpose of calculating the rate of return for Nova Scotia Power. Either way, (Nova Scotia) ratepayers benefit" -------and I would say that,.... either way, NL ratepayers lose.
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In the House today, I would say that "even the Liberals are salivating at the time when they can form the government and then have their turn at setting the electricity rates so that then they too can throw taxpayers' own money around at election time"
Consumers will not even be able to use Upper Churchill power in 2041 (and therefore have no alternative market to Quebec). We will also pay (not including debt servicing and operating costs) 5 times more for our 40% of Muskrat power than Maritimers or ratepayers in the U.S will pay for their 40%). ........Facts, rational thought just does not matter. .........Government sees an opportunity for a multi-billion dollar TAX GRAB from its own citizens --- and it is, by legislation, locking its own citizens into that by way of this ELECTRICITY TAX --- and no one seems to care. ......... Even the Liberals are salivating at the time when they can form the government and then have their turn at setting the electricity rates so that then they too can throw taxpayers own money around at election time --- obtained through this Conservative imposed multi-billion dollar tax grab. ------ If ratepayers do not wish to be FLEECED, they must speak up now --- ALL AIDED AND ABETTED BY OUR 'FRIENDS' IN OTTAWA (HARPERLAND) AND NOVA SCOTIA ----- our situation has not improved.
20 Dec. 2012 --- Island ratepayers pay 5 times more than Maritimers or future U.S. ratepayers.
Just listening to the House. Government confirms that revenues received from island ratepayers for the 40% of Muskrat Falls power that they will use ($20 billion) will be 5 times more than the revenues received from the export sale of the other 40% of Muskrat Falls power ($4 billion). Or, to put it another way, island ratepayers will pay 5 times more for their 40% of Muskrat Falls power than Maritime or U.S. ratepayers will pay for theirs 40%. Actually, more than that because on top of that $20 billion, island ratepayers will also pay for the operating and debt service costs as well (which is not included in the $20 billion figure).
"Muskrat Folly" -- The Financial Post - http://opinion.financialpost.com/2012/12/18/muskrat-folly/
MUST READ
Excerpt from Sir Robert Bond Papers blog:
"...changes to the (Electrical Power Control) Act will allow cabinet to dictate electricity prices in the province. The changes to the bill ensure that Nalcor can prevent development of cheaper alternatives to Muskrat Falls, including purchasing electricity from outside the province for use on the island. It also voids any contracts that may exist before the changes come into force."
Government is changing the province's Electrical Power Control Act to prevent the private sector from developing and/or supplying any power to customers on the island that could undercut Muskrat Falls' prices. Please link to Ed Hollett's Sir Robert Bond Papers: http://bondpapers.blogspot.ca/2012/12/a-closed-market-nlpoli.html
17 Dec, 2012 --- In the House today government is saying that the mining companies in Labrador need 'certainty' in their electricity rates, so the government is debating an industrial rate for Labrador that in 2017 will be 2.7 cents / KWh, while the cost for Muskrat Falls power will be around 30-40 cents/KWh.
And recently, it has been reported that Alderon will spend $3.8 million for pre-engineering work so that Nalcor might provide transmission lines to facilitate power to western Labrador mining. By way of comparison, ratepayers share of the cost of Muskrat Falls over 50 years will be about 10,000 times greater than Alderon's expenditure of $3.8 million.
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The 824 MW number that Nalcor quotes for Muskrat Falls comes from the manufacturer's rating on the metal plate that is on each of the 4 turbines planned for the generation facility (206 MW each)............ However, Nalcor says that the average output will be 570 MW (determined by the water flow). .........Nalcor says we need 40% of MF power for the island. That equals 228 MW (less than half Holyrood's already exisiting NET capacity of 466 MW --- and which operates on average at less than 30% its capacity and provides only 12% of the island's total energy needs).
How then can we need MORE power, when the 40% of Muskrat Falls power (228 MW) give the island 50% LESS POWER than Holyrood's 466 MW? ---- And we will pay $10 billion for LESS POWER than we have now ($35 billion over 40 years)?
Why are we allowing government to drown us in debt, waste our oil revenues, put a hold on public services, place the control and ownership of our resources at risk, weigh each homeowner down with debt for 50 years based on what Nalcor says is increasing residential demand --- when government 's own two 2011 studies (Energy Efficiency and Climate Change Action Plans) both state clearly and firmly that residential energy demand has GONE DOWN 17% over the last 19 years?
This is a travesty that homeowners and parents should not allow to happen.
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Excerpt from 13 Dec. 2012 NL Government News Release:
“Muskrat Falls is a project that will ... be a major revenue generator for the province as we diversify our economy. We estimate that the province will see revenues in excess of $20 billion over 50 years beginning in 2017, with average annual revenues of $450 million over this period”
Please scroll down and see Nalcor's info-graphic where that so-called 'revenue' can be seen.
That $20 billion 'revenue' (PLUS $15 billion more in debt servicing and operating costs) comes solely out of the pockets of island ratepayers ---- that is the REVENUE of which government speaks.
It is a backdoor TAX GRAB from island ratepayers --- going into government coffers, and government and Nalcor touts it as "revenue".
NEWS RELEASE today from the Government of Newfoundland and Labrador (note that this is NOT a "loan guarantee", but instead merely a "term sheet" agreement --- i.e. an agreement on the terms from which a loan guarantee may or may not emerge). http://www.releases.gov.nl.ca/releases/2012/nr/1203n04.htm
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05 Dec. 2012 (Globe and Mail) --- "Quebec has no reason to fear the Muskrat Falls project"
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/quebec-has-no-reason-to-fear-the-muskrat-falls-project/article5980909/
BRAD CABANA'S "Saving Private Peter"
http://rocksolidpolitics.blogspot.ca/
Today's, 01 Dec. 2012 Telegram poll now shows 56% of ratepayers want a referendum (UP from an earlier NTV poll?) and also that 61% of women now want a referendum (also UP from earlier poll).
Also, 01 Dec. 2012 Globe and Mail article quotes Emera CEO as saying that the Maritime Link is now estimated to cost up to $1.5 billion (25% more). So, $7.4 billion is now up to $7.7 billion http://www.theglobeandmail.com/news/politics/muskrat-falls-project-secures-federal-loan-guarantee/article5844544/
Loan Guarantee only a 'term sheet". See Des Sullivan's blog (Also, it seems a real guarantee is dependent on a link to Nova Scotia, which is unlikely).
http://unclegnarley.blogspot.ca/2012/12/the-pm-to-dunderdale-take-it-or-leave-it.html#more
Quebec vows to fight federal government funding (what will that do to Nalcor's so-called Water Management Agreement?)
http://www.theglobeandmail.com/news/politics/quebec-warns-it-will-fight-federal-funding-of-newfoundland-energy-project/article5842575/
Please note that most demand-related information is now on a separate DEMAND page (above).
28 Nov. 2012.
Globe and Mail:---- "Pierre Duhaime, former SNC-Lavalin CEO, arrested on fraud charges".
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(See DEMAND page for links to Energy and Climate Change Plans).
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Do the premier, government, and Nalcor now have the fox in charge of the hen house?
26 Nov. 2012, the Globe and Mail states, "The corruption scandal that has shaken...SNC-Lavalin Group Inc., has expanded, with Swiss prosecutors now chasing $139 million in suspected illicit payments, more than double the amount of missing money that was first reported..."
28 Nov. 2012.
Globe and Mail:---- "Pierre Duhaime, former SNC-Lavalin CEO, arrested on fraud charges".
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(See DEMAND page for links to Energy and Climate Change Plans).
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Do the premier, government, and Nalcor now have the fox in charge of the hen house?
26 Nov. 2012, the Globe and Mail states, "The corruption scandal that has shaken...SNC-Lavalin Group Inc., has expanded, with Swiss prosecutors now chasing $139 million in suspected illicit payments, more than double the amount of missing money that was first reported..."
23 Nov. 2012,
The media has asked 'why would government want to "railroad" Muskrat Falls through?'
HERE"S WHY:- It is easier and more productive to neuter the people's protector (the PUB), to direct its own agency (Nalcor) to do what it is told, to force ratepayers (by way of a 50-year 'take or pay' contract) to pay excessively high and escalating electricity rates (all through this Muskrat Falls project) than it is to require industry to develop our natural gas, to share the revenues of natural gas in a balanced way with industry, to work with industry on wind development, to work with industry on efficiency improvements, to share such collaborative benefits with ratepayers. .... All good reasons to 'railroad' Muskrat Falls through...... Muskrat Falls (combined with Bill 29) keeps everything within a closed shop shell game. It allows government, by stealth, to PAD ITS OWN REVENUES by imposing what effectively is a hidden, multi-billion dollar escalating TAX on its captive citizens and to thereby rob low and middle income ratepayers blind. It is as simple as that. READ ON
MUSKRAT FALLS --- a massive, back door, TAX GRAB
The media has asked 'why would government want to "railroad" Muskrat Falls through?'
HERE"S WHY:- It is easier and more productive to neuter the people's protector (the PUB), to direct its own agency (Nalcor) to do what it is told, to force ratepayers (by way of a 50-year 'take or pay' contract) to pay excessively high and escalating electricity rates (all through this Muskrat Falls project) than it is to require industry to develop our natural gas, to share the revenues of natural gas in a balanced way with industry, to work with industry on wind development, to work with industry on efficiency improvements, to share such collaborative benefits with ratepayers. .... All good reasons to 'railroad' Muskrat Falls through...... Muskrat Falls (combined with Bill 29) keeps everything within a closed shop shell game. It allows government, by stealth, to PAD ITS OWN REVENUES by imposing what effectively is a hidden, multi-billion dollar escalating TAX on its captive citizens and to thereby rob low and middle income ratepayers blind. It is as simple as that. READ ON
MUSKRAT FALLS --- a massive, back door, TAX GRAB
A "CASH FLOW or DIVIDEND" FOR NALCOR / GOVERNMENT ---- IS A "COST", (unnecessarily HIGHER RATES) and a back door "TAX GRAB" IMPOSED ON LOW AND MIDDLE INCOME RATEPAYERS (the only revenue is from island ratepayers).
In the House of Assembly yesterday (21 Nov. 2012) Minister Kennedy said "Mr. Speaker, the provincial government has engaged in the rigorous review of the economics of this project, but just to put it in perspective, the revenues that we show right now, there will be approximately $130 million available to the Province in 2020 that will be over and above the payment of all expenses" (See year 2020, green section, above).
As can be seen, Nalcor's "MF + LIL Cash Flow" info-graphic (above) shows that 'free cash flow/dividends' for year 2020 (GREEN section) is pretty much equal to the $130 million referred to by Minister Kennedy.
But if you look closely at the whole (50-year) info-graphic period, it shows that over that total period, while the total debt servicing and operating costs amount to about $15 billion, the 'free cash flow/dividend' (green section alone) amounts to about $20 billion --- for a total $35 billion cost (to come out of the pockets of ratepayers).
It can be seen therefore that government is requiring Nalcor to impose a 50-year 'take or pay' contract on NL Hydro (and in turn on island ratepayers) that will require (make it mandatory) for ratepayers to pay for power that is not only two or three times as much as islanders can use, but at electricity rates that will take about 2.5 times as much money out of ratepayers' pockets (and even more money out of the pockets of ratepayers' children and grandchildren) as is actually needed to pay for Muskrat Falls.
Perhaps that explains Minister Kennedy's "glee" when he speaks of the $130 million coming into the government coffers in year 2020 alone (and the even more than $1 billion additional back door tax for each year during the later decades). But that so-called revenue is coming solely from you and me, from our children and grandchildren (there in no real, NET gain).
Unneeded electricity, excessively high (more than twice as high) electricity rates therefore are being used to create a firm revenue source for government --- locked in, higher than needed, electricity rates which in effect becomes a MASSIVE, BACK DOOR --- TAX GRAB on ratepayers.
Such a lucrative, hidden, TAX GRAB explains why government has been adamant and has directed Nalcor to proceed with Muskrat Falls, come hell or high water.
Electricity is being used as a back door way to dramatically increase government revenue --- by taking more than double the amount of money that is needed (by way of a hidden, back door TAX) out of the pockets of lower and middle income ratepayers..
And in the later years, that amount is 5 times more than is needed.
What will that do to our children and grandchildren? what will it do to the provincial economy? the cost of living? the business climate?
On the whole, economic growth is best fostered when as much money as possible is left in the pockets of the people --- not forced into the coffers of government or bureaucratic agencies such as Nalcor.
There is nothing "Progressive", nothing "Conservative" about Muskrat Falls.
By any other name, it is a hidden, locked-in, escalating, MASSIVE TAX --- billions unnecessarily taken out of the pockets of ratepayers, handed over to contractors, banks, and to Nalcor, with what's left over going to government. It is, in essence, a SHELL GAME (a cost to ratepayers) --- poorly disguised as 'revenue'.
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21 Nov. 2012 --- WORLD TRADE ORGANIZATION RULING
I note in yesterday's G & M that the World Trade Organization has ruled against Ontario's green energy program wherein it provided renewable energy companies with "long term guaranteed revenue contracts" (sound familiar?).
I note also that the editorial says that Ontario "should not struggle on.... now that the World Trade Organization has decided that the program's 'local content' element violates international law".
How does this ruling affect Nalcor's "long term guaranteed revenue contract" --- its 50-year, guaranteed revenue, take or pay contract with its local, sole source, non-arms length subsidiary --- NL Hydro?
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21 Nov. 2012 Interview, CBC Radio Noon (Should MF undergo an independent review? Guests Dennis Browne and Con O'Brien)
http://www.cbc.ca/video/watch/AudioMobile/Radio Noon NL/ID=2307499188
http://www.cbc.ca/radionoonnl/
WHATEVER YOU ARE DOING --- STOP, NOW........ AND READ THIS ARTICLE BY HANS ROLLMANN "Oh, Muskrat" :-------
http://theindependent.ca/2012/11/20/oh-muskrat/
Just like everything else about Muskrat ------- citizens are "being led to believe" a predetermined "non-reality"........... rather than being objectively informed.
"Our children and grandchildren will not look kindly on us if we lock them into a legalized, 50-year
theft of resources and oil revenues that are as much theirs as they are ours. We may have
the legal, but not the moral right to take away their future."
M.E. Adams
"What it is that is in our power to agree to, is also
in our power not to agree to."
Aristotle
Con O'Brien ---- ("Our daughters and our sons") -- Muskrat Falls
http://www.cbc.ca/news/canada/newfoundland-labrador/story/2012/11/16/nl-muskrat-falls-protest-1117.html
"...big projects have been exempt from the PUB in terms of rates, and that will continue here. In order to obtain your financing, in order to give the bond rating agencies, ... give them the confidence in terms of providing loans, they have to know there will be a regulated rate or return...",
Jerome Kennedy (meeting with The Telegram editorial board, Nov. 7, 2012)
Click this link to see and hear a 4 minute Kennedy/Telegram video:
http://www.thetelegram.com/Video/20997/Editorial-board-meeting?autoPlayVideo=1
Government plans to bring in legislation to remove the PUB from any role in setting the regulated rate of return related to Muskrat Falls. So, in effect, the bond rating agencies are setting the agenda and ensuring that laws in this province are passed guaranteeing Nalcor a rate of return so that government can get the loans they need to build Muskrat Falls for mining companies ---- and those bond rating agencies want it enshrined IN LAW that captive NL island ratepayers will pay a sufficient amount of money and that island ratepayers alone will (must) take the risk and bear the brunt of the financial burden of Muskrat Falls.
No risk for anyone ---- except the captive, locked-in island ratepayer/taxpayer.
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Today's Globe and Mail (17 Nov. 2012)
" In the third quarter, Connacher Oil and Gas Ltd. sold its oil sands crude for just $38.12 a barrel"...... http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/in-us-energy-renaissance-flares-of-fear-for-albertas-oil-patch/article5398644/
At that price, Muskrat power would be about 7 to 8 times more expensive that the oil cost of production at Holyrood...........Also, from today's G & M, "The International Energy Agency predicted this week that the U.S. is set to become (by 2017) the largest oil producing nation on earth, more prolific than Saudi Arabia"......
And our politicians are about to lock us into a 50-year high cost take or pay contract so that mining giants can have power at 10% of what it will cost island ratepayers to produce?
SAVE $26 BILLION. Muskrat Falls is a massive, locked-in, back door, (MUST TAX ALL) escalating tax on island citizens --- in order to subsidize, and thereby provide, low cost power to the mining companies of Labrador. See http://unclegnarley.blogspot.ca/2012/11/doing-math-on-mining-subsidy.html#comment-form .
Des Sullivan calculates approximately $56 million per year for Alderon alone.
Over 50 years a $56 million yearly subsidy would work out to $2.8 billion.
Over 50 years, Nalcor's documents show that Muskrat Falls will cost citizens $35 billion (while a power purchase from Hydro Quebec for 25 years, to get us to 2041, would cost about $3 billion --- $26 billion LESS THAN the cost of the Muskrat Falls dams and generation facility). READ ON.
Des Sullivan calculates approximately $56 million per year for Alderon alone.
Over 50 years a $56 million yearly subsidy would work out to $2.8 billion.
Over 50 years, Nalcor's documents show that Muskrat Falls will cost citizens $35 billion (while a power purchase from Hydro Quebec for 25 years, to get us to 2041, would cost about $3 billion --- $26 billion LESS THAN the cost of the Muskrat Falls dams and generation facility). READ ON.
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C O M P A R E
(UPPER CHURCHILL -- MUSKRAT FALLS)
S I M I L I A R I T I E S
C O M P A R E
(UPPER CHURCHILL -- MUSKRAT FALLS)
S I M I L I A R I T I E S
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UPPER CHURCHILL CONTRACT
BELOW is a partial description of the developments that led to the 1969 Upper Churchill Power Contract --- as extracted from CF(L)Co's MOTION TO INSTITUTE PROCEEDINGS in a Quebec court IN SUPPORT OF ITS ACTION, THE PLAINTIFF, CHURCHILL FALLS (LABRADOR) CORPORATION LIMITED v. HYDRO-QUÉBEC, Defendant, (2009) QUOTE
(iii) Because of the refusal by its sole shareholder, the Government of Québec, to permit access through Québec to US or other Canadian markets, Hydro-Québec became the only potential purchaser UNQUOTE D I F F E R SINGLE RISK PROVINCE NOT PROTECTED
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MUSKRAT FALLS PROJECT
Couldn't a description of the Muskrat Falls project (such as shown below) pretty much be substituted for the Upper Churchill ?
(ii) Reflecting the current belief that oil prices would likely increase over the long-term and that island demand would continue to increase at an average compound growth rate of 0.8 per cent annually, energy prices are fixed on a generally increasing scale of 2 per cent annually in accordance with an escalating supply price scheme for the whole 50-year term (iii) Because of the decision by Emera to take until July 2014 to decide whether or not to "opt in" to the Muskrat Falls Project, and with no firm contract from the mining companies in Labrador, and in any event, with energy sales to the mining companies expected to be considerably less than 10 per cent of the cost of production, Nalcor's own subsidiary (NL Hydro) with its small number of captive island ratepayers became the only locked-in purchaser E N C E S MULTIPLE RISKS RATEPAYERS NOT PROTECTED
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Now are we really going down this 'unprotected' road again?
NEWS
Where is Nalcor re CETA?
Nov. 5, 2012, Globe and Mail, states that "Quebec, for example, has made it clear that it will seek exemptions for Hydro-Quebec" regarding the imminent Canada-European Trade Agreement (CETA). WHY? How will CETA affect Muskrat Falls?
Nov. 3, 2012, The Telegram:
"Let's call it what it really is --- a tax"
NOTE: Where The Telegram article shows $7.6 per megawatthour (MWh) as the cost to ratepayers to produce Muskrat Falls power, the article should have read $76 per megawatthour (compounded 2% annually) which would be more than 15 times the $5 price that the Telegram article mentioned that mining companies might pay --- and that does not take into account that if the production cost were priced the industry standard way (cost of service) --- where costs are NOT back-loaded on our children and grandchildren, then the cost just to produce Muskrat Falls power (not including transmission) would be $214 per megawatthour (MW) --- more than 42 times the $5 price that this Telegram article suggests might be paid by the mining companies.
That also gives you an idea of HOW MUCH MORE we ourselves, our children and our grandchildren will have to PAY LATER. This whole scheme is more akin to a lease than a mortgage. By far the bulk of the money to come out of the pockets of captive island ratepayers ARE IN THE LATER YEARS ---- MANY "BILLIONS" MORE THAN IN THE EARLY YEARS. The early year lower price is the WORM to get ratepayers hooked, to get them to buy into the scheme.
Excerpt from Nalcor's Submission to the PUB (March 2, 2012) "Nalcor has proposed a constant dollar base price of approximately $76/MWh in 2010$ for Muskrat Falls power, which when escalated at two percent annually ... provides an 8.4 percent IRR (rate of return) to the shareholder. In addition to providing consumers with stable rates for Muskrat Falls power in the early years of operations...." (It is also my understanding that the 2010 quoted cost by Nalcor of $76 per MWh is now $87 per MWh in 2017)
So "stable rates" are in the "early years" ---- what about the later years?
Also, see this answer from Nalcor (PUB-Nalcor-46 Muskrat Falls Review)
Question: If “cost of service” (“COS”) pricing were applied in determining the power purchase price, what would be the power purchase price paid by Hydro to Nalcor for Muskrat Falls power and energy in the first full calendar year of supply? (in other words, if costs were paid more like a mortgage --- NOT back-loaded on our children and grandchildren--- my comment, not part of the question)
Answer: "Nalcor has prepared an annual cost of service model in response to the question posed. The financial parameters in this model were set to provide an internal rate of return of 8.4% for the Muskrat Falls investment. On this basis, the cost of service in year 1 would be $214 /MWh declining with each year thereafter as the Island sales base grows and the return on rate base declines." ------------ (note that when paid off more like a mortgage, costs GO DOWN, year after year, not UP, and that $214 per megawatthour cost is 42 times the $5 price mentioned in the Telegram article that the mining companies might pay).
Using Nalcor's proposed take or pay payment method, toward the end of the 50 year payment period costs of Muskrat Falls power for our children and grandchildren would be about 10 times higher than if the cost of service (COS) method were used. Using the COS method (instead of Nalcor's method) WE would be looking out for the best interest of our children and grandchildren --- not transferring OUR costs to THEM. So please note, that using the COS method, "as the Island sales base grows and the return on rate base declines .... the cost of service in year 1 would be $214 /MWh declining with each year thereafter..." (not going UP).
I WOULD SUGGEST THAT IF "WE" CANNOT AFFORD THE TRUE COST ($214) PER MEGAWATTHOUR IN THOSE EARLIER YEARS ---- WE SHOULD NOT BE OFF-LOADING ABOUT 2/3RDS OF THOSE REAL COSTS ON OUR CHILDREN AND GRANDCHILDREN --- so that the mining companies can get very low cost power --- subsidized by our children and grandchildren.
Subsequent Telegram posting by Russell Wangersky:
Russell Wangersky- November 4, 2012 at 08:35:08 "The posters are absolutely right: the correct number for Muskrat Falls power is $76 per megawatt hour, or 7.6 cents a kilowatt hour, which only goes to show even more the huge disparity between electricity prices. Misplaced decimal point - my error." Russell Wangersky
My further comment:
Yes, Thank you for clarifying the typo. It is interesting to note also, that the $76 / MWh was for 2010$, and that number (as I understand it) is now $87 for the year that Muskrat Falls is scheduled to come on stream (2017) --- and that compares to the TRUE 2017 'cost of service' cost of $214. .........So, from a layperson's perspective, the difference between the $214 and $87 costs gives you an indication of how much we are pushing OUR costs and debts unto our children and grandchildren........ The full amount has to be paid over the 50 year period and Nalcor has confirmed in writing that it is NOT "foregoing" its return on equity, but merely "deferring" it to future generations. Hence, Nalcor's claim that rates are stable "in the early years"....... Why should my children and yours, for 50 years, have to pay to provide near-zero cost power to mining companies ---- when it was our children and grandchildren instead that were supposed to get the benefit of near-zero cost Upper Churchill power in 2041 --- not locked into an unneeded, very high cost Muskrat Falls contract to satisfy mining companies until 2067?
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CBC Interview with NL's former consumer advocate, lawyer Dennis Browne
Nova Scotia (The Chronical Herald): "Muskrat Falls is a grandiose but flawed project", 20 October, 2012
LINK: http://thechronicleherald.ca/opinion/151368-surrette-muskrat-falls-is-a-grandiose-but-flawed-project
Independence is a wonderful thing
MHA Tom Osborne is calling for a public referendum
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Oct. 31, 2012, The Telegram ("The need for power is not proven")
The Real Reason for Muskrat (a project for the Labrador mining companies --- paid for, lock, stock and barrel by captive island ratepayers, especially our children and grandchildren)
So is anyone surprised to see that the real reason for Muskrat Falls is so that the mining giants of Labrador will get their power at 2 or 3 cents per KWh, while the real cost of this unneeded power (about 37 cents/KWh to build and transmit to the island) will (must) be paid for --- lock, stock and barrel by captive island ratepayers --- $21 billion AFTER 2041 (even though near-zero cost Upper Churchill power would have otherwise been available)? (see $21 billion graph below)
In effect, the benefit of near-zero cost Upper Churchill power will no longer be available to island ratepayers in 2041 ---- they will be locked into Muskrat's high cost, 50 year 'take or pay' contract until 2067 ---- What a travesty.
Muskrat will not only impose high cost power on our children and grandchildren until 2067, but will also deny them the benefit of near-zero cost Upper Churchill power, also until 2067
Provincial Government News Release
Natural Resources
November 1, 2012
Reports on Labrador Mining Support Need for Power Two reports on Labrador mining conclude that the mining industry has a significant impact of the economy of Newfoundland and Labrador, and that Muskrat Falls will be an important source of power for potential mining developments. The discussion documents, “Labrador mining and power – how much and where from?”, and “Economic Impact Analysis of Iron Ore Mining Industry in Labrador 2011-31”, were released today by the Department of Natural Resources. “The mining industry holds tremendous growth potential, with upwards of $10 billion to $15 billion of investment in Labrador mining projects possible over the next decade,” said the Honorable Jerome Kennedy, Minister of Natural Resources. “The reports released today support the conclusion that the development of potential projects will be dependent in part on the availability of power, and Muskrat Falls power is needed to support mining developments in Labrador.” Based on projects already in construction or near sanction, existing generating capacity in Labrador may be exhausted by 2015-2017, and Muskrat Falls could be an important source of power for mining developments post 2017. There are currently a number of mining projects at various states of development in Labrador. Voisey’s Bay, Wabush Mines, Iron Ore Company of Canada’s (IOC) Carol Lake and Labrador Iron Mines Ltd are in operation. IOC Concrete Expansion Program and Tata Steel Minerals Canada are currently in construction. The feasibility study for LIM Expansion is complete. Alderon Iron Ore Corporation’s Kami project, Tata Steel Canada Labmag project, Vale Inco’s Voisey’s Bay underground mine and Labec Century Iron Ore’s Joyce Lake are all undergoing feasibility studies. IOC Labrador West Strategic Development, North Atlantic Iron Corporation, Aurora’s Paladin Michelin project and Julienne Lake are all undergoing pre-feasibility studies. This Labrador mining paper examines the process of developing a mine, the importance of competitively priced power to development and the potential power requirements of some or all of these if projects were to proceed. To illustrate the economic importance of the mining industry to Newfoundland and Labrador, Dr. Wade Locke and Strategic Concepts, Inc. prepared the paper entitled, “Economic Impact Analysis of Iron Ore Mining Industry in Labrador 2011-31.” This paper highlights the economic impacts associated with the current and potential development of the iron ore industry in Labrador under four growth scenarios. Dr. Locke demonstrates that the forecasted capital and operating expenditures under each of the scenarios will have a significant impact of the economy of Newfoundland and Labrador. Dr. Locke’s report shows that the iron ore industry in Western Labrador already makes a major contribution to the province through employment, taxation revenue and contribution to gross domestic product (GDP). The growth scenarios developed by Dr. Locke show that production in Labrador could grow from the current 26 million tonnes per year to 81 million tonnes if all projects proposed were developed. Over a 21 year period, such growth would result in an additional $80 billion in new capital and operating expenditures, 358,000 person years of employment, and $117 billion in GDP. The provincial treasury would also see an additional $17.5 billion in tax revenue. “Muskrat Falls will be an important source of power for mining, and the availability of power for mining developments will encourage investment right here in our province, rather than in competing jurisdictions,” said Minister Kennedy. “Such mining developments would bring major economic benefit to the province which would benefit the people of our province today and for generations.” To view the full discussion papers, please visit: www.powerinourhands.ca . - 30 - Media contact:
Heather Maclean
Director of Communications
Department of Natural Resources
709-729-5282, 697-4137
[email protected] Key Points
Labrador mining and power – how much and where from?
Prepared by Dr. Wade Locke
Where is Nalcor re CETA?
Nov. 5, 2012, Globe and Mail, states that "Quebec, for example, has made it clear that it will seek exemptions for Hydro-Quebec" regarding the imminent Canada-European Trade Agreement (CETA). WHY? How will CETA affect Muskrat Falls?
Nov. 3, 2012, The Telegram:
"Let's call it what it really is --- a tax"
NOTE: Where The Telegram article shows $7.6 per megawatthour (MWh) as the cost to ratepayers to produce Muskrat Falls power, the article should have read $76 per megawatthour (compounded 2% annually) which would be more than 15 times the $5 price that the Telegram article mentioned that mining companies might pay --- and that does not take into account that if the production cost were priced the industry standard way (cost of service) --- where costs are NOT back-loaded on our children and grandchildren, then the cost just to produce Muskrat Falls power (not including transmission) would be $214 per megawatthour (MW) --- more than 42 times the $5 price that this Telegram article suggests might be paid by the mining companies.
That also gives you an idea of HOW MUCH MORE we ourselves, our children and our grandchildren will have to PAY LATER. This whole scheme is more akin to a lease than a mortgage. By far the bulk of the money to come out of the pockets of captive island ratepayers ARE IN THE LATER YEARS ---- MANY "BILLIONS" MORE THAN IN THE EARLY YEARS. The early year lower price is the WORM to get ratepayers hooked, to get them to buy into the scheme.
Excerpt from Nalcor's Submission to the PUB (March 2, 2012) "Nalcor has proposed a constant dollar base price of approximately $76/MWh in 2010$ for Muskrat Falls power, which when escalated at two percent annually ... provides an 8.4 percent IRR (rate of return) to the shareholder. In addition to providing consumers with stable rates for Muskrat Falls power in the early years of operations...." (It is also my understanding that the 2010 quoted cost by Nalcor of $76 per MWh is now $87 per MWh in 2017)
So "stable rates" are in the "early years" ---- what about the later years?
Also, see this answer from Nalcor (PUB-Nalcor-46 Muskrat Falls Review)
Question: If “cost of service” (“COS”) pricing were applied in determining the power purchase price, what would be the power purchase price paid by Hydro to Nalcor for Muskrat Falls power and energy in the first full calendar year of supply? (in other words, if costs were paid more like a mortgage --- NOT back-loaded on our children and grandchildren--- my comment, not part of the question)
Answer: "Nalcor has prepared an annual cost of service model in response to the question posed. The financial parameters in this model were set to provide an internal rate of return of 8.4% for the Muskrat Falls investment. On this basis, the cost of service in year 1 would be $214 /MWh declining with each year thereafter as the Island sales base grows and the return on rate base declines." ------------ (note that when paid off more like a mortgage, costs GO DOWN, year after year, not UP, and that $214 per megawatthour cost is 42 times the $5 price mentioned in the Telegram article that the mining companies might pay).
Using Nalcor's proposed take or pay payment method, toward the end of the 50 year payment period costs of Muskrat Falls power for our children and grandchildren would be about 10 times higher than if the cost of service (COS) method were used. Using the COS method (instead of Nalcor's method) WE would be looking out for the best interest of our children and grandchildren --- not transferring OUR costs to THEM. So please note, that using the COS method, "as the Island sales base grows and the return on rate base declines .... the cost of service in year 1 would be $214 /MWh declining with each year thereafter..." (not going UP).
I WOULD SUGGEST THAT IF "WE" CANNOT AFFORD THE TRUE COST ($214) PER MEGAWATTHOUR IN THOSE EARLIER YEARS ---- WE SHOULD NOT BE OFF-LOADING ABOUT 2/3RDS OF THOSE REAL COSTS ON OUR CHILDREN AND GRANDCHILDREN --- so that the mining companies can get very low cost power --- subsidized by our children and grandchildren.
Subsequent Telegram posting by Russell Wangersky:
Russell Wangersky- November 4, 2012 at 08:35:08 "The posters are absolutely right: the correct number for Muskrat Falls power is $76 per megawatt hour, or 7.6 cents a kilowatt hour, which only goes to show even more the huge disparity between electricity prices. Misplaced decimal point - my error." Russell Wangersky
My further comment:
Yes, Thank you for clarifying the typo. It is interesting to note also, that the $76 / MWh was for 2010$, and that number (as I understand it) is now $87 for the year that Muskrat Falls is scheduled to come on stream (2017) --- and that compares to the TRUE 2017 'cost of service' cost of $214. .........So, from a layperson's perspective, the difference between the $214 and $87 costs gives you an indication of how much we are pushing OUR costs and debts unto our children and grandchildren........ The full amount has to be paid over the 50 year period and Nalcor has confirmed in writing that it is NOT "foregoing" its return on equity, but merely "deferring" it to future generations. Hence, Nalcor's claim that rates are stable "in the early years"....... Why should my children and yours, for 50 years, have to pay to provide near-zero cost power to mining companies ---- when it was our children and grandchildren instead that were supposed to get the benefit of near-zero cost Upper Churchill power in 2041 --- not locked into an unneeded, very high cost Muskrat Falls contract to satisfy mining companies until 2067?
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CBC Interview with NL's former consumer advocate, lawyer Dennis Browne
Nova Scotia (The Chronical Herald): "Muskrat Falls is a grandiose but flawed project", 20 October, 2012
LINK: http://thechronicleherald.ca/opinion/151368-surrette-muskrat-falls-is-a-grandiose-but-flawed-project
Independence is a wonderful thing
MHA Tom Osborne is calling for a public referendum
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Oct. 31, 2012, The Telegram ("The need for power is not proven")
The Real Reason for Muskrat (a project for the Labrador mining companies --- paid for, lock, stock and barrel by captive island ratepayers, especially our children and grandchildren)
So is anyone surprised to see that the real reason for Muskrat Falls is so that the mining giants of Labrador will get their power at 2 or 3 cents per KWh, while the real cost of this unneeded power (about 37 cents/KWh to build and transmit to the island) will (must) be paid for --- lock, stock and barrel by captive island ratepayers --- $21 billion AFTER 2041 (even though near-zero cost Upper Churchill power would have otherwise been available)? (see $21 billion graph below)
In effect, the benefit of near-zero cost Upper Churchill power will no longer be available to island ratepayers in 2041 ---- they will be locked into Muskrat's high cost, 50 year 'take or pay' contract until 2067 ---- What a travesty.
Muskrat will not only impose high cost power on our children and grandchildren until 2067, but will also deny them the benefit of near-zero cost Upper Churchill power, also until 2067
Provincial Government News Release
Natural Resources
November 1, 2012
Reports on Labrador Mining Support Need for Power Two reports on Labrador mining conclude that the mining industry has a significant impact of the economy of Newfoundland and Labrador, and that Muskrat Falls will be an important source of power for potential mining developments. The discussion documents, “Labrador mining and power – how much and where from?”, and “Economic Impact Analysis of Iron Ore Mining Industry in Labrador 2011-31”, were released today by the Department of Natural Resources. “The mining industry holds tremendous growth potential, with upwards of $10 billion to $15 billion of investment in Labrador mining projects possible over the next decade,” said the Honorable Jerome Kennedy, Minister of Natural Resources. “The reports released today support the conclusion that the development of potential projects will be dependent in part on the availability of power, and Muskrat Falls power is needed to support mining developments in Labrador.” Based on projects already in construction or near sanction, existing generating capacity in Labrador may be exhausted by 2015-2017, and Muskrat Falls could be an important source of power for mining developments post 2017. There are currently a number of mining projects at various states of development in Labrador. Voisey’s Bay, Wabush Mines, Iron Ore Company of Canada’s (IOC) Carol Lake and Labrador Iron Mines Ltd are in operation. IOC Concrete Expansion Program and Tata Steel Minerals Canada are currently in construction. The feasibility study for LIM Expansion is complete. Alderon Iron Ore Corporation’s Kami project, Tata Steel Canada Labmag project, Vale Inco’s Voisey’s Bay underground mine and Labec Century Iron Ore’s Joyce Lake are all undergoing feasibility studies. IOC Labrador West Strategic Development, North Atlantic Iron Corporation, Aurora’s Paladin Michelin project and Julienne Lake are all undergoing pre-feasibility studies. This Labrador mining paper examines the process of developing a mine, the importance of competitively priced power to development and the potential power requirements of some or all of these if projects were to proceed. To illustrate the economic importance of the mining industry to Newfoundland and Labrador, Dr. Wade Locke and Strategic Concepts, Inc. prepared the paper entitled, “Economic Impact Analysis of Iron Ore Mining Industry in Labrador 2011-31.” This paper highlights the economic impacts associated with the current and potential development of the iron ore industry in Labrador under four growth scenarios. Dr. Locke demonstrates that the forecasted capital and operating expenditures under each of the scenarios will have a significant impact of the economy of Newfoundland and Labrador. Dr. Locke’s report shows that the iron ore industry in Western Labrador already makes a major contribution to the province through employment, taxation revenue and contribution to gross domestic product (GDP). The growth scenarios developed by Dr. Locke show that production in Labrador could grow from the current 26 million tonnes per year to 81 million tonnes if all projects proposed were developed. Over a 21 year period, such growth would result in an additional $80 billion in new capital and operating expenditures, 358,000 person years of employment, and $117 billion in GDP. The provincial treasury would also see an additional $17.5 billion in tax revenue. “Muskrat Falls will be an important source of power for mining, and the availability of power for mining developments will encourage investment right here in our province, rather than in competing jurisdictions,” said Minister Kennedy. “Such mining developments would bring major economic benefit to the province which would benefit the people of our province today and for generations.” To view the full discussion papers, please visit: www.powerinourhands.ca . - 30 - Media contact:
Heather Maclean
Director of Communications
Department of Natural Resources
709-729-5282, 697-4137
[email protected] Key Points
Labrador mining and power – how much and where from?
- The provincial mining sector in 2012 is forecast to operate at strong levels, with mineral industry employment at all-time highs. In 2011-12, the minerals industry in Newfoundland and Labrador directly contributed $343 million to the province’s tax revenues.
- Upwards of $10 billion to $15 billion of investment in Labrador mining projects may be realized over the next decade, dependent in part on the availability and cost of power. If these projects proceed they will bring major economic benefits to the province, as well as provide significant opportunities for service and supply companies.
- Estimation of future power needs for planned mining developments is challenging, particularly as many projects have not advanced to where firm requests for power have been made.
- Muskrat Falls will be an important source of power for mining developments, and sanctioning of the project may assist mining companies in making positive investment decisions for Newfoundland and Labrador, which will bring significant benefits to the province.
- Availability of power will encourage investment in mining developments in the province rather than in competing jurisdictions.
- The Isolated Island option will not supply the power needed for Labrador mining developments.
Prepared by Dr. Wade Locke
- This report estimates the economic impacts associated with the current and potential development of the iron ore industry in Labrador under four growth scenarios. The purpose of the report is to generate a series of economic simulations that illustrate the significant economic impacts of iron ore mining developments in Labrador.
- The forecasted capital and operating expenditures under each of the scenarios will have a significant impact of the economy of Newfoundland and Labrador.
- The report shows that the iron ore industry in Western Labrador already makes a major contribution to the province through employment, taxation revenue and contribution to gross domestic product (GDP).
- The growth scenarios developed by Dr. Locke show that production in Labrador could grow from the current 26 million tonnes per year to 81 million tonnes if all projects proposed were developed. Over a 21 year period, such growth would result in an additional $80 billion in new capital and operating expenditures, 358,000 person years of employment, and $117 billion in GDP. The provincial treasury would also see an additional $17.5 billion in tax revenue.
WHO PAYS?
(and for how long)
CLICK IMAGE TO ENLARGE
CLICK IMAGE TO ENLARGE
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See info-graphic (left) and See link (below) to a "Review of “AIMS Commentary – The Muskrat Falls Hydro Project: Opportunities and Risks” 13 October 2012, 10:28 am, wherein Toronto energy consultant Tom Adams points out and references what was first highlighted here at Vision2041 (June 2012) --- that Muskrat Falls will cost island ratepayers, even AFTER 2041, $6.1 billion in debt servicing and operating costs alone (NOTE: the red and blue bar graph data at left is from Nalcor's powerpoint briefing to the media) See link (below) to Energy Consultant (Toronto) "Tom Adams Energy" website: http://www.tomadamsenergy.com/2012/10/13/review-of-aims-commentary-the-muskrat-falls-hydro-project-opportunities-and-risks/#more-2470 Ratepayers are being SUCKED IN NOW. Our children and grandchildren PAY LATER. Read on. See info-graphic (left), first highlighted here at Vision2041 in June 2012 and see link (below) to the Sir Robert Bond Papers blog wherein "JM" also points out that in order to be viable, Muskrat Falls will need to take BILLIONS of DOLLARS out of the pockets of captive island ratepayers http://bondpapers.blogspot.ca/2012/10/the-simple-litmus-test-nlpoli.html Also, a MUST READ article***** showing how Muskrat Falls costs are back-loaded on our children and grandchildren (if costs were not back-loaded, they would pay almost 10 times LESS for Muskrat Falls power) http://bondpapers.blogspot.ca/2012/10/the-dangers-of-being-mythbuster-50-is.html#more |
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NEWS
Excerpt from the National Post, October 6th, 2012 ----- "In 2010 $1.3B ‘mega-hospital’ was lauded. Today, the mystery behind it is the subject of police raids" -- http://news.nationalpost.com/2012/10/05/mcgill-university-health-centre/ "It was a day for superlatives. After a long contract bid process that was shrouded in mystery, construction of a $1.3-billion “mega-hospital” on Montreal’s west side could finally begin. A consortium led by hometown leviathan SNC-Lavalin Inc. had just won the contract to build and manage the largest public-private partnership project the city had ever seen. “Today is a momentous milestone for the McGill University Health Centre,” Conservative senator David Angus declared at the April 2010 announcement. McGill University Health Centre [MUHC] is one of Canada’s largest health care providers, and Mr. Angus was chairman of the board. Two years later, MUHC’s big hospital project is under police investigation. Questions are being raised about the public-private partnership, and whether illicit cash payments helped the SNC-Lavalin consortium win the MUHC contract. At least four key figures on each side of the bid process have left their respective organizations or have been removed. One is in a Swiss jail. Another’s precise whereabouts are unknown. Construction at the Glen site hospital campus in west Montreal continues, but no one wants to take credit for the $1.3-billion project anymore. And no one is willing to reveal who encouraged MUHC to give the lucrative deal to SNC-Lavalin, or why...." |
EXCERPT from The Telegram, 10 October 2012
"The provincial government announced today that a call for expressions of interest will be issued to seek proposals for the development of the Julienne Lake iron ore deposit in western Labrador. In late 2009, the provincial government embarked on a multi-phase program to better delineate the deposit’s commercial value. Funding of $2.6 million was provided to improve understanding of the Julienne Lake deposit and its potential market value to the province. Based on early success, a further $500,000 was allocated during exploration. The results of the Phase 2 report detail the completed exploration program and study, and define a geological resource consisting of over one billion tonnes at better than 33 per cent iron content. “The report concludes that the Julienne Lake iron ore deposit represents an opportunity to develop a major new mining project in the heart of an established mining community,” said Kennedy. “Although work performed to date is not sufficient for a pre-feasibility or feasibility study, Julienne Lake is considered an attractive project to developers.” The expression of interest can also be viewed at www.nr.gov.nl.ca. The deadline for submissions is Nov. 14, 2012. UNQUOTE Now I wonder who just might (after the expenditure of taxpayer exploration dollars) happen to be in the right place, at the right time (with more taxpayers dollars being spent to provide power by way of Muskrat Falls), to acquire rights to this Labrador resource? |
DECISION GATE PROCESS
Nalcor has used the Decision Gate process to corral our premier, cabinet ministers and MHAs into making (within weeks) a sanction or no sanction decision on a high cost, high debt, unneeded $8.5 billion Muskrat Falls project.
On the other hand, Nalcor has given Emera two (2) years (until July, 2014) to decide on whether or not to 'opt in' --- to decide whether or not to build a $1.2 billion maritime link to Nova Scotia.
If a maritime link to Nova Scotia is not built, all sales of excess Muskrat Falls power will, once again, have to go to (or through) Quebec ---- FOR PENNIES --- OR LESS.
If a link to the Maritimes has to be built by Nalcor (instead of Emera), billions more in debt servicing and operating costs (and much HIGHER ELECTRICITY RATES) will be borne by island ratepayers --- and even then, there is no guarantee that there will be a Maritime partner to ensure that Muskrat Falls power can even be sold into the Maritimes or to potential (?) New England markets --- and certainly, NOT AT A PROFIT.
In light of this province's previous experience with a locked-in 70-year Upper Churchill power contract, what independent-thinking, clear-minded person --- what premier, what cabinet minister, what MHA, what Newfoundlander and Labradorian would allow Nalcor to apply a Decision Gate planning process to its Muskrat Falls project in such a way so as to corral government into considering really only one option and thereby, in effect, force government to sanction, once again, another locked-in, long term (Muskrat Falls) project/contract --- all 'supposedly' for the purpose of replacing Holyrood (an existing $1.5 billion asset that is needed to provide only about 12% of the island's energy, and has nearly half its usable life remaining)?
FACT:- Contrary to what Nalcor, Minister Kennedy and Minister Marshall would have you believe --- Holyrood rarely operates at capacity. The only time Holyrood operates at capacity and burns 18,000 barrels of oil a day is for an average of 5.5 days a year (1.6% of the year), and in 2011? --- HOLYROOD DID NOT OPERATE AT CAPACITY AT ALL. SOURCE: Nalcor's Leadership Blog (see responses to questions section) -------- READ ON
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LOW OIL PRICES :
Ratepayers NOT PROTECTED -- WHY NOT?
In 2007, Premier Dunderdale said:
“the (oil) companies needed some downside protection if the price of oil went very, very low.”
Now why would offshore oil companies need to be "protected" against low oil prices?
If multi-billion dollar oil companies need protection against low oil prices, what will low oil prices mean for Muskrat Falls, for government, ----- for ratepayers ?
70% of the so-called cost advantage of Muskrat Falls is due to Nalcor's 50-year, high, very high, oil cost forecast.
In short, the viability of Muskrat Falls depends on oil prices going HIGH, and staying HIGH --- VERY HIGH.
So if oil prices go lower, (and oil companies are protected), will ratepayers also be 'protected' from the "locked-in" take or pay 50-year rates imposed by Muskrat Falls?
In short ------ NO.
If oil prices go low, ratepayers are still LOCKED IN to Nalcor's 50-year "take or pay" contract. That way, Nalcor is protected --- AT THE EXPENSE OF ratepayers!
So, since the Premier recognizes that oil companies (and Nalcor by way of its 50-year, 'take or pay' contract) need protection from low oil prices, why is that so? And why then is there no protection for ratepayers?
Since ratepayers are not protected, how then (and for whom) does Muskrat Falls make sense?
NOT HAVING "low oil price" protection for island ratepayers is the Muskrat Falls EQUIVALENT of a not having an "escalator" clause in the Upper Churchill contract.
Surely, that should be a non-starter.
LOW DEMAND:
Ratepayers NOT PROTECTED --- WHY NOT?
In the case of Muskrat Falls, ratepayers/taxpayers are doubly at risk. While Nalcor is also protected (through its 'take or pay' contract) against 'low demand', there is NO PROTECTION for ratepayers (and taxpayers) against low demand.
If demand is lower than forecast, Nalcor still MUST HAVE the hundreds of millions in cash flow every year to meet its debt servicing and operating costs ($14.5 billion over 50 years) --- and those BILLIONS must come from island ratepayers or taxpayers.
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And again, with respect to oil prices, here is what the Bank of Canada has to say:- (an excerpt from the Globe and Mail article "Mark Carney takes dimmer view of U.S., Europe, China", JEREMY TOROBIN, Jul. 18, 2012):
Also, from "All aboard the oil price roller coaster" by MICHAEL VAUGHAN, July 10, 2012 (Globe and Mail) ...
Ratepayers NOT PROTECTED -- WHY NOT?
In 2007, Premier Dunderdale said:
“the (oil) companies needed some downside protection if the price of oil went very, very low.”
Now why would offshore oil companies need to be "protected" against low oil prices?
If multi-billion dollar oil companies need protection against low oil prices, what will low oil prices mean for Muskrat Falls, for government, ----- for ratepayers ?
70% of the so-called cost advantage of Muskrat Falls is due to Nalcor's 50-year, high, very high, oil cost forecast.
In short, the viability of Muskrat Falls depends on oil prices going HIGH, and staying HIGH --- VERY HIGH.
So if oil prices go lower, (and oil companies are protected), will ratepayers also be 'protected' from the "locked-in" take or pay 50-year rates imposed by Muskrat Falls?
In short ------ NO.
If oil prices go low, ratepayers are still LOCKED IN to Nalcor's 50-year "take or pay" contract. That way, Nalcor is protected --- AT THE EXPENSE OF ratepayers!
So, since the Premier recognizes that oil companies (and Nalcor by way of its 50-year, 'take or pay' contract) need protection from low oil prices, why is that so? And why then is there no protection for ratepayers?
Since ratepayers are not protected, how then (and for whom) does Muskrat Falls make sense?
NOT HAVING "low oil price" protection for island ratepayers is the Muskrat Falls EQUIVALENT of a not having an "escalator" clause in the Upper Churchill contract.
Surely, that should be a non-starter.
LOW DEMAND:
Ratepayers NOT PROTECTED --- WHY NOT?
In the case of Muskrat Falls, ratepayers/taxpayers are doubly at risk. While Nalcor is also protected (through its 'take or pay' contract) against 'low demand', there is NO PROTECTION for ratepayers (and taxpayers) against low demand.
If demand is lower than forecast, Nalcor still MUST HAVE the hundreds of millions in cash flow every year to meet its debt servicing and operating costs ($14.5 billion over 50 years) --- and those BILLIONS must come from island ratepayers or taxpayers.
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And again, with respect to oil prices, here is what the Bank of Canada has to say:- (an excerpt from the Globe and Mail article "Mark Carney takes dimmer view of U.S., Europe, China", JEREMY TOROBIN, Jul. 18, 2012):
- "The Bank of Canada …warns that world prices for oil ... could be “substantially weaker” through 2014 than it was expecting three months ago..... Oil prices, which have fallen about 15 per cent since April, are “expected to be substantially weaker through 2014,” the bank said, “largely owing to diminished prospects for global demand.”
Also, from "All aboard the oil price roller coaster" by MICHAEL VAUGHAN, July 10, 2012 (Globe and Mail) ...
- "a study from Harvard (by Leonardo Maugeri, a former oil company senior executive who is now at the Kennedy School’s Belfer Center for Science and International Affairs)....says there’s been such a sharp increase in world oil production that the price of oil could “collapse” for the long term."
- He says that “The shale/tight oil boom in the United States is not a temporary bubble, but the most important revolution in the oil sector in decades,”….. His estimate is that the United States could …by 2020 become the second largest oil producer in the world after Saudi Arabia.
- The report’s bottom line is that the new production could lead to a sharp, long term drop in oil prices. Maugeri believes if oil prices remain above $70 per barrel, sufficient investment will occur to sustain continued growth in production, possibly leading to oil overproduction after 2015."
Sustainable Development ? ---- You decide.
"...development that meets the needs of the present without compromising the ability of future generations to meet their own needs" ... (socially, environmentally, and economically).
United Nations, Brundtland Report, 1987
To obtain Muskrat Falls power, NL Hydro (our 'regulated' company) will be required to sign a 50-year power purchase agreement ("take or pay" contract) with its parent (unregulated) company --- Nalcor.
This power purchase agreement will provide Nalcor a yearly cashflow (from year 2041 up to year 2067) that totals, for the 25 year period past 2041, $21 billion --- $21 billion that comes from back-loading unnecessarily high electricity rates on our children and grandchildren.
This back-loading will NEGATIVELY impact our children's and grandchildren's future economic condition, their potential for economic growth, and in turn, NEGATIVELY impact their social well being.
Forced by contract to pay very high (New York City level) Muskrat Falls electricity rates for 25 years past year 2041, our children and grand-children are thereby prevented from benefiting from our already fully paid for, NEAR-ZERO COST Upper Churchill power.
Since Muskrat Falls imposes unnecessarily very high electricity rates (and continued debt servicing costs) on our children and grand-children (and thereby hinders their future economic growth well past year 2041), Muskrat Falls does not by definition meet the social and economic criteria NECESSARY for sustainable development.
By relying on a 50-year power purchase agreement that back-loads high electricity rates and debt servicing costs on future generations and that effectively prevents our children and grand-children from availing of the benefits of NEAR-ZERO COST Upper Churchill power, Muskrat Falls compromises (both economically and socially) our children's and grandchildren's future.
Accordingly, Muskrat Falls FAILS TO MEET THE CRITERIA FOR SUSTAINABLE DEVELOPMENT --- and should not be sanctioned.
VISION2041
Instead of an unneeded, high cost, high-debt Muskrat Falls project, a Vision 2041 approach would rely on flexible, affordable, needs-focused bridging to meet ACTUAL island demand until 2041, and unlike Muskrat Falls, a Vision 2041 approach would not impede 2041 access to Upper Churchill power.
If island demand cannot be relied on ---- where will the revenue needed to pay down our INCREASED debt come from? HIGHER electricity rates? HIGHER taxes?
Muskrat Falls power sold to either the mining giants of Labrador or through outside sales to Emera --- can only be SOLD AT A SUBSTANTIAL LOSS.
As seen above, island electricity sales are far from assured. How then can it be said that Nalcor's forecast revenue from island ratepayers is a sound, rational basis on which to commit island ratepayers to a 50-year, multi-billion dollar, unneeded hydro project ?
Muskrat Falls power sold to either the mining giants of Labrador or through outside sales to Emera --- can only be SOLD AT A SUBSTANTIAL LOSS.
As seen above, island electricity sales are far from assured. How then can it be said that Nalcor's forecast revenue from island ratepayers is a sound, rational basis on which to commit island ratepayers to a 50-year, multi-billion dollar, unneeded hydro project ?
Please NOTE (see blue BAR graphs, above) that in later years our children and grandchildren will incur 'operating costs' that are about FOUR TIMES MORE THAN in the early years --- a continual INCREASE from about
$50 million/year to well OVER $200 million/year (for operating costs alone).
Sanctioning Muskrat Falls will mean that leading up to 2041, QUEBEC, once again, will be the ONLY market for our NEAR-ZERO cost Upper Churchill Power. In our
weakened fiscal position (due to our Muskrat Falls' debt burden and
increasing operating costs), we will HAVE NO CHOICE
but to once again sell Upper Churchill power
long term, to QUEBEC --- for
PENNIES.
NO WONDER
OTTAWA WANTS TO PROVIDE A
"LOAN GUARANTEE"
Will Muskrat Falls 'stabilize' electricity rates?
Click "RATES" (bottom, right)
This website has been established as a public service by Maurice E. Adams, Paradise, NL.
Comments welcome
Maurice Adams is a former federal public servant (Canadian Coast Guard, retired).
Experience in project planning and development, quality assurance, special projects and policy analysis.
Former --- air traffic controller (St. John's international airport), supervisor / marine traffic controller (St. John's/Placentia Bay), superintendent operational planning (Canadian Coast Guard), town councilor (Bishop's Cove, Conception Bay), member of the Fisheries Community Alliance;
founding and former co-owner/president of Eastern Contracting Ltd. (Mount Pearl), and former director of the
Progressive Conservative Party Association of Newfoundland and Labrador
(Conception Bay East/Bell Island)
MUN studies
Engineering, political science and philosophy
(incomplete)
2012.06.21
