tag:blogger.com,1999:blog-5235138415013046381.post849050263166421030..comments2023-10-25T07:29:40.789-02:30Comments on UNCLE GNARLEY: MUSKRAT FALLS AND VOODOO ECONOMICSDes Sullivanhttp://www.blogger.com/profile/02566013585647491614noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-5235138415013046381.post-26708979683007793212016-05-19T13:58:12.097-02:302016-05-19T13:58:12.097-02:30Sorry for your loss Des.
What was the COS kWh pric...Sorry for your loss Des.<br />What was the COS kWh price for Muskrat Falls power 30c kWh? 16.4c kWh was the oft quoted residential rate - Nalcor's argument: your power will ONLY go up by 50% with MF and continued use of Bunker C is $2.2 billion more expensive over the same time period (DG2). Nalcor assumed consumption would remain the same with escalating price yet even Wade Locke in his power point MF rehash said +20% price = -5% demand. <br />Prices might have gradually reached MFs initial 16.4c kWh with alternatives but it would have been gradual over many years, giving time for demand to be reflective of higher prices. Nalcor has taken out the free market for NLrs and built a facility 2.5X the domestic demand (only full paying customers). <br />In hindsight Harper's FLG played Danny Williams for a fool, but since all Federal parties blindly supported the FLG DW was going to lose anyways.<br />Muskrat Falls, Hebron, Gallway and Ice Caps - DW sure can pick winners AChttps://www.blogger.com/profile/06779383664665696092noreply@blogger.comtag:blogger.com,1999:blog-5235138415013046381.post-52287288931884394982016-05-19T13:13:40.995-02:302016-05-19T13:13:40.995-02:30Des,
Condolences to you and your family. Brendan s...Des,<br />Condolences to you and your family. Brendan sounds like a good man.<br />His early decrying of the regulatory dysfunction and voodoo economics, that even to my untrained economic eyes were shocking, speaks to his integrity and love of his province.<br /><br />This is the true pride of place that respects the people and culture.Bruno Marcocchiohttps://www.blogger.com/profile/08076165212559914463noreply@blogger.comtag:blogger.com,1999:blog-5235138415013046381.post-30585928580532096632016-05-19T12:49:31.377-02:302016-05-19T12:49:31.377-02:30Des... my deepest condolences on the lost of your ...Des... my deepest condolences on the lost of your brother. <br /><br />I remember this original post, as it was at the time I was really trying to understand the economics of the Muskrat Falls project. The term Voodoo Economics resonated with me then, as it does today. I will re-post my original comment from back in 2012. Unfortunately the 2 Billion equity contribution will now be closer to 5 Billion. The annual debt servicing fee to the province on this borrowed equity will be ~200 million a year. It really is voodoo economics. None of which was included in the lowest cost analysis used to justify the project.. JM<br /><br />-----------------<br />Not only the price. The PPA should have very clear terms on 1) When the power will be delivered (in daytime periods during the winter, or regular montly intervals) 2) The penalties if Nalcor can not deliver the power to NLH as required 3)The capacity which will be made available. <br /><br />I would also like to know if the CPW includes the interest payments the government will have to pay for the money borrowed to provide the equity contribution. I would expect the inclusion of the equity debt payments would show the isolated option to be the cheaper option. <br /><br />It must be remembered that a 2 billion equity contribution, if put on our debt, would result in a 100 million less debt servicing charge. <br /><br />This was not included in the CPW analysis between the options. <br /><br />This is the true voodoo economics.<br />Anonymousnoreply@blogger.com