Monday, 28 April 2014


When the Public Utilities Board released the Interim Report of Liberty Consulting Group into the causes of DarkNL last week, it was Nalcor’s CEO Ed Martin, the man earning in excess of six hundred thousand dollars annually, who jumped in front of the cameras.

That’s big pay for damage control.

Nowhere to be seen was the senior man at Nalcor subsidiary, NL Hydro, V-P Rob Henderson.  Henderson was the first to emerge in the early days of the ‘black-outs’ to confess Hydro’s deficient maintenance practices; the Utility, he stated candidly, had failed to complete its summer maintenance program. It was January and the lights were out; people were cold in their homes or huddled in warming centers.   

Henderson disappeared from the public stage quickly; the honesty seemingly bad for Nalcor’s image and Ed Martin’s, too. Martin became the official spokesperson, not only for Muskrat Falls, but also for DarkNL.

Now, the Liberty Group has essentially confirmed Mr. Henderson’s version of events even if they were still understated.
It’s been nearly four months since DarkNL.  One does get tired of Ed Martin’s spit and spin.  Our long winters are a drag, too.  The body knows when it needs a shot of Vitamin C just as the mind craves the reassurance that simple honesty crowds the halls of government. 

It is no secret that the ‘spin meister’ is not big on disclosure.   But Liberty was not assessing the Muskrat Falls project or the current level of cost overruns.  The Consultants were merely assessing Hydro’s machinery, its capability to conduct normal maintenance and management procedures, review its demand assumptions and generally evaluate its ability to keep the lights on, especially in winter.

The Liberty Report, as The Telegram noted, does not describe a group of “world-class” experts. Having read the Report, the Paper’s Editor also concluded “there’s nothing world-class about this situation”.  

To its credit, Liberty baldly stated the facts. It cites failures in the “operation of key transmission equipment”, including a failure to replace transformers and maintain major circuit breakers.

Quoting again from the Report: “Liberty found that Hydro’s shortage of generation capacity was exacerbated by a failure to complete planned outage work needed to ensure the availability of its full range of generating facilities as the winter season began.”
The situation, it notes, “raises questions about Hydro’s operation” that it “did not complete recommended maintenance activities on the equipment that failed…”

The Liberty Report is damning criticism of a NL Hydro; a well-funded Utility by the ratepayers of this Province. And, it did not stop there.


Liberty said Hydro held an “insufficiency of generating resources to meet customer demands”…, that their demand numbers were based upon the temperatures of an average winter day rather than an “average worst winter day”, that Hydro wasn’t even using the right models to forecast electricity demand.

It stated that Hydro relied, not on providing adequate generating capacity but on ‘outages’ to take us through periods of high demand.    

Said Liberty, “Hydro has planned its system to the same overall standard for many decades. This standard provides for lower reliability than what Liberty has observed in other regions of North America” (emphasis added).  It noted that Hydro’s plan is based upon “roughly twice” the frequency of supply related outages than found elsewhere. It found that Hydro “tended to allow decisions at the margin to favor more versus less risk”. (emphasis added)

Liberty found that a “continuing and unacceptably high risk of outages from such causes
remains for the 2015-2017 winter seasons”. 

It failed to note that had the Vale Inco smelter been completed on schedule the outage crisis would have been far worse.

Among a plethora of additional problems it goes on to raise the spectre that, even after Muskrat Falls comes on stream, system reliability is in doubt; that is the major item to be addressed in its Fall Report.

Given Liberty’s indictment of Hydro, when Ed Martin faced the media quite possibly reporters thought him ready to apologize and to resign.  It would have been the right thing for the CEO to do.

Martin had no such plan.  He went before the media not to take responsibility but to place blame.  The man whose pay packet, last year, of $618,173 included a $141,425 "performance contract" came out ready to lay all the problems of Hydro at the feet of his predecessors.  No one cared to remind him he has been at Nalcor since 2005.

In the private sector, one whose management shortcomings are exposed in such grim detail, as Liberty describes, would be fired!  That is a necessary penalty for failures which placed lives at risk, not to mention the Province’s economy.

Yes, Rob Henderson should have been present to have his candor acknowledged.  But Premier Tom Marshall ought to have there, too, to inform Ed Martin his services are no longer required.