Monday, 2 December 2019

MUSKRAT COSTS “HARD WIRED”?

Guest Post by David Vardy
In August of 2018 Premier Dwight Ball told us that ratepayers would not have to pay for Muskrat Falls. Recent news reports indicate that the Premier has met with the Prime Minister and further federal support will be announced in January.  Does this mean that Nalcor CEO Stan Marshall was wrong when he told the PUB the cost was inescapable? The PUB heard little in the way of proposals to lighten the burden other than the shifting of costs from ratepayers to taxpayers. This offers little comfort because for the most part we are all both ratepayers and taxpayers.

When presenting to the PUB on October 8, 2019 Nalcor’s CEO Stan Marshall said the cost of Muskrat Falls was “hard wired” or inescapable: “you got a hardwired cost, the regulator can’t do anything about that, I can’t do anything about that. The Provincial Government can’t do anything about that” (page 110). He said the PUB can exercise no control or oversight (page 112), nor can the Auditor General.

No Oversight by PUB
Legal counsel for the PUB asked (page 144) if there was an oversight role for the PUB including the right to deem certain costs to be imprudent and therefore disallowed. “Hard wiring” seems to preclude such oversight.  Are the financial arrangements as immutable as CEO Marshall claims they are? What are the arrangements currently in place?

The revenue requirements which must be paid, either from ratepayers or taxpayers, are enormous. In a presentation by Stan Marshall dated February 15, 2018 and entitled "Understanding Muskrat" he said that the project would add $808 million to the cost of the Island Interconnected system.  Another Nalcor document (IC-NLH-017,   attachment 1,LUEC tab) calculates that over the 50 year supply period, which begins when the project eventually comes on stream, the undiscounted costs will amount to $74.6 billion.  There will be some offset from fuel savings, export revenues, potential cost savings and electrification (e.g., electric vehicles) but the remaining burden will still be enormous.

MFI Terms of Reference
The report of the Muskrat Falls Commission of Inquiry will be released at the end of the month. How will it deal with the impact of the Muskrat Falls project on the financial obligations of the province? The Commissioner’s terms of reference, section 5(e), call upon him to consider: “the need to balance the interests of ratepayers and the interests of taxpayers in carrying out a large-scale publicly funded project”. As a minimum one would expect that the Commissioner will estimate and measure how the burden will likely be distributed between ratepayers and taxpayers.

We would expect as well, drawing upon 4 (a iii) of his terms of reference, that the Commissioner will attempt to estimate how much of an excess burden over least cost power resulted when government  empowered Nalcor to undertake this project and conferred monopoly powers by statute upon Nalcor. As Tom Baird pointed out in 2012 if the Muskrat power was least cost Nalcor would not have needed monopoly protection nor would the PUB be exempted from its normal regulatory role.

 In his interpretation of his terms of reference the Commissioner states: “At this stage of the Inquiry, I take this to mean that the Commission must look to how to balance or apportion the financial costs of an electrical generation project like Muskrat Falls as between power consumers and all of the Provinces' taxpayers.” (paragraph 49, ). I take no issue with this statement.

Non-recourse: What does it mean?
The project was sanctioned on the basis that 100% of the costs would be paid by ratepayers. Some of the legal documents speak to “non-recourse” to the province and its crown corporations, other than those corporations actually borrowing federally guaranteed money. In other words the taxpayer will be shielded from bearing the burden. This means that there were to be no financial obligations imposed other than those imposed on the four crown corporations, subsidiaries of Nalcor, identified in section 1.4 of the loan guarantee of November 30, 2012. However the legal issues are more intricate and will need to be weighed by the Commissioner, along with the economic forces, which cannot be ignored. Let us look at the legal obligations.  Full disclosure: I am not a lawyer.  
David A. Vardy
Province disavows obligations of Nalcor/Hydro
In late 2012 the  province enacted changes to the legislation governing Nalcor Energy and NL Hydro, specifically section 3.1 of the Energy Corporation Act and 3.1 of the Hydro Corporation Act.

Section 3.1 of the Energy Corporation Act includes the following: “the Crown shall not be liable as principal in contract, tort or otherwise at law or equity for the liabilities of the corporation created directly or indirectly by those contracts or arrangements.” If the Cabinet has approved the contract and if the contract explicitly makes the corporation an agent of the Crown then the Crown can be bound. A similar revision was made to the Hydro Corporation Act except there was no exception identified where the Crown could be bound or obligated to assume obligations from the Corporation corresponding to that in the Energy Corporation Act.

PPA leaves NL Hydro unshielded?
The power purchase agreement dated November 29, 2013 calls for NL Hydro to pay all revenue requirements when billed. The Power Purchase Agreement at Muskrat Falls Inquiry Exhibit P-00457, between NL Hydro (NLH) and the Muskrat Falls Corporation (MFC), signed November 29, 2013, provides for a return on equity and a return of equity. Section 1 of Schedule 1 includes the following Definition:

“Base Block Capital Costs Recovery” or “BBCCR” means the recovery over the Supply Period of the following costs, without duplication:

(a) Development Capital Costs, which shall provide for the repayment of principal under

the Financing and the return of equity capital to the equity holder;

(b) Development Financing Costs; and

(c) Distributions to equity holders sufficient to enable Muskrat to achieve its Assigned

IRR;”

Section 14.4 of Schedule 1 to the Power Purchase Agreement defines an “event of default” for NLH. The Grant Thornton Report prepared for the MFI, at Exhibit P-00454, on page 38, makes the following statement:

“The PPA provides specific remedies if Base Block Payments are not made.  In particular, if NLH fails to make the necessary Base Block Payments while MFCo  continues to be in compliance with this agreement, MFCo may provide notice to NLH it is invoking their rights under the PPA which requires that within 10 days of providing such  notice, if NLH has not paid the outstanding payment, NLH is required to pay a lump sum  amount equal to the full repayment of the debt financing (including principal, accrued  interest and any premiums) plus any associated costs (including legal, advisory, transaction  and administrative costs).”

The PPA is backed up by the Exemption orders, also issued on November 29, 2013. Order-in-Council 2013-343 orders that the PUB include as costs, expenses or allowances “without disallowance, reduction or alteration of those amounts, in Newfoundland and Labrador Hydro’s cost of service calculation in any rate application and rate setting process, so that those costs, expenses or allowances shall be recovered in full by Newfoundland and Labrador Hydro in Island interconnected rates charged to the appropriate classes of ratepayers.”

Do these statutory amendments and Orders-in-Council, in concert with the infamous power purchase agreement between two subsidiaries of Nalcor, relieve the province of any financial obligations? If NL Hydro, the province’s largest utility, goes into default and cannot pay its bills can the province walk away from the obligations? This leaves a huge gaping question as to who will make the payments when ratepayers can pay no more. 
Loan guarantee agreement-undertakings by province
There is another side to this story, one which raises questions about the immunity of the provincial Treasury from the obligations from Muskrat Falls. Let us go back to the November 29, 2012 loan guarantee agreement, which was confirmed a year later in an intergovernmental agreement dated November 29, 2013. Section 3 of Schedule B of the intergovernmental agreement places the following obligation upon the province  with respect to the Muskrat Falls Corporation: “Ensure that, upon MF achieving in-service, the regulated rates for Newfoundland and Labrador Hydro (“NLH”) will allow it to collect sufficient revenue in each year to enable NLH to recover those amounts incurred for the purchase and delivery of energy from MF, including those costs incurred by NLH pursuant to any applicable power purchase agreement (“PPA”) between NLH and the relevant subsidiary or entity controlled by Nalcor that will provide for a recovery of costs over the term of the PPA.”  This places an obligation upon the province but it is not clear what the limitations are or if it breaches the provincial shield created by the statutory amendments to the Energy Corporation Act and the Hydro Corporation Act.

There is a “Whereas Clause C”, in the same intergovernmental agreement, which refers to a “condition precedent” that “NL agreed to indemnify Canada for any costs that it may incur under the Federal Loan Guarantee as a result of a regulatory decision or regulatory change (including through legislation or policy) that prevents the Project Entities from being able to recover Project Costs and fully service the debt guaranteed by Canada under the Federal Loan Guarantee;”

Full Rate Recovery Unacceptable
In his presentation Understanding Muskrat, Nalcor CEO Stan Marshall showed that, in order to achieve full cost recovery, power rates would need to be set at 22.89 cents/KWh. Nalcor probably understood that such a dramatic increase in rates would not only be unaffordable but was also completely unachievable, due to consumer resistance and ratepayer switching to alternative forms of energy.  To establish such rates would create a utility death spiral.

Such a high rate would have been unacceptable to ratepayers. Government responded by announcing a rate mitigation plan which would keep rates at 13.5 cents per KWh. This was based on  revised revenue requirement of $726 million for 2021, down from $808 million, even though  the capital cost estimate has not been reduced).  Is this a “policy change” which “prevents the Project Entities from being able to recover Project Costs”, namely the policy decision to keep rates at 13.5 cents and not force the system to the limit at 22.89 cents/KWh? Is it an event of default?

In calculating the $726 million in revenue requirements for 2021 Nalcor included dividends on Emera’s investment. This investment is shown in the consolidated financial statements of Nalcor as a liability, with a cost to Nalcor of 8.5%. The latest Nalcor estimate (from PB-519-2019) of Emera’s investment is $865 million. Government’s rate mitigation plan, by accepting the $726 million as the target for mitigation, takes responsibility for these payments. The question this provokes is whether government has now accepted the full 50 year revenue requirements of $74.6 billion as a financial obligation of the province, including debt repayment? 

Conclusion
Did the government understand that such an intervention by the province might trigger financial obligations under the provisions of the loan guarantee agreement? Or did they seek legal advice to confirm that the statutory amendments, the regulatory exemptions and the power purchase agreement would continue to shield the province from liability? Or was the shield against financial exposure simply a façade from the beginning?

Did the federal loan guarantee place the province squarely on the hook not only for providing a “completion guarantee”, including all necessary equity funds to complete the project, but also for ensuring that all revenue requirements are paid? Does this mean that the taxpayer is fully obligated to make payments to cover any shortfall? Our net debt is currently $15.7 billion. If Muskrat fails then could this potentially add more than $12.7 billion to our net debt?

Will the legal shields erected by the province stand up against the storm of financial pressure which Muskrat Falls brings upon us, with costs continuing to escalate and as the target date for first power passes by without notice. The latest Oversight Committee report dated October 15, 2019 shows the date for first power from Muskrat Falls as October 15, 2019, the same date (page 49/52).  This target has come and gone as have others. Further delays will add to the capital cost which will in turn raise the revenue requirements over the 50 year supply period. The recent Liberty report warns of further delays because of problems with transmission software and additional problems with synchronous condensers.

The Muskrat Falls Concerned Citizens Coalition raised a number of questions at the Inquiry to determine the financial obligations falling to the province. Unfortunately many of the most probing questions remain unanswered. The challenge facing the Commissioner is a daunting one. The fiscal impact of the project remains the elephant in the room and must be addressed sooner rather than later.

David Vardy






39 comments:

  1. Politics: the art of the possible? A federal bailout of sorts?

    Recently I was asked if DC transmission could have permitted NL to export power to the USA in the 1960s, instead of feeding the HQ grid.
    I came across the info on DC transmission in Manitoba from the Nelson River. I have at times referenced the Port Nelson boondoggle of 1913-1918,and presently, a century later, a heritage panel planned for Spoon Cove showing the schooner Village Belle, salvaged from Port Nelson in 1918. Enroute on the Nelson 200 miles by canoe, the salvage crew of Nflders passed Kettle Rapids, the journal says.
    In the 1960s Kettle Rapids was developed with DC transmission.
    Only part of the load was utilized, so a financial problem. The solution: the Federal Govn took the responsibility for 20 years as to costs until the load grew and Manitoba could then take the responsibility.
    Is a similar option available for NL as to MFs? The art of the possible?
    Winston Adams

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  2. This an ugly mess that will only get resolved after many years of litigation.

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  3. Seems the question Mr. Vardy raises is if we play around with fire, without knowing what we are doing, will we get burnt. That is, the government taking on the responsibility through RATE MITIGATION mean that we have assumed responsibility and now accepting the full 50 year Undiscounted requirement of 74.6$ billion as the provincial financial obligation. Will this create a night mare for ball and his advisors and legals in talks with the Feds to cement us into that obligation through rate mitigation. Stan and nalcor has stated their case, that the rate payer is "hard wired" in at 22.89. Will the rate mitigation from the Feds be for the entire 50 years or just short term ask Joe blow, or will the lawyers have a field day in the long term. Too complicated for the average Joe or Jane, but people will say that's what we are voting for.

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  4. Muskrat Falls Costs “Hard Wired” into Power Rates
    At the time of project sanction we were told that all was well. We could rest assured that the province was protected from liability arising from Muskrat Falls. We were told that amendments to the Energy Corporation Act and the Hydro Corporation Act would shield us from financial exposure. We were told that the power purchase agreement would ensure that only ratepayers would be expected to pay. The government of the day issued executive orders which required the Public Utilities Board to ensure that all costs, known as annual “revenue requirements,” would be charged to Newfoundland Power and to all Hydro customers, without question and without any effort to disallow them. Even if the PUB could prove the investment was imprudent they could do nothing except approve higher rates to recover the cost.
    Those who sanctioned the project in 2012 did not foresee that the costs had been systematically contrived. They were vastly understated. Now that we have a better understanding of the cost we know they are too high to be recovered from ratepayers. Yet we are told that they are inexorably and immutably “hard wired” into power rates, which must be recovered. The government’s rate mitigation program is an acknowledgement that such recovery through rates is impossible. The federal loan guarantee agreement ultimately places the burden on the province. How this comports with the legislative shields is a question for legal disputation.
    The power purchase agreement between two subsidiaries of Nalcor places the onus on NL Hydro to pay the bills. If Hydro cannot pay the bills, who will pay them, if not the province? How can the province turn its back on its Crown-owned utility? Clearly the province’s intervention through its rate mitigation program places the provincial Treasury in the direct line of fire.
    Yet in our distressed situation neither the ratepayer nor the taxpayer can bear this burden, however “hard wired” they may be. The situation is murky and none of the evidence at the Muskrat Falls Inquiry made it any clearer. The Muskrat Falls Concerned Citizens Coalition sought clarification from witnesses at the Inquiry. No clarification was on offer, nor has the PUB hearing into rate mitigation dealt with the fiscal impact of the project and on its credit rating. They are due to report at the end of January 2020. How will the Commissioner deal with the elephant in the room in his report which is due in only 29 short days from today?

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    Replies
    1. Vardy @ 10:28:

      You noted the ECA language of MF corp not being able to bind the crown but this language is absent from the NL Hydro act.

      Pretty typical, when companies I have worked for formed short term joint ventures we included similar language such as to leave liabilities project 'isolated' and not bind the partners beyond the specific project.

      What this tells me, is that there is the intent:
      1) spin off MF to either CFLco or some other entity (including Emera, HQ etc) and an intent to sub-divide assetc (ie LIL, LTA, SP, generation etc)
      2) or there was doubts on if it could be done and they was a hedging of bets on an insurance backdoor


      Bottom line though, even if you cant find the language - I cant see any avenue for the province not being liable for liabilities to NS, the Fed government and contractors as a result of MF. This is why I have always said since the FLG was endorsed(and possibly before financial completion) that the NL public was on the hook and completion was the only option.


      PENG2

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    2. When the Atomic Energy deal became an embarrassment to the Federal Government, the PM of the day gifted the public assets to SNC-Lavelin. What better way to hide any further Inquiries and continued obfuscation as to where the money went, and why the transmission towers fell?

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  5. Back to the future: On VOCM Paddy Daly, on MFs boondoggle this morning, said wind power could only be used up to 10 % of our capacity, not his statement but the "experts" he said.
    That falsehood is like the 18,000 bls per day of oil burned at Holyrood.
    These questions are not going away, as AJs ask: why we have almost no wind power.And too MFs reliability lingers as to outages.
    There was a contrived report, with "constrictions" for assumptions deliberate to create the 10% limit. No dive, deep or shallow by Leblanc into this deception. Does PENG2 acknowledge this deception by Nalcor?
    VOCM repeating the big lie, and people believe it. The experts said it says Paddy, .......we know now, generally, how expert all these Nalcor reports were.
    Texas at times hitting 40 % wind energy, but we couldn't do more than 10%! Who was that consultant? Oh yes ....Hatch.
    Winston Adams

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    1. WA @ 10:57:

      LeBlanc is not limited to what is said in testimony when forming his opinion - he does have the ability to reference other docs and can request clarification on his own. Reference rules of evidence - he can ignore 100% what is said, accept 100% or somewhere in between.

      Personally, I will wait for his report, and I wont comment on his manner of conducting the Inquiry until after the final report is out - until then its a bit of 'the sky is falling' mentality....

      PENG2

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    2. Look at windy.com for a live map of wind on this planet, and Newfoundland is one of the windiest places on the planet. Wind power would be great here and there is no need to go offshore for a breeze. I believe the wind moratorium was to help with lie that Muskrat Falls power was needed.

      I installed a energy submeter on the heat pump and for the calendar month of November, it took 900 kWh to heat a circa 2003, four bedroom home built to the building code minimums. Heat was 23C day, 18C night so nobody suffered.

      Add your August bill as baseload (e.g. no heat) to 900kWh and compare this with your November bill. This will give you a good idea of the kind of savings to expect by switching away from electric baseboard. Demand is going to go Way down and heat pumps are getting better every year too.

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    3. Compare capital recovery factors BC solar project with Muskrat;

      https://www.cbc.ca/news/canada/british-columbia/solar-power-community-bc-1.5380369

      NALCOR was/is just plain fraud, committed to "least cost alternative"? Lied to us all, abetted by the Feds. What is Osborne doing with all the offshore oil Revenues? Have carrying costs for Muskrat already kicked in? Can learned Economists at MUN do some explaining?

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    4. PENG2

      Hopefully Justice LeBlanc will have a complete section on voting trends causing Muskrat Falls?

      If not I'm guessing you won't endorse his report?

      Yup!

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    5. PENG2, you said you were all go for technical discussion, but defer to Leblanc who may ignore the lie of poor wind intergration limit of 10% (now only at 2 %). Limits on wind uptake may not be your area of expertise, but you can easily get informed. If you think the AJs of this province should understand all the complexities of the MFs scheme prior to sanction, then the wind issue should be duck soup for you to comment, much easier than Leblanc. Show your technical skill instead of ducking the issue.
      Winston

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    6. WA @ 13:55:

      You are assuming that LeBlanc is going to take the word of 1 witness over another - I am not sure either you or me have enough knowledge to say he will or won’t interpret the grid deficiencies. There is more than enough documentation submitted to both the PUB and referenced in Inquiry/PUB submissions that makes it unlikely he (as you say) '...may ignore the lie....'.

      I won’t get into chicken little stuff - and really, you should know better considering some of your submissions are readily available for his review.


      And to be accurate, I never said the AJs should understand the complexities - just there was enough PUBLIC dissension for the AJs to want to ask more questions and not act as lemmings in endorsing/approving MF.


      Now, I will throw out 1 other point for discussion - why would we as an AJ in the public expect our MHAs to know better? By my count, we have had very few technically competent MHAs and none that are construction experts since confederation - so, if we expect our MHAs to be able to digest the MF web, doesn’t that lend itself to the argument that we the public should also?


      To, BFA above(and a few days ago) – go to ‘youtube’ and search for Paul Lane’s interview with VOCM around October 2017 – maybe you want to reconsider your respect for this ‘guy’?



      PENG2

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    7. Anon 11:25: some comments that align with yours.

      I have a monitor on my MSHP circuit (2 units, 40,000btu total) and I use it similar to you and i observed typically 20kwh per day last month. January 2019 was the only month that reached barely over 30kwh average per day for me. That's just 1250watts average heating in the coldest month folks - about 0.5w per square foot in an ordinary 80s built St. John's detached house.

      A comment about wind and it being intermittent. Heating requirements spike when the wind blows therefore logic says wind power supply would be pretty much guaranteed on peak load days wouldn't it? Nalcor and Government have struggled to accept such truths though. If it were not for Muskrat we should've built 500MW+ but there might still be a case for 200MW or so.

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    8. PENG2, sorry I could not do more as to submissions, or aiding the MFCCC team.
      However, prior to sanction if 10 or a dozen experienced engineers,from a sense of duty, from different fields, went public, to inform both the public and the MHAs of the almost certain high risks of the boondoggle of MFs, and the lowest cost and reliable alternatives, perhaps as a group we could have countered Nalcor's PR and brought common sense to the public? Maybe then it would have given Stan courage to have Nfld Power chime in with their expertise? Instead we get the cone of silence, still yet. All knowledgeable engineers especially, except Bruneau, kept silent.Me , sniping a bit from a distance.
      Maybe Leblanc will note that as a failure to public duty?
      So too for a team of economists to counter Wade Locke?
      You say many did. I say very very few, and those somewhat ridiculed as just a few naysayers. Some beyond their best before date! There is no joy to say we told you so. The We was just too few.
      Winston

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    9. WA @ 16:12:

      It wouldn't have matter worth a damn - the public was sold on the energy warehouse concept.

      I am not sure you were around some of the Fortis AGMs at the time, but SM did say publicly Fortis wasn't interest in MF for exactly the reason it was doomed to fail - government led. also, Bill Callahan ( a former PC minister familar to UG, RP, DV and the Digger) alos had some words in 2010.

      Many now want to say - 'Well, why didn't you tell us?', I look at the dissension and the only thing i can say is 'Why the hell didn't you listen???'

      BFAs recent extolling of Paul Lane (incidentally he was involved in the MF hit squad, manipulating VOCM polls and a great supporter of Bill 29) proves this exactly....


      There was no failure of public duty - just a failure of the public to listen.... For you to say few did, maybe you need a better review of the FACTS - many did, including the PUB(which many say is the governments baby) which said it couldnt say MF was good or bad.

      PENG2

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    10. You might read the piece "Facts are under siege;we need to invest in journalism"
      You list 5 people who went public, and even if a dozen engineers and economists went public, without good media to do their job, how could the public listen?
      Of all the lies noted in comments below, how many of the lies were exposed by the media, how many promoted as fact? Even now deception continues.
      Hard to know PENG2 which side of facts you are on, when you defer to Leblanc and can't comment on the lie about our wind resource,and other technical issues.
      To me, your best contribution to truth was admit the risk of instability of the North Spur. But as an anonymous with expertise, you had No letter to the Telegram or the PUB or the Inquiry from you on even that. UG is unknown by most. Pity.
      Winston

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    11. WA @ 22:47:

      First off, you have no idea what my submissions to the PUB, Inquiry or any othe rbody has been over the eyars on MF.

      Now, when I look over the list of persons who made public presentations to the PUB during the MF hearings, I see several MUN profs and several engineers. Also, my memory tells me I went over the Inquiry CARE program on more that 1 occasion with Maurice.
      http://www.pub.nf.ca/applications/MuskratFalls2011/comments.htm

      Simply put, the PUB hearings and the Inquiry (and how the average joe could contribute to both) were both WELL KNOWN to everybody in the province - but both generated little interest by the average joe and this is why I say with almost 100% certainty that it didn't matter who said what before sanction, 80% of the public wanted (and got) MF but now many have changed their minds.

      As to wind, my memory also tells me that I brought up Hawaii as being a comparable type grid to NL - and they use more wind currently and have plans to implement additional wind. So no, I haven't ignored the technical - but it is very far outside my practice areas and I wont go there very often.

      PENG2

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    12. Re: 80% of the public wanted (and got) MF


      This is like saying that 80% of women who get date raped originally wanted the date and looked forward to it, but later changed their minds later. It is just a way to blame the victim.

      Muskrat Falls was "manufactured consent" based on numerous criminal lies. The public unknowingly, consented to lies.

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    13. PENG2: 1. I wondered if you had submitted to the PUB, Inquiry etc, but recall nothing on your area of expertise, and if anything , likely anonymous, so much reduced benefit, and even now you don't acknowledge submissions, or how many, or too which body
      2. You repeat the few profs etc, as if many, and I say are very few, so we never agreed on what is a lot or little dissent on MFs
      3. You went over the Inquiry CARE ? is this terms of reference etc?
      With Maurice on UG? Often I refer to friends about MFs and UG blog, and most do not know of UG. UG is a small but important substitute for a failed media, would you agree?
      4. The dissent on MFs, on technical issues, there was virtually no analysis or investigation by the media, do you agree? So how could the AJs learn of technical risks?
      5. You have a good point of the little interest at hearings by the public. After one of my presentations at the PUB, with men in suits present, parties and lawyers, on a session on CDM, I notice 3 females in the back row. I inquired "Are any of you with the media"? I suspected CBC, The Telegram, NTV or VOCM, taking notes for some report. Not one from the media , All were PR people for Nalcor, Nfld Power, Nfld Hydro.......all whose job it is to keep quiet the CDM failures. The media, who should be informing the public, entirely absent. Yet you blame entirely the public. Sure some, many of the public should be there......but who informs if not the media, and they do not. The media is a tool of the elites, who you seem to deny exist.
      6. Wind: yes you brought it up, on Hawaii, on UG. Does Leblanc use UG as admissible evidence? No Inquiry dive on wind.
      7. Won't go far outside your area of practice? You comment and are 3 times or more informed on politics that I am.....you go there often.....is this an area of practice? You defend Fortis and Stan to the hilt. Is this your area of practice? I comment outside my area of practice and invite corrections form others if I make errors. You are technically skilled and can comment or dig deeper, as to wind, solar, CDM, seismic risk, GHGs, climate emergency or not, with opinion and often with informed opinions. Why not PENG2?
      I say you largely ignore technical issues, and on this blog it is much needed. Even certified experts on Leblanc list made errors at times, I think you realize?

      Stay engages and shoot back.
      Winston

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    14. Winston

      I think many of us on this blog have read the "musings" of PENG2 for years.

      There is only one thing that is definite to date?

      He is full of hot air!

      How much?

      I'm guessing we could probably cut back on our costs at Holyrood if we could convert the hot air into BTUS.

      Priceless!

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    15. WA @ 10:28:

      The CARE program was a 4 months window that even warranted a Press Release by the Inquiry offering to accept anonymous comment/concerns etc from those previously involved with MF. The comments went directly to Grant Thorton, and were isolated form Nalcor/Government to prevent possible retribution. Much similar to the PUB hearings – there was a way to anonymously contribute, IF someone so inclined. But as you noted – since no one even bothered to show at the PUB hearings, it was unlikely many took the time to contribute either publicly or anonymously. And what I have always said, is that there wasn’t a need for people to be educated on the technical details of the issue(s), just to realize that there was disagreement on the viability – and the PUBLIC wholly denied this in 2012, and 30-40% deny it to this day. Like the PUB hearings, the Inquiry was well publicized and accessible to anyone; thus judging by the lack of intervention by the public there are only 2 logical conclusions - either people still support MF (ie as the most recent polls showing 30-40% support remaining today), or the PUBLIC just doesn’t give a damn. Either way from my perspective- it still, comes down to being willingly ignorant. The public needn’t understand the technical aspects – just to acknowledge there was a differences in opinion, and to date the public is still disputing there was any dissent.


      Really, I wouldn’t take the media as being an avenue anyone should be educated from – I prefer to go to source, read documents myself and make up my own mind but I do take some cues from the media. I do however, keep abreast of media to see what the public is doing – and I intently follow politics/government and other such issues as is part of my technical background (ie management and ethics and politics) from my business and some social sciences work.

      You seem to not have read the rules of evidence at Inquires – there is no need for LeBlanc to limit himself on what has been presented at the Inquiry when he considers his opinion and finalizes his report. This is a big difference in trial and Inquires – I know must be like an echo by now, but Gomery (but you could also check Lamer, Riddel or Nelles for good explanations) is a good reference. Way back before the Inquiry started, I refused to pass judgment on LeBLanc (or his handling of it) – I said something to the effect that ‘LeBlanc has all the leeway he needs to be comprehensive, but if he is politically motivated no changes to the ToR will help’, and I stand by that comment.

      When considering my perceive support of SM – we disagree fundamentally on what the Fortis vs NL Hydro vs Government roles are in CDM, efficiency and grid management. My stance is they have no place – even though Marshall did explain using good foresight why Fortis wouldn’t get involved in MF in 2011 (at least acknowledge he did publicly explain this at the AGM, and this was reported in the media province wide). And to be factual, when Marshall was brought on I said he was an upgrade over EM – not sure I passed anymore judgment on him than that (except when people have put extra meaning into my words).




      PENG2

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  6. To paraphrase Gobbels (or whoever it was):

    “If you tell a lie big enough, like Muskrat Falls is the low cost option and we need the power, and keep repeating it via press releases and by leveraging tools like Wade Locke et al, people will eventually come to believe it. The lie can be maintained only for such time as the Province can shield the people from the economic consequences of the lie.

    This it thus becomes vitally important for the Province to use all of its powers to repress dissent and charge protestors, make sure the CBC articles don't allow comments which might contain truth, ensure that press releases are published as news by lazy journalists, sue Brad Cabana etc., for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the Three Headed string puppet known as NDPCLIB .”

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    1. The BIG LIE, which was repeated over and over was that "We Need Muskrat Falls". The big lie was a package, or container for multiple smaller, supporting lies.

      - Lie: Demand is going up in a linear fashion ( - we need the power)
      - Lie: Holyrood must be decommissioned soon ( - not salvageable, therefore we need more power)
      - Lie: Muskrat Falls will cost 6 billion dollars ( - the low cost option)
      - Lie: All alternatives have been considered ( - the low cost option)
      - Lie: It is worth $12B or whatever it costs
      - Lie: It is a long term asset
      - Lie: The system is reliable
      - Lie: There is a good market for exported power
      - Lie: That offshore gas piped in from offshore was not economical, even if the construction cost to deliver offshore gas to the Holyrood Thermal generation site parking was free.
      - Lie: Nalcor has world class experts (if they do, they obviously weren't in charge of the project)

      I call these lies because, unless the Nalcor executive, or heads of University departments like Wade Lock and all the MHAs have major cognitive disabilities, they must have known that some or all of these things could not possibly be true.



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    2. The Big Lie. Justice LeBlanc should use this as the report title.

      If not, the next Inquiry into Muskrat and the resulting destitution
      Of the province can use it.

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    3. Great comment on the Big Lie, to tell it as it is.There are more
      Lie: Nfld wind is no good for our grid.
      Lie: CDM is of no value. Efficient improvements were approaching the saturation point.
      Lie: Grid tie to the mainland is only beneficial, and no negatives.
      Lie: More island hydro is uneconomic and insufficient.
      Lie: Heat pumps all shut down in our cold weather.
      And likely more.
      Yes, how can Leblanc not call a spade a spade.
      Lie; MHAs are automatically honourable,
      Lie: Public servants always serve the public good.
      Winston

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  7. This comment has been removed by a blog administrator.

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    1. Same guy that describes Byrne, I think, name must be Tony.

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    2. Relax Anon 21:45
      Blather and smoke, no sturm und drang here
      the way it's been and the way it will stay until bailiffs and bail bondsmen show up for their money
      the same crowd that you Nalcor, MF, and now this are the same crowd y'all voted for
      they are you, and you is us
      just hope my pension lasts here in NS, before you damn fools lose it all

      one thing I know for sure is that my pension is safe from any revolution, cause the NL population has and infinite ability to be sucked dry

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  8. Applied Science in more climate friendly ways to heat and cool buildings;

    https://www.cbc.ca/news/technology/district-energy-examples-1.5379125

    When will NL get on board?

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    1. When will NL get on board? Probably never.

      To do something like that, you need engineered subdivisions and the buildings need to be interconnected with water heating/cooling loops. You also have to figure out who owns the infrastructure -- e.g. condo fees for the shared parts. Galway was an opportunity to do something sustainable but clearly the developers are not interested. These new homes could have been oriented south in a grid rather than crescents, had few north facing windows, had roofing suitable for solar collectors and been designed to be energy efficient.

      We could have done district steam heating by burning wood/cardboard at Robin hood Bay Dump as well as producing electricity. Industrial buildings nearby could have been supplied with steam -- like Manhattan NYC.

      It is possible to store heat in summer for use in winter by using a 10,000 gallon water tank, but it is far less complicated to build new homes as solar passiv so that warming them up to comfortable levels can be done inexpensively (say $60/month). The lots should have their own septic and well.

      I think we are best going in a different direction -- individual homesteads that are mostly self sufficient.This is the opposite of shared services. We have upcoming problems with massively expensive unfunded mandates (large sewage plants), aging water supplies with many underground leaks, and municipal empires relentlessly increasing taxes and fees. I think these ideas would have made sense to previous generations, but fear that youth, who own nothing and rent everything, move from gig to gig, would see no value in the idea of a stationary family homestead that was owned without mortgage and inheritable.

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    2. We must all now realize that, because NL has failed to accept the renewable energy alternative, (since early 1980s), we have bought in to the petroleum forever way of doing business, boom bust, at the mercy of oil price speculation. This mindset, which still prevails, produced the Muskrat, and other such boondoggles. Prepare for this philosophy to have dire impact on our own children.

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    3. Forget about future boom, it's going to be bust all the way now on oil and other resources. NL bought in late as the opportunities peaked out. We're like the last straggling lemming to jump off the cliff. As we freefall, expect our lying politicians to describe it as flying.

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    4. News bite for Tom Osborne; There is a Revenue dip in the near future. Watch that the oil babies don't cut back production sometime soon.
      https://oilprice.com/Energy/Crude-Oil/Oil-Could-Fall-To-40-If-OPEC-Fails-To-Deepen-Cuts.html?utm_source=browser&utm_medium=push_notification&utm_campaign=vwo_notification_1575409473&_p_c=1

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    5. Even wonder why the Digger and Andy Wells and other question the global warming science?
      Google the site: Skeptical Science: Arguments from global warming skeptics.
      There is 197 myths listed that they use, and is false, and you can see the true science. When Greta says heed the science, it means to dismiss the myths.
      Winston Adams

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    6. Winston, I had a look at the site an it is poor quality propaganda or just ill informed. I encourage everyone to read "Human Caused Global Warming" by Tim Ball. Read the amazon.com verified purchase reviews. I purchased read the book. It is depressing because it exposes corruption and lies at a massive scale. My wife read it too and felt that perhaps she'd rather not know - just like sickening feeling after watching a good 911 documentary that leaves no doubt that the three buildings were well planned controlled demolitions. Human caused global warming emergency is a scam. I am all for moving towards sustainability, but the obsession with reducing CO2 is insane.

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    7. Anon, you are ashamed to put use your name, and you should be. You say you HAD A LOOK at the site. I skimmed the site and see it's great value, but just read a little more and it links a summary of the science for each issue. Perhaps you should read instead of just look.
      Take one: are glaciers shrinking or growing. Recently, Honorable A Brian Peckford, aka Young Alfie ,aka The Digger posted of 3 glaciers that are growing. WOW! 3 out of some 600 I found existed.
      This site says 90% are in decline and rapid decline in recent years.
      Tim Ball, is he a relative of Dwight Ball? Dwight who promotes our ethical oil via mini barrels size about 1 gallon in a barrel instead of 42 US gallons? So we get super low emissions when burned, a discovery greater than Einstein with E= MC squared.
      Dwight is truth challenged,and so made it too be Premier. He is a fan of Trump, who is adverse to truth telling.
      Anon, even the big oil companies did detail accurate research into the effects of CO2 and global heating, half a century ago. This like the devil admitting he is evil, yet you say the devil is good. Better you stay anonymous, as you have no credibility.
      Winston Adams

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  9. This province desperately needs a LELA EVANS as premier.

    LELA EVANS FOR PREMIER!

    And get Alison Coffin in as leader of the official Opposition... those two are the only ones fit to lead this wretched province.

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    1. Ms. Lela Evans speech in yesterday's sitting if the House of Assembly should be mandatory viewing by all MHAS, every day before they start their daily duties.

      It was powerful and from the heart.

      A trait that is not widely held by many of our MHAS!

      Kudos to Ms. Evans!

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