Monday, 15 July 2019

MUSKRAT: DOES DANNY BLAME THE PUBLIC, TOO?

It sure seemed that the words of Joseph de Maistre, the 18th century French Monarchist, moralist and philosopher, were being invoked once again — this time by Nalcor CEO Stan Marshall at the Muskrat Falls Inquiry. “Every nation gets the government it deserves,” asserted de Maistre, an advocate of social hierarchy (a system based on class division) in the period immediately following the French Revolution.

The Consumer Advocate’s legal Counsel, Chris Peddigrew, was questioning Marshall's assertion a day earlier when he opined that the vast majority of people in the province had supported the Muskrat Falls project and that, accordingly, we are all to blame for what has occurred.

Monday, 8 July 2019

LeBLANC’S ADVICE TO BALL AND SIX OTHER TAKEAWAYS

 The completion of testimony by Premier Dwight Ball on Friday, June 5th brought Phase II of the Muskrat Falls Inquiry to a close. His comments can easily be described as anti-climactic given the larger narrative that the Commissioner, Judge Richard LeBlanc, has heard. Yes, it was important to hear the Premier’s version of the events that led to Ed Martin’s departure as Nalcor CEO, and about the mess he faced having taken Office. But the Commissioner’s advice to the Premier at the end had far more relevance than anything Ball shared.

 It wasn’t as if the Premier had had the intestinal fortitude to let Mr. Martin grovel in front of a Judge pleading for his severance package. Or even that his lack of forthrightness leaves us doubtful how both “ratepayers” and “taxpayers” will escape Muskrat’s underestimated and misunderstood financial burden.

Thursday, 4 July 2019

STAN MARSHALL’S MUSKRAT BARGAIN: CAVEAT EMPTOR!

Nalcor CEO Stan Marshall gave testimony this week at the Muskrat Falls Inquiry.  During his examination he referred to the need to see the “big picture” as to the economics of Muskrat Falls. He said that this can best be done by explaining the cost of Muskrat Falls in cents per Kilowatt Hour, which makes it easier to understand than by using large numbers in the millions and billions.

His theme was that the project is not really all bad, the costs not unreasonable. When you look closely a different picture emerges from the one Stan has presented. The “big picture” is not nearly as rosy. Was his presentation an attempt to explain away the “boondoggle” or to rationalize it? 

Monday, 1 July 2019

BRENDAN PADDICK: NALCOR'S CHAIR OR CHEERLEADER?

Listening to Brendan Paddick, cable guru and Nalcor Board Chair, testifying at the Muskrat Falls Inquiry two weeks ago, constituted one of those “pinch me” moments when people esteemed for their successes, broad range of business and life experience, simply disappoint. 

That is not to dismiss or diminish Mr. Paddick’s accomplishments. Indeed, he may well be an inspiration to entrepreneurs seeking to discover the dimensions of their business acumen. And, it is right to acknowledge his and the Board Member's pro bono service which, while poor public policy, especially on heavily demanding Boards, still carries the obligation of their best work. 

Monday, 24 June 2019

QUEBEC APPEALS COURT BREAKS HQ STRANGLEHOLD ON MUSKRAT

The Decision by the Quebec Court of Appeal to overturn the Quebec Superior Court and grant CFLco the right to sell power in excess of the “Annual Energy Base” (AEB) seems to have reduced the province’s stress level. The obligations of CFLco in relation to the AEB is integral to the issue of water management and the abilty to efficiently run the Muskrat Falls plant. 

The Annual Energy Base was established in the original Upper Churchill Contract and states an amount of energy used to calculate minimum monthly payments by HQ to CFLco (and “ensure(s) a certain degree of stable revenue for CFLCo.”. This figure is also in dispute (footnote 53 of the Decision) but the amount is thought to be 28.97 million MWh — the figure used in three successive Nalcor Annual Reports.

Thursday, 20 June 2019

MUSKRAT: THE BIGGEST GAMBLE OF ALL

Guest Post by David Vardy
Recent disclosures at the Muskrat Falls Inquiry confirm that the project is on track to become a financial tsunami. Former Finance Minister Cathy Bennett told the Muskrat Falls Inquiry that the Department of Finance was marginalized in the decision-making process. This was confirmed by former Deputy Minister Donna Brewer when she was on the stand this week. Yet the provincial government played a pivotal role in the financing of Muskrat Falls. In fact this pivotal initiative was the biggest gamble ever taken by this province.

Monday, 17 June 2019

PAUL DAVIS KEPT LID ON RELEASE OF COST OVERRUNS PRIOR TO 2015 GENERAL ELECTION

The Commission of Inquiry into the Muskrat Falls Project has heard plenty of evidence regarding how Nalcor CEO ED Martin failed to report to either the Board or the Government the truth about cost overruns and the delay in the project schedule.

Nalcor’s deceit is only one sub-text of a larger issue, to be sure. Another is that the Board and the Government — politicians and bureaucrats — supported and accommodated Nalcor’s secrecy, most effectively by suppressing bad news under the guise of “commercial sensitivity”.  

The Inquiry has now heard evidence that the September 2015 costs, which had grown to $7.65 billion (up from $6.99 billion announced in June 2014), were significantly understated. First power would be late by two years, too. Concerns that Nalcor had understated those issues made their way into a new EY Report in the early part of 2015. The Report’s existence created a big problem for the Paul Davis Government. The bureaucrats on the Oversight Committee understood foot-dragging well and Nalcor were never found without reasons why the truth hardly mattered.

Thursday, 13 June 2019

FINANCE DEPARTMENT LEFT OUT OF MUSKRAT RISK ASSESSMENTS

Guest Post by David Vardy

Department of Finance Bypassed
Former Finance Minister Cathy Bennett told the Muskrat Falls Inquiry this week that upon her appointment to the Finance portfolio in 2015 she discovered the Department had been marginalized. Bennett said she was not going to allow it to continue. She invoked the Financial Administration Act (FAA) which provides broad powers to the Minister. She said that where there is conflict with Nalcor and its governing legislation, the Energy Corporation Act (ECA)  the FAA will trump the ECA.

Nalcor had been successful in bypassing not only the Department of Finance but also the Executive Council Office as well. Previous premiers had allowed the Nalcor CEO direct access to the Premier’s office and this allowed the Nalcor CEO to tell provincial officials that his actions had been approved by the Premier so they had better watch out. Most of these meetings went without formal record, unlike the Cabinet system where the Clerk issues official records of Cabinet decisions.

Monday, 10 June 2019

DOES CHES CROSBIE HAVE A FUTURE AS TORY LEADER?

The aftermath of the general election remains dominated by talk of recounts (especially in Labrador West), the NDP’s “balance of power” and, of course, P.C. Leader Ches Crosbie’s unscripted outburst on election night. In Minority Government Likely Short-Lived the Uncle Gnarley Blog allowed Premier Dwight Ball, at best, another year to get his affairs in order. A later Post entitled NDP Leader Alison Coffin Next Finance Minister? described the challenges that a mildly resurgent NDP will encounter as they navigate the terms for supporting Liberal dither.

Of course, the Tories didn’t exactly drop off the face of the Earth, having captured 43% of the popular vote in comparison with the Liberals’ 44%, and winning fifteen Seats. That is reason enough to consider what the election outcome says about the Tory Campaign and what it portends for Ches Crosbie.

Thursday, 30 May 2019

HOW GOVERNMENT HAS GOUGED RATEPAYERS FOR 30 YEARS

Guest Post by PlanetNL
PlanetNL26: Exposing Hydro’s Rural Deficit Account - Part 1
Very few Newfoundland Power (NP) customers know they will overpay their true cost of electricity this year by 12%.  Labrador Interconnected System (LIS) customers will also overpay by 16%.  Government has legislated the utilities to over-collect from these two sets of customers to subsidize high-cost rural and isolated regions.  Hydro calls it the Rural Deficit account.

This hefty involuntary subsidy grows annually as Government-imposed rate-setting policies for the rural and isolated regions widen the cost gaps.  NP customers especially, imminently threatened by severe rate increases arising from Muskrat Falls, are being counted upon by Government to pay a hefty price for Government policy goals.  Government needs to be brought to task to overhaul the mechanics of the Rural Deficit and the rate-setting policies in rural and isolated areas before a penny of Muskrat costs is levied upon ratepayers.

TIME TO END RATEPAYER SUBSIDY OF POWER TO ISOLATED TOWNS?

Guest Post by PlanetNL
PlanetNL27: End Ratepayer Funding of Hydro’s Rural Deficit Account

Part 1 of this 2-part post exposed NL Hydro’s Rural Deficit account and the trail of regressive Government policy that created it.  It was shown that the two lowest cost of service ratepayer groups in the province are heavily subsidizing rural and isolated customers.  This included a subsidy so deep on the coast of Labrador that it delivers power at 70% less than the rate paid by the Newfoundland Power ratepayers who backstop the vast majority of the subsidy funding!  

Part 2 explores what other jurisdictions with high-cost service areas are doing and attempts to identify best practices that need to be considered here.  The PUB hearing into Rate Mitigation Options and Impacts needs to be looking at all of these potential actions and Government needs to relent in legislating out the regressive subsidies and instead promote fair policies based on economic efficiency. 

Monday, 27 May 2019

NDP LEADER ALISON COFFIN NEXT FINANCE MINISTER?

DECISIONS FACING A RESURGENT NDP
Labrador West MHA-elect Jordan Brown told VOCM Open Line lastMonday that “he has some concerns about last month’s budget” and that his cooperation requires that “things have to change in addressing the fiscal reality facing the province.” Though Mr. Brown raised other issues too, this comment is interesting if only because it goes straight to the question of how the NDP will position themselves on budgetary issues in the new minority legislature.

Bear in mind that dissolution is the result if a Budget Bill or a Confidence Motion fails, unless the Tories can demonstrate to the Lieutenant Governor that they have the confidence of the House — which current math does not favour.

My guess is that, at this point, Jordan Brown’s comment is premature and that, as well-intentioned as it may be, Alison Coffin and Jim Dinn will introduce him to a lexicon that includes critical words of equivocation — including with respect to last month’s Liberal budget.

Monday, 20 May 2019

MINORITY GOVERNMENT LIKELY SHORT-LIVED

Last Thursday night’s result constitutes the worst possible election outcome.

In other jurisdictions, minority governments are notable by their brevity as much as for their instability and lack of progress on normally intractable problems. We have some of those. Locally, the 1971 election is our singular post-Confederation encounter with minority government. It was marked chiefly by chicanery — inducements to Members to switch Parties — and it was short-lived. We would never have to worry about something like that ever happening again, would we?

Many will see the election outcome as a judgement on Dwight Ball's leadership: his indecision and his lack of forthrightness. Indeed, his poor approval ratings were earned early and got worse. Why he was the centrepiece of the Liberal Campaign ads, I’ll never understand.

Wednesday, 15 May 2019

TIME TO TAKE REALISM TO THE POLLS

“An election is no time to discuss serious issues,” suggested Prime Minister Kim Campbell in the 1993 federal election — a comment for which she was mercilessly pilloried. In the current NL election, the Liberals, Tories and NDP have ignored the 'elephant in the room' - our impossibly large debt. One need only look at the thin veil that separates “Direct” from the “Total” debt to wonder why something as basic as fiscal solvency can completely escape mention.

Every accountant in the province knows that, as soon as the Government attempts to “mitigate” the power rates caused by the Muskrat debacle, the bondholders - followed by the Government - will be forced to move most of the so-called "self-financing utility Debt" into the “Direct Debt" column. That's the kind whose repayment depends on taxes and like revenues 

Unless, of course, people are prepared to pay 23 cents per kWh for their power or, failing that, the arrival of the tooth fairy. 

Sunday, 12 May 2019

WHAT TO MAKE OF THOSE CONFOUNDING POLLS

"Polls are for dogs" is an adage ascribed to Progressive Conservative John Diefenbaker, Canada's 13th Prime Minister. It is a view that voters ought to embrace, too, especially during election campaigns. Diefenbaker likely wasn't leading in the Polls when he made that quip, but there is still merit in the remark. 


Every hack loves Polls, as does the public. Who doesn't want to peer into the future? My advice: don't take them too seriously. There are many reasons why they will have no relationship with the outcome of the May 16th General Election. 

Context is found in the latest Poll from Abacus Data, giving the PCs five percentage points over the Liberals. A week earlier, an MQO Poll gave the Liberals a 12-point lead (among decided voters, 48% to 36%) with a 39% undecided factor.

Thursday, 9 May 2019

ELECTION - JUST ANOTHER PUMP AND DUMP?

CONTACTS COUNT
       (A shoo-in)

As President and CFO
In penny-stock promotion:
Of pump and dump, and shady guys -
Mr. Dicks can’t recall a portion.

If, he's Government elect,
With experience and contacts' dance
He's a defect select perfect
For Minister of Finance.

John Tuach
Pynns Brook
May 7, 2019

Monday, 6 May 2019

PEGNL AND WHAT ONE ENGINEER'S SANCTION REVEALS

A collapsed formworks incident on the Muskrat Falls project in 2017 exposed the public to problems unrelated to either cost or schedule overruns. When one worker was hospitalized and another seven received medical assistance it became clear, as much as Nalcor did its best to hide the fact, that Nalcor’s management problems resided not just in the St. John’s Office, but also extended to ‘boots on the ground’.

Not only the eight workers, some buried up to their necks in cement, can count themselves lucky. Nalcor management, too, were spared what the Courts might have deemed criminal negligence.

Why is the issue relevant again? Last week the Professional Engineers and Geoscientists of Newfoundland and Labrador (PEGNL) issued a public notice, having sanctioned one of their own. The notice read that structural engineer Yi Ping (Peter) Liu had allowed “his seal to be applied to the structural calculations and design documents of the Draft Tube Elbow Wood Formworks for the Lower Churchill Project at Muskrat Falls….which contained material errors in design criteria and design calculations and ultimately contributed to failure of the structure.”

Friday, 3 May 2019

PARTY LEADERS ASKED TO SUPPORT INDEPENDENT REVIEW NORTH SPUR SAFETY

Editor's Note: The Muskrat Falls Concerned Citizens Coalition distributed to the media, yesterday, correspondence between Dr. Lennart Elfgren and Dr. Stig Bernander with the Honorable Siobhan Coady, Minister of Natural Resources, together with a letter from Jim Gordon to the Minister. The same correspondence was sent to the leaders of the four political parties together with the request that, if elected, they will commit, prior to reservoir impoundment, to installing an independent geotechnical panel to review the safety of the North Spur. 

Monday, 29 April 2019

P3s - GOVERNMENT STILL IGNORING HIGH RISK

When candidates from either political party engage the public in this General Election, they might hear exasperation over the financial state of the province. Now that the Government has discovered a (relatively) new financing tool, Public Private Partnerships (P3s), with which to fund capital projects like hospitals and long-term care centres, everyone needs reminding that this new credit card has to be paid, too.

In 2017, Mary Shortall, Federation of Labour and CUPE local President, vigorously opposed the idea and issued her position following Ball’s announcement that the Corner Brook hospital would be built via P3. Unfortunately, her concerns sounded far too self-serving and the subject went quiet.

In the two years since, the Ball Government has taken a deep dive into the locally-untried P3 arena. Employed on occasion by most provinces, it is a scheme in which private contractors design, construct, maintain and finance facilities, often for a 30-year term. Typically, the government takes ownership of the facility when the contract ends.

Thursday, 25 April 2019

WHEN DOES DECEPTION BECOME A CRIME?

Guest Post by David Vardy
Have Nalcor and government officials transgressed against the law or have they simply neglected their duty to serve the province, notwithstanding the consequences of their actions? That is the question. 

Section 7 of the terms of reference of the Muskrat Falls Inquiry reads as follows:

“The commission of inquiry shall not express any conclusion or recommendation regarding the civil or criminal responsibility of any person or organization.”

This suggests that any action based on legal transgressions must begin outside of the Inquiry. As the Inquiry progresses through its second phase there may be evidence which will point clearly to violations of civil and/or criminal law. The question now is whether sufficient information has been compiled to determine what recourse the people of the province have as a result of the injury and damage to the public good.

Monday, 22 April 2019

PIXIE DUST SHOWERS SPRING ELECTION


Except for the ardent cynic, a sprinkling of magic transforms even the dullest bore. The Liberals hope that the majority of us still believe. That may explain the recent resplendent shower of pixie dust.

In February an MQO opinion survey put the Liberals (44%) and the Tories (42%) in a virtual tie. What has changed since then to bolster Liberal fortunes? Why call the election now rather than later? Why are Liberal election missiles falling from the sky?

In all likelihood, the numbers were not as bad for the Liberals as the MQO Poll indicated. While polls are a mere snapshot in time, any analysis gets weaker as statistics are bundled. The MQO Poll combined “decided” and “leaning” voters. 

Thursday, 18 April 2019

GILDING THE LILY ON 61 CENT POWER

Guest Post by David Vardy
At the recent Nalcor AGM CEO Stan Marshall repeated his mantra that Muskrat Falls will “finish strong”. He said that its costs are comparable to, if not lower than, the unit costs of other Canadian energy projects. The Chief Financial Officer bragged about the growing asset base and spent little time warning of the large liabilities.  When asked about dividends at the Muskrat Falls Inquiry the CFO said they were “rock solid”.

Nalcor’s annual report spoke in glowing terms about the project and about the profitability of Nalcor. The prospects of growing dividends were glowing. Suddenly the problems had vanished and we were living in a world of milk and honey. What had changed to spark this bright and cheerful outlook in the face of a financial disaster? Was Nalcor “gilding the lily” along with the politicians who are looking to sweep Muskrat Falls under the carpet in advance of imminent federal and provincial elections.

Wednesday, 17 April 2019

THE BUDGET: TRYING TO HAVE IT BOTH WAYS


On Tuesday, Finance Minister Tom Osborne delivered the Province’s seventh deficit Budget in a row. Only the Atlantic Accord arrangement, amounting to $2.5 billion, salvaged any pretense of the Government’s ability to manage the public accounts.

To hear the Finance Minister, you might have thought the Liberals had spent the last three years as a deficit slayer. In fact, all that has changed is a reduction in the capital funding for the Muskrat Falls project.

The Government’s first Budget in 2016 levied a bevy of taxes and fees on the public. They had no heart to right-size programs and operations. As it stands Current and Capital Account Expenditures have risen to $8.6 billion (Statement III). In contrast Revenues are only $6.2 billion (Statement II). The real deficit, in contrast to the numbers used by the Government ($575 million without the Atlantic Accord transfer) is actually $1.4 billion. Budgetary cash requirements exceed revenues by $1.86B.

Monday, 15 April 2019

CEO MORE POLITICAL TOOL THAN ECONOMIST

Guest Post by PlanetNL
PlanetNL25: Nalcor CEO – Economic Skills Are Non-Essential to the Position

At Nalcor’s Annual General Meeting last week, CEO Stan Marshall offered up a view on Muskrat not heard before.  He has chosen to reframe the Muskrat Project as a combination of a good generation project saddled down by the burden of much too costly transmission systems.  Stan further suggested that had Muskrat energy been sold exclusively via Quebec transmission routes, it would be considered an attractive project, the envy of those other provinces still building their questionably expensive hydro projects.

In the PlanetNL17 post, entitled Exploding Transmission Costs a Terrible Blunder, the cost of Muskrat Project transmission was analyzed and found to be just as stupidly expensive as Stan says.  It’s nice to agree with the utility occasionally.  His assertion that Muskrat generation could be economic, however, is a long way from reality.  This post does some quick calculations to show that Muskrat Falls generation in its simplest guise isn’t viable in any market.

Thursday, 11 April 2019

PUB REJECTS ROLE FOR COALITION IN RATE MITIGATION ISSUE

Guest Post By Muskrat Falls Concerned Citizens Coalition

When we applied for standing at the PUB hearing on rate mitigation we expected that the Board would welcome a broader spectrum of views than other intervenors could offer. We were surprised and disappointed to be turned down when the Muskrat Falls Concerned Citizens’ Coalition (MFCCC) application was rejected. The Board’s response of March 26, 2019 reads as follows:

Monday, 8 April 2019

TOWNIES vs BAYMEN – WILL TEMPERS FLARE?

Guest Post by PlanetNL
PlanetNL24: Time to Rezone the Island Grid


The matter of backup power needs on the Avalon, as analysed in PlanetNL23, brings into focus a bigger issue about fairness to the many off-Avalon ratepayers.  Nalcor’s Reliability and Resource Adequacy Study confirmed that Muskrat energy is to be delivered specifically to the Avalon end of Island grid to meet Avalon power needs.  The future addition of new Combustion Turbines (CTs) is also a response to  an Avalon-specific risk issue. The issue is not a new one – just an ignored one.  

The high cost Holyrood Thermal Generating Station existed principally to satisfy Avalon winter power needs while the off-Avalon portion of the Island Interconnected System (IIS) was essentially self-sufficient on low cost hydro-power.  Despite this inequality of need and inequality of cost of power, all IIS ratepayers pay an equal rate.  With Muskrat rate increases just around the corner, it’s time to put this issue under the spotlight and propose a fairer allocation of costs.

Thursday, 4 April 2019

ATLANTIC ACCORD: DEAL OF A CHARLATAN

One word describes Premier Ball. That word is “charlatan”. Other synonyms offered by Wikipedia include trickster, fraudster and hoaxer. All describe a person who is not forthright. Ball is selling his “Atlantic Accord” deal as something to be proud of. It is anything but.

On Monday, April 1st, the Premier announced in his own words “an agreement that ensures Newfoundlanders and Labradorians are the principal beneficiaries of their offshore resources, strengthens how those resources are developed through joint management, and will also achieve electricity rate mitigation.”

How “rate mitigation” for the Muskrat Falls project found its way into a deal about the Atlantic Accord, as former Premier Brian Peckford noted in his commentary, is baffling

Monday, 1 April 2019

NEW NL HYDRO CHIEF SHOULD START OVER

Denial and deception came easily to the politicians and bureaucrats who had the audacity to sanction Muskrat.  Jennifer Williams, the new NL Hydro President, should decide now if she will take a different path than that taken by the recent Hydro Executives who helped enable the project.


Hydro management remained quiet as Hydro’s Board of Directors imposed a 50-year “take or pay” contract on the province’s ratepayers — for the full capital cost of Muskrat Falls. This contract flies in the face of Hydro’s obligations to protect their customers and to supply power on an effective and efficient basis. The Board shares in the blame for the creation of an economic condition that threatens our economy and the affordability of basic heat and light. 

Thursday, 28 March 2019

BIRD FEEDERS AND THE ATLANTIC ACCORD

Guest Post by "Agent 13"
Bird Feeders and The Atlantic Accord
(who's running this place anyway) 

We have all heard the old joke about the Alien looking down at St. John’s and seeing humans picking up after their dogs, coming to the conclusion that the dogs must be in charge. 

This got me wondering what the same Alien might conclude if they listened to our local News.

Could they identify our Leaders?

For starters, a totally stressed City Council have figured out the pressing issue is that “some” people in St. John’s have too many bird feeders. They want an immediate stop to the trend. The City plans a new by-law. 

Monday, 25 March 2019

MORE PRE-SANCTION FRAUD OR INCOMPETENCE?

PlanetNL23: Backup Power Risks Reveal More Pre-Sanction Shenanigans

Two new reports on the Public Utilities Board (PUB) website shatter the illusion that the Muskrat Falls project will avoid the need for oil-fired generation in the province.  Upon decommissioning of the 490MW steam generation capacity at the Holyrood Thermal Generating Station, there is a critical reliability scenario arising in the all too likely event the Labrador Island Link (LIL) experiences an outage that will lead to a 500MW capacity deficit on the Avalon Peninsula.  Another report identifies that even when Muskrat runs optimally, there is insufficient capacity reserve without the addition of two new 58.5MW Combustion Turbines (CTs).

This new information gives further evidence of how Nalcor distorted the comparison of the Isolated vs Interconnected pre-sanction scenarios to favour Muskrat.  As reality sets in, Nalcor finds itself left with only one viable solution: the installation of several new diesel CTs, likely on the very same Holyrood site.  The irony of building the colossal Muskrat Falls megaproject for the purpose of closing Holyrood, only to find that a direct replacement must be constructed, is an astonishingly shameful exposure of Nalcor’s deceit.

Sunday, 24 March 2019

BARD'S QUESTION FOR THE AGING MASSES


WHEN FEEBLE COMES

A question for the aging masses:
When feeble comes,
Who’ll wipe our arses?

In this time of smartphone fret
And fixation on the internet,
If wiping can’t be done by app.

Thursday, 21 March 2019

FIFTEEN TAKEAWAYS PHASE I MUSKRAT FALLS INQUIRY

Guest Post by Muskrat Falls Concerned Citizens Coalition Members David Vardy, Ron Penney and Des Sullivan

Now that the second phase of the Inquiry has begun it may be helpful to take stock of where we are and what we have learned to date. 
Here are fifteen key issues on which the Inquiry Commissioner, Richard LeBlanc, must opine and about which the public should be informed. We have not attempted to assign priorities to them but we can say they that, while they are important, there are others issues that have been identified. We will post them another time.  

1.         When the Muskrat Falls project was sanctioned there was only a three per cent probability that the project would be completed on time, based on evidence provided by Nalcor’s risk consultant Richard Westney.

Monday, 18 March 2019

THE ATLANTIC ACCORD: BE AFRAID, BE VERY AFRAID

It is not a good feeling when government cannot be trusted.

Yet, notwithstanding all the partisan nonsense that props up one Party over another, it is the trust that government acts solely in the public interest that keeps the democratic system strong.

It is an issue that permeates many of the articles and comments that appear on this Blog. Underneath them is the fear, to phrase it in the vernacular, that the Ball Government will sell the Province down the river.

There is reason for that and, paradoxically as it may seem, the origins of such scepticism are found with Ball’s Tory predecessors.

Monday, 11 March 2019

BEWARE FEDERAL SHAPESHIFTING ON ATLANTIC ACCORD, WARNS CABOT MARTIN

Guest Post by Cabot Martin
Hooray for Uncle Gnarley for he has saved me from the sloth of procrastination!

Nearly a week had passed since former Premier Peckford’s letter appeared in the Saturday March 2nd edition of the St. John’s Telegram and I was still mulling over an appropriate way to support his views; maybe phone Paddy; maybe a letter to the Telegram.

So when Uncle Gnarley phoned last Thursday to ask me to write something on the Atlantic Accord mess, it didn’t take any convincing at all.

So to A. Brian’s excellent letter.

I was most struck by his comment on a possible change in the Accord that would see us being demoted from “principal beneficiary” to ”primary beneficiary” – a big change in a key, supposedly entrenched right.

Thursday, 7 March 2019

WERE SNC LAVALIN TROUBLES OPPORTUNISTIC FOR NALCOR?

Guest Post by David Vardy

SNC LAVALIN: THE MUSKRAT FALLS EXPERIENCE
SNC Lavalin’s role in the Muskrat Falls project has figured prominently in recent hearings of the Muskrat Falls Inquiry. On Friday the Inquiry heard from Nalcor’s senior procurement officer on the project’s management practices, including those which led to the selection of SNC Lavalin (SLI) as EPCM contractor in 2011 and to their removal from this role in 2013.

The New York Times had this to say on the biggest scandal facing Prime Minister Justin Trudeau:
“The case revolves around accusations that SNC-Lavalin, a multinational engineering company based in Quebec, paid 47.7 million Canadian dollars in bribes to officials in Libya to win contracts there, and defrauded the Libyan government and its agencies of 129.8 million Canadian dollars.

“The prime minister and his aides have been accused of pressuring his justice minister at the time, Jody Wilson-Raybould, to drop the criminal inquiry against the company because a conviction could potentially cost thousands of jobs in Canada, and diminish his Liberal Party’s political fortunes.”

Monday, 4 March 2019

WHEN POLITICIANS DON'T EVEN KNOW WHAT THEY DON'T KNOW

On the Witness Stand at the Muskrat Falls Inquiry, former Premier Paul Davis displayed the confidence of one who believed he knew what he was talking about. A confident Derrick Dalley, the former Tory Minister of Natural Resources, succeeded him. Trouble is, confidence is no substitute for the good judgment they ought to have brought to their senior positions.

Expected was leadership worldly-wise enough to understand the need for a process that assured “oversight” of the project at the highest level. The decision required personnel of international stature that was “earned” — not “awarded” by Kathy Dunderdale.  

Little wonder that Davis was once dubbed the “Corporal Premier” on this Blog, having admitted to the Inquiry that his chief source of information on Muskrat was Dalley.

Thursday, 28 February 2019

WILL THE PUB GO FAR ENOUGH ON RATE MITIGATION?

Guest Post by David Vardy
The PUB has been asked to make recommendations as to how increases in power rates arising from Muskrat Falls can be avoided, a daunting task indeed, but one for which they have been given a broad mandate.  They have just released an interim report on measures to increase revenues and reduce costs. Their work plan is quite ambitious and covers a wide range of options. The question is how far they will go and how receptive will government be to major changes?

Will they recommend the kind of surgery needed to right-size our electric power industry and to extirpate Nalcor as an unregulated monopoly? Will they go so far as to propose that Nalcor be removed from the power system after Muskrat Falls has been completed?

Monday, 25 February 2019

LAW SCHOOL IGNORES PROVINCE'S FISCAL POSITION

Guest Post by Ron Penney
On March 14th the Board of Regents of Memorial University will have it’s regularly scheduled meeting and it is anticipated that the issue of creating a new Law School at Memorial will be discussed.

The academic governing body of the University, the Senate, has approved the creation of the Law School but the final decision will be made by the Board of Regents, who will hopefully demonstrate more sense than Senate.

It is amazing that the most highly educated body in the Province, the Senate, is totally oblivious to our fiscal situation, which the Parliamentary Budget Officer describes as the most dire in the country.

Thursday, 21 February 2019

WHO TAKES ED MARTIN SERIOUSLY, ANYWAY?

When journalists interview Ed Martin, as CBC’s Terry Roberts did a few days ago, it is right to wonder if they go away laughing. 

Unfortunately, the reporter’s interview with Martin is found only on the CBC website, so images of him uproariously slapping his sides can only be imagined.

Terry Robert’s story is about Ed Martin dissing Astaldi. Martin thinks that the Company is “largely to blame for the massive cost and schedule overruns” experienced on the Muskrat Falls project.

Monday, 18 February 2019

FORENSIC AUDIT: NALCOR IGNORED BIG EARLY WARNING SIGNS

The Uncle Gnarley Blog has posted two commentaries on the second Forensic Audit Report of Grant Thornton released today by the Commission of Inquiry into the Muskrat Falls Project. Both articles were prepared by Ron Penney, David Vardy and Des Sullivan who have standing at the Inquiry on behalf of the Concerned Citizens Coalition. 

This piece contains  the key findings of the Forensic Audit. Also posted is a lengthier and more thorough examination of the Report entitled “Evidence of Malfeasance?: A Review of the Forensic Audit Report into the Muskrat Falls Project (Phase II)”.  It is availble now at the Link.  - Des Sullivan

HIGHLIGHTS OF SECOND FORENSIC AUDIT REPORT

As was the case with Phase One of the Muskrat Falls Inquiry, the construction phase of the Inquiry has commenced with the release today of the forensic audit conducted by Grant Thornton.

The audit sets the stage for the examination of witnesses crucial to the understanding of how the project went so badly wrong.

SECOND FORENSIC AUDIT REPORT: EVIDENCE OF MALFEASANCE?

EVIDENCE OF MALFEASANCE?: A REVIEW OF THE FORENSIC AUDIT REPORT INTO THE MUSKRAT FALLS PROJECT (PHASE II)

The second Forensic Audit Report prepared by the accounting firm of Grant Thornton has now been released to the public. It will constitute the major focus of Phase II, the “Construction Phase”, of the Commission of Inquiry into the Muskrat Falls Project (MFP).

This Report builds on the main conclusions of the first one released in September 2018, prior to the beginning of public hearings presided over by Judge Richard LeBlanc. It concluded that, at the time of sanction, a “combination of…potential misstatements may have resulted in the Interconnected Island Option (the Muskrat Falls project) no longer being considered the least cost option at the time of sanctioning.” In other words, had the Cumulative Present Worth (CPW) – the present value methodology used to compare the Isolated Island and the Interconnected Island options – been  objectively assessed, the Muskrat Falls Project was probably not then, or ever, “least-cost”.


What had GT uncovered in order to come to that conclusion?

Thursday, 14 February 2019

EVERY TOWN SHOULD VOTE A BARD (suggests the Bard of Pynn's Brook)


POET LAUREATES
(Poet Laureate appointee in St. John’s)

Every town should vote a bard
To rhyme events in its backyard,
To laud in lines the district scene
And entertain the tourist keen:

Poet Laureates sot in every bay
And hamlet pitched along the way,
To praise aloud the quaint and saint
And Council deeds heroic paint.

Monday, 11 February 2019

POLL CLEAR AS MUD BUT LIKELY CANCELS SPRING ELECTION


Is anyone surprised that the latest MQO Poll places both the Liberals (44%) and the Tories (42%) in (possibly) a statistical tie? While neophyte PC Party leader Ches Crosbie has had an uninspiring start, which — for the Tories — aligns well with a non-performing Government, why would the public be in anything but a “show me” mood? 


The Premier's approval numbers testify to the legitimacy of the questions. MQO gives Ball’s leadership a “relatively steady… mean score of 5.2 [on a 10 point scale] this quarter”. Crosbie, in spite of his inability to light any fires, oversees a jump in support of 7% as the NDP races to the status of non-entity. 


MQO comments that declining support for the NDP reflects in the Tories' gain, but that is tantamount to suggesting change in the chemistry of oil and water. More likely, a pervasive leadership vacuum is adding room for fluctuation in the popularity of the two traditional Parties, it being left to both mainstream and social media to set the public agenda based on whatever passes as news.

Friday, 8 February 2019

MF COALITION TO HOLD PUBLIC MEETING FEBUARY 13


Notice of General Meeting of the Muskrat Falls Concerned Citizens Coalition (MFCCC). Where? The Holiday Inn, 180 Portugal Cove Road, St. John’s (Salon A&B). When? 7:00 p.m., Wednesday, February 13th. Also live stream via Facebook and Twitter. 

David Vardy will make a Presentation. Ron Penney, Des Sullivan and Coalition lawyer, Geoff Budden, will also discuss the Muskrat Falls project and bring Coalition members, and the public, up to date on preparations for the Second Phase of the Public Inquiry.

Monday, 4 February 2019

THE TAIL WAGGING THE DOG


Guest Post by Ron Penney
The Tail Wagging The Dog: 
Reflections on Phase 1 of the Muskrat Falls Inquiry

The Muskrat Falls Inquiry has competed Phase 1 of the hearings, which focused on the events leading up to the sanction of the project on December 17th, 2012.

We hadn’t fully understood before the depths of hatred and contempt towards us arising out of our early warnings about the dangers of the path that we were on.

A senior federal public servant told us in 2011 that the tolerance for dissent in Newfoundland and Labrador was very low and that proved to be the case. So much for the notion that “dissent is the highest form of patriotism”. We were treated as unpatriotic because we opposed what has been turned out to be the worst public policy decision ever made in Newfoundland and Labrador.

Monday, 28 January 2019

"ANONYMOUS ENGINEER" IDENTIFIES DEVICE USED TO LOW-BALL ESTIMATE

EDITOR'S NOTE: The author of today's article is the whistleblower, dubbed the "Anonymous Engineer", who disclosed – on this Blog - falsification of the estimates for the Muskrat Falls project. That was January 30, 2017 . His comments were recorded in a post entitled Muskrat Cost Estimates "A Complete Falsification". A second post called Muskrat: Allegations of Phony Cost Estimates provided significant additional details of low-balling which ultimately were used to justify the Sanction of a project that has become a scourge on the Province's economy. His alarming assertions have been supported with revelations which emerged from Phase I of the Commission of Inquiry. This article attempts to shed light on an issue that is likely to be assessed during Phase II, often referred to as the Construction Phase. — Des Sullivan


Guest Post by the "Anonymous Engineer"
Impact of Labour Productivity on 
"Base Estimate" for the Muskrat Falls Project 

It is almost two years to the month since I spoke with the host of the Uncle Gnarley Blog, Des Sullivan, and subsequently with Anthony Germain of the CBC Morning Show. At that time I revealed that  the estimates on which the Muskrat Falls project was approved were low balled and falsified. I am confident that those statements were heard at the political level and that they might have influenced the Government's decision to  commence the Inquiry which, of course, I have been monitoring. 

Thursday, 24 January 2019

THE NEW RISK TO MUSKRAT: BLAMING THE JUDGE.

The latest Muskrat Falls Oversight Committee Report evokes all the excitement of yesterday’s breakfast. Released on November 22, 2018 it is a project status report to September 30. Where was I to find a sense of urgency in ancient history?

Gnawing at me, however, was Nalcor’s warning that the project Budget did not account for certain specific risks — chiefly protest unrest, unforeseen directives from Government and (wouldn’t you know it) the Muskrat Falls Commission of Inquiry. Those risks had been quantified by Westney Consulting as having a potential cost of between $170 million and $370 million. 
The Inquiry alone evidently endangers the MF Budget Estimate (that’s the $12.7 billion figure, not the one contrived) by between $45 and $165 million.

Monday, 21 January 2019

PREMIER'S CLAIM TO HUGE GDP GROWTH AMOUNTS TO FAKE NEWS

The Premier’s annual address to Rotary had all the content one would expect from a politician seeking re-election. It is no surprise, therefore, that Dwight Ball lauded his Administration’s accomplishments and signalled a warning to voters to ignore the “noise and fiction” expected from political opponents in an election year.

In the political arena, the mastery of synthetic truths is claimed by far too many.
Ball himself is well-known for the deceptive arts, having feigned innocence over the approved gold-plated boot in the derriere for Ed Martin. Last year he upped the ante with the assertion that neither taxpayers nor ratepayers will take the hit for the $12.7 billion Muskrat Falls project.  

Saturday, 12 January 2019

RATE MITIGATION - GRASPING AT STRAWS

Written by Des Sullivan and David Vardy
(with research and analysis contributed by PlanetNL)

The Ball Administration asked the PUB to examine alternatives to offer ratepayer relief from unaffordable Muskrat Falls power. Because the cost of rate mitigation is too large to be imposed on either ratepayers or taxpayers not that they can be distinguished the public should be wary that the PUB is possessed of a magic wand. The Government has essentially kicked the “mitigation” can down the road, too.

Having declined to suspend the project to examine the wisdom of continuation vs termination, the Premier was right to engage the PUB for the purpose. Unfortunately, the Provincial Government offered the PUB and its Consultants absolutely no guidance as to what interventions may be available from them or the Federal Government. Even a plethora of nips and tucks won’t suffice given the magnitude of the problem, yet they must know that MF threatens not just the public welfare but our collective solvency and, hence, the Province’s sovereignty, too. 

Monday, 7 January 2019

FINANCE MINISTER SHOULD LET EVERYONE SHARE IN THE GOOD NEWS

VOCM, in a year-end news story, quotes Finance Minister Tom Osborne saying that “the province has made some significant progress in the last three years in knocking down the deficit.” The Minister asserts that “in each of the last 3 years they’ve eliminated $2-billion from the deficit.”

Perhaps such comments should be dismissed as election fever builds and the propaganda machine is stoked. However, I do remember the Premier stating his commitment to transparency, and it is in that spirit Im hoping the Minister will release details of his quite fantastical assertion.

Could he also inform us why killing the deficit had to be such a painless exercise? How will we ever learn not to repeat the last decade of fiscal irresponsibility if correcting financial recklessness is done so easily?!?

Of course, I am being facetious.