Monday, 24 September 2012

HOLDS A SECRET MEETING WITH THE ANONYMOUS "JM" (Part 1)

(Author's Note: After a fortuitous encounter with the anonymous, but very real "JM", the person whose 175 page Submission to the PUB on the Muskrat Falls was frequently referenced in that Agency's Final Report, the author and JM have agreed to write a three part Series dealing with certain critical issues pertaining to the Muskrat Falls project. Part 3 will disclose new issues regarding Muskrat which new research by "JM" has uncovered.  Today's Post is written by this Author; Parts 2 and 3 will be composed by "JM". Part 2 will be posted on Wednesday, September 26, 2012 and Part 3, a couple of days later .  While Uncle Gnarley is a fictional character, the issues dealt with in this Series, and in earlier Articles by the author, are real).
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“Now, Nav”, Gnarley continued, “who would have undertaken such a demanding project? Who would have made such a commitment knowing that he could neither benefit financially nor on an academic level?  After weeks of difficult research, the decision to sign off on the work, under the anonymous "JM", had to be tough.  Whoever JM is, Nav, I believe he left the signature of a real academic; a person in pursuit of the truth rather than any reward, not even self-aggrandizement”. 

That was Uncle Gnarley, in July, long after having read “JM’s” 175 page anonymous Submission to the PUB on the Muskrat Falls project.  That Agency had relied upon JM’s Brief to help it with its analysis, frequently quoting him in the Final Report. 
Now, Uncle Gnarley was sitting in my SUV, fidgeting and exhibiting his characteristic impatience as he waited to be driven to meet the same JM, the heretofore ‘anonymous’ expert on Muskrat Falls.  Impatient may not be the best word to described Uncle Gnarley’s demeanor; he wore an aspect that suggested ‘agitation’; some ‘dilemma’ was clearly causing him conflict and, on this occasion, I was not invited to assist with a resolution.  I wondered if it involved JM or if there was some other matter causing him distress.

The invitation had popped into my “Inbox”; not only had JM written a new Paper on Muskrat, entitled, Upper Churchill: The Unexplored Alternative, to which, I knew, Uncle Gnarley would want to give thoughtful consideration; it was accompanied by a request from JM to meet Uncle Gnarley face-to-face.


 JM’s new Paper clearly was intended to encourage greater public understanding of the Muskrat project, its pitfalls and the false assumptions Nalcor had devised; it proposed an alternative course to the Government for the purpose of ratcheting down at least some of the risk and the high cost of Muskrat Falls.  
Last time he and I talked, Uncle Gnarley had given a lengthy oration on Muskrat Falls, which had put him squarely in the camp of JM.  He had called it, Muskrat Falls: A Modest Proposal. 
Like JM, Uncle Gnarley had gone so far as to propose that the Muskrat Generation facility be postponed, at least for now, in favour of purchasing additional power from Hydro Quebec.  That additional power, together with the unused 80MWs of recall power, would satisfy the on-island demand Nalcor deemed necessary for the purpose of replacing the Holyrood Generating station. 

It would constitute cheaper power, too, because Hydro Quebec was now signing contracts with U.S. customers at the rate of 5-6 cents per KWh, rates that seemed in inexorable decline as a consequence of a new paradigm shift in consumption and conservation patterns emerging in the U.S. power market. Muskrat Falls power was estimated by Nalcor to cost 21.4 cents per KWh and that was before the 37% increase in project costs now making official rounds. 
Uncle Gnarley was uncomfortable with his ‘modest’ proposal, though he did finally give it support.  He preferred the energy mix and the controlled roll-out of the ‘isolated island’ option, as demand was proven.  The concept involved a number of different on-island components, like wind, small hydro project and renewal of Holyrood. 
The problem he was having had to do with basic economics; he felt that the transmission line offered inadequate ‘economies of scale’, given its cost, but that it would make sense if it was built to transmit a much larger block of Upper Churchill power.  Uncle Gnarley recognized that both JM’s plan and his ’modest proposal’ involved Hydro Quebec and that it held certain face-saving characteristics for the Dunderdale government. 
Gnarley was pleased that JM trusted him, not just for his considered analysis but for the
confidence that his anonymity would be safe.

As the car drove up to the lawyer’s office, where a well-known Solicitor had agreed to play host to the two men, Gnarley seemed in deep thought as to how he would address JM, what his opening comments would be, and how they would get on.
Within minutes Gnarley was seated in an anteroom and just as quickly, a stiff looking solicitor escorted us both to the Boardroom where JM was already present.

The lone figure in the room was a handsome, fit and clearly gifted, professional businessman.  JM quickly rose from his seat and, with a broad smile, identified himself to Gnarley.  I had not seen him look so pleased since I had given him a bottle of his favourite Scotch as a birthday gift, well before the Muskrat Falls issue has raised its ugly head. 
I could sense his delight.  The handshake was firm, the look of mutual respect spoke of two men who not only shared a genuine fear that the current crop of politicians had put the province in financial jeopardy over a small block of electric power; they were ‘cheek to jowl’, as John Crosbie would say, in the shared belief that the Muskrat Falls project, at least in its current form, had to be stopped.

The pair brought back thoughts I had, many years earlier, of Brian Peckford meeting Wayne Gretzky; both men shared a limo that organizers had arranged, as they headed to the same Awards ceremony as recipients. The spirit, energy and enthusiasm, which each evinced was nothing short of monumental even if those passions went in different directions. Uncle Gnarley and JM also shared a deep passion; saving NL from its politicians.
Said Uncle Gnarley to JM: “I admire your work on Muskrat Falls; it is a gift to your fellow Newfoundlanders and Labradorians.  I believe that you are a true patriot”. JM seemed to want to return the compliment, but Uncle Gnarley was already in stride, giving JM no chance to respond. 

“JM", Uncle Gnarley addressed the young man solemnly, as if he had been born to the appellation, ”I have a great fear that in our determination to stop what, by any measure, is a disastrous project for NL, we have become willing parties to something that is fundamentally wrong. 
“In making the proposal that NL purchase additional recall power from HQ and proceed with an extremely expensive transmission link to the island, all we have done is provided the government a chance to save face.  The idea would likely lower the risk and lower the cost; but it only means that tax payers will be screwed less than they will be if the full project goes ahead.

“Nalcor has already squandered half a billion dollars on Muskrat Falls under the cover of a government that ostensibly has not sanctioned it, and who continues to assert that no sanction will be given until the issue is debated in the House of Assembly though, as everyone knows, construction has already begun. 
“To say to Dunderdale: ‘it is fine to proceed with the transmission line to the Island and to waste one-half the excessive cost of Muskrat power, as long as you don’t waste “twice” as much, is a position I now find unacceptable.  The position holds no truth.  It rewards bad decision making.  It advances the undermining of democratic government.  It gives arrogance and arbitrary behaviour a seat for which there must never be room. It suggests government’s have no need of courage to pull back from bad decisions; it promotes the worst kind of politics.    

“After careful thought, I have come to the conclusion, that this government has to be forced, if necessary, to go back to first principles”, continued Uncle Gnarley.  “It has to have an open discussion of the demand figures on which Muskrat Falls is predicated, it has to complete a proper end use analysis of our power needs, as MHI has suggested; It has to come clean about the limitations of Muskrat Falls to produce sufficient power in the Winter months when this ‘run of river’ project will produce the least amount of power, it has to disclose the short comings of the Water Management Agreement, it has to reveal that Emera has made no commitment, it has to tell people the true cost of Muskrat Falls power and a whole lot more. 

And the government must begin this process by behaving evenly with the citizens, the voters, to whom it owes honesty and transparency.
“I just don’t think it is our job to find a way to let Dunderdale, Marshall and Kennedy off the hook; it is they who have conspired to squander the Province’s limited financial resources.

“Many people feel a sense of invincibility now; they believe in the illusion that the oil contained in our few wells will never run out, that it will always be there to finance bad decisions. 
“Perhaps they have to learn the hard way.  So be it.  I am not so much into saving people or politicians from themselves, as I am about preserving the fundamentals of our democratic process, of uncovering untruths especially when vested interests are at play”, Gnarley continued his rant. “People need information, they need transparency and honesty in order to make good decisions; if they then make the wrong choice, at least they will have shared in it. That is not now the case; the Government has no intention of engaging the public on this decision.

“JM, we have to battle Dunderdale and co. to the end.  As fearful as I feel, I will compromise no longer with the bastards!”
On that note, Uncle Gnarley arose and nodded in my direction.

JM arose too, but only to better access something concealed inside his briefcase.  The bottle had a familiar label; instantly I knew JM was not just a smart businessman, he was a diplomat, too. JM looked directly at the older man and whispered, in the language of the Highlands:  “Uncle Gnarley, I understand you occasionally take a ‘wee dram’”.  It wasn’t so much a question as a statement of incontrovertible fact.  In honor of this meeting, perhaps we can both christen this recent arrival, as he raised the bottle of Balvenie. 
It was his favourite scotch. A beaming Uncle Gnarley replied: “Nav”, nodding in my direction, “tells me you are a ‘rum and coke’ fellow”.  Replied JM, “that’s true.  But, not today! Scotch, as good as this, we can all enjoy, can’t we Nav”, as he offered glasses for me and the lawyer, too. 

“Of course”, JM added, without as much as a pause: “everything has its price”.  Now, Uncle Gnarley, you must hear what I have to say.

                                                            
 

2 comments:

  1. Great read...thanks!

    It is troubling that the local discussion about Quebec and the potential hydro opportunities and synergies.... is non existent.

    I am convinced that we can still get under the covers and dance along with HQ while sipping on a Laphroaig....this calls for something with peat!!

    The better deal to reach the "green of the week" while eliminating Holyrood.... could be achieved by dealing with Quebec. The thought of even going down that road would essentially bring the world wide TWITTER server to its knees....a real shame!

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  2. "Back to first principles,--open discussion of the demand figures,--complete a proper end use analysis of our power needs, as MHI suggested" These are key points. 99 percent of the discussion and analysis and the planned expenditures goes to the issue of which type of new power source is to be constructed, when this is all dependant on the "assumption" that this large power source is needed to meet our island demand. Island demand is primarily for electric space heat and hot water. Residential and small business is almost 75 percent of our total load.And these loads are very suitable for reduction of 50 percent in demand and 60 percent in energy use with efficient heating which is very cost effective. A good staged program can more than offset the normal load growth with efficiency reductions, and thereby also reduce Holyrood oil use. The potential is 600 MW reduction , with 400 MW practical. Some consider this priority as alternative to MF: small hydro, wind , conservation. I submit it should be : energy efficiency, small hydro, wind. End use analysis would prove this. Nfld Hydro and Nalcor don't intend to use this best method (end-use) approach. They consider there is uncertainity with this approach. So why are so many other utitities using this method with great success? There is little uncertainity as to the technology achieving the results noted above. My submission to the PUB on efficiency gives the arithemic. The cost to convert all houses in Nfld to eficient heating is about 1.6 billion dollars. About 300 million to convert to efficient hot water. And of course about 40 percent reduction on household energy bills from reduction in energy use. I would like to see if someone will discredit my arithemic here. Winston Adams

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