This week's training at the Battery Hotel has afforded me a great view of the Confederation Building. I saw the big plume of dust on Monday when the House re-opened after being closed for nine months! Perhaps it was freezing fog!
From time to time, I get to missing the cut and thrust of the old political game. As much as I hate the partisan factor, there are many public issues at the moment that this blogger would like to be working on full-time.
Reading through Hansard, from Tuesdays’s question period, there was one exchange which caught my interest
Ms. Michael: Thank you very much, Mr. Speaker. Mr. Speaker, if we were able to have discussions in this House on the Muskrat Falls Project, perhaps we could have greater debate over the issues that are being brought forward right now. Last night in the media, the Premier said the House of Assembly is not informed to the degree it needs to be to determine whether or not government will sanction Muskrat Falls. Mr. Speaker, I ask the Premier to stand and explain to the hon. members, the elected representatives of the people of this Province, why she thinks they are not qualified to debate the biggest project this Province has faced to date.
Premier Dunderdale: Thank you, Mr. Speaker. Mr. Speaker, I am responding to remarks made by the Leader of the Third Party in that information is not available to them – information that is available on the PUB Web site, the government Web site, and the Nalcor Web site. When you do not know how to pull up information on a Web site and press print, you cannot blame somebody for questioning your ability or capacity.
I have previously commented about the narrow scope of the PUB terms of reference, and how is does not review critical elements of the project. This is a legitimate concern. The debate within the House of Assembly should not be limited by the terms of reference to the PUB. It should be extended to include the full extent of the project.
To contradict the Premier, not all information is readily available to the general public, nor the elected representatives. During the PUB process any question that was deemed outside the terms of reference, were not answered by NALCOR. Thus critical information about the project was not reviewed. The following 20 consumer questions were not answered within the PUB review.
1) CA/KPL-Nalcor 114: Hydro is subject to regulation by the PUB. Nalcor the developer of the 6.2 billion MF project is not subject to regulation by the PUB. Why are they not subject to regulation by the PUB.
2) CA/KPL-Nalcor 137: If Emera are taking 1.0 The throughout the next 35 years, with no energy charge, then will this factor along increase the cost to consumers on the island, who will be paying for 4.9 TWhr but will only have access to 3.9 and initially use only 2.0 TWh?
3) CA/KPL-Nalcor 147: Nalcor has decided to build MF through a Power Purchase Agreement between Nalcor Energy, a non-regulated company, and Newfoundland Hydro, a regulated public utility. MF will not become part of the regulated base rate of Hydro. How does the PUB perform its due diligence to ensure that the PPA represent the least cost of power while their operations remains outside the cost of service framework
4) CA/KPL-Nalcor-152: Will there be a separate corporate entity to facilitate the agreement between Emera and Nalcor
5) CA/KPL – Nalcor-154: Is there any precedent for a non-regulated transmission company to operate on the basis of a power transmission agreement? If not, will Emera become an equity participant in Newfoundland and Labrador
6) CA/KPL-Nalcor-156: Will Emera fully own the transmission line located on the island of Newfoundland? If so will they be subject to the regulatory authority of the PUB?
7) CA/KPL-Nalcor-161: Within Exhibit 101 there is a reference to a CPW for a Low Demand Profile. Nalcor are requested to provide how this will impact the cost to the consumer on a kwhr basis.
8) CA/KPL-Nalcor-162: The EMERA term sheet references the "NS Block of Power" which equates to 980 GWhr which is provided in exchange for construction of the Maritime Link, the enabler of additional power sales. However when considering the Muskrat Falls power purchase profile, assumed in the interconnected island case, there is a potential deficiency in total energy observed around 2035. NALCOR are requested to confirm if the EMERA commitment will provide an energy shortfall in the interconnected option?
9) CA/KPL–Nalcor 163: With respect to the potential power exports in the early stages of the project can it be confirmed that the revenue will be directed to lower rate payer rates. Please provide a Yes or No answer. (a) If Yes, what is the expected power sales, and how much will the rates decrease because of the Emera partnership (b) If No, please explain to the NL rate payer as to why not.
10) CA/KPL-Nalcor 168: NALCOR is requested to provide a CPW analysis for the interconnected island option with no Muskrat Falls, with Churchill Falls power available at a rate consistent with a Class L customer within Hydro-Quebec. This is roughly 2.97 cents per kwhr.
11) CA/KPL-Nalcor-169: Considering the 80 MW recall power, the 26 MW Portland Creek Facility and the additional system reliability provided by the LIL when is the anticipated period of peak and total energy deficiency in a delayed MF scenario?
12) CA/KPL-Nalcor-170: NALCOR appear to be utilizing an earned value assessment of combining schedule and costs. Based on the level of work currently completed what is the earned value assessment (Actual Cost of Work Performed, Budgeted Costs of Work Performed, Efficiency etc)
13) CA/KPL-Nalcor 175: Has a full analysis of EMERA power requirements been completed in Strategist. What additional capacity requirements are required for the interconnected scenario in the winter months? Has this been completed on an hourly basis over the full period of 2017 – 2067.
14) CA/KPL-Nalcor-175: Nalcor are requested to provide a monthly profile for MF generation, Island Consumption and potential export sales in the interconnected island option. This shall be for 2035 when there is a deficiency anticipated per the 980 GWhr commitment to Emera.
15) CA/KPL-Nalcor-178: What would be a realistic price for surplus energy considering that it is to be sold primarily in off peak times. The GWAC contract has a very pronounced difference in peak and non-peak rates in the winter (Peak = 22.8 $/MW-hr versus Non-Peak = 6.7$ $/MW-hr). Is this considered representative?
16) CA/KPL-Nalcor-179: Based on market rates in the final selling point, what would be he kw-hr value to the NL rate payer considering the transmission, tariffs and other charges which must be taken off the top?
17) CA/KPL-Nalcor-180: Does the predicted potential energy sales (largely in summer) have a higher CPW than the additional fuel and infrastructure costs required to meet the winter period demands required if the EMERA deal proceeds. Is there a clear commercial advantage to partnering with EMERA based on the current demand projections, or is it purely a form of risk mitigation if the demand profile does not materialize.
18) CA/KPL-Nalcor-227: Do other partners in the Muskrat Falls project share in overrun costs or does Newfoundland and Labrador pick-up the total cost of the overruns?
19) CA/KPL-Nalcor-231: How much of the total investment and cost of Muskrat Falls will go to the province of Quebec?
20) CA/KPL-Nalcor-267: According to recent testimony, considerable accuracy of estimate will be in hand for DG3 and gatekeeper review. Will the NL public have an opportunity for input after this input is in hand?
These are valid questions that I believe should be answered before the government gives Nalcor the green light to proceed through the next gate. I would like to add that the Government should advise the people now what the current estimates are for the project. I am sure this is readily known within NALCOR, and it should be communicated to the taxpayers who will be paying for the project, while there is still a chance for debate within the House of Assembly.
NALCOR should provide a CPW economic analysis of the project which includes the Maritime link, following the same methods as used within the PUB submission. This would include any loss of revenue associated with RECALL power not being wheeled through Quebec, any additional island generation required to meet the NS commitment (if any), and finally the potential upside from a realistic export sales of excess power.
This CPW analysis should include a reasonable estimate of future power demands in Labrador. This would provide a “apples to apples” comparison, which would help the elected officials and the general public to formulate an informed opinion on the entire project. I would be very interested to see this.
The government should also outline the process to project sanctioning, and how the decision will be made to partner with Emera. Consider Question 20 above which relates to the public input into the DG3 decision once the estimates are updated. The response from NALCOR was “This matter is within the purview of the Government of Newfoundland and Labrador”.
The question is now with the Premier to answer?