Monday, 21 May 2012

Telegram Article: A BIG MAChiavellian Diatribe

Talk about contrasts. The Editor of the Saturday, May 19th edition of the Telegram must have had that thought when he situated two opinion pieces on opposing pages containing very opposite views; one, an article by Brendan Sullivan, a former provincial government economist, called, “Muskrat Falls: how much are you prepared to pay?” and the other by Cathy Bennett, entitled, “Making the right decision, a former Nalcor board member speaks out”. 

Sullivan’s item deals with the singular issue of the high cost of Muskrat Falls power (27.7 – 40.5 cents per KWh compared with 10.4 cents per KWh, right now), and suggests Nalcor needs to look at an on-island solution. Bennett’s purpose is to defend Nalcor’s staff.     
Ms. Bennett writes, “I believe the work Nalcor has completed has an attention to detail and a discipline to best practice management that has positioned Nalcor as a world class corporation”. 

Ms. Bennett feels it is necessary to defend the professionalism of Nalcor staff.  Why?  Could it be because someone has exaggerated their expertise?  The fact is, no one has ever questioned Nalcor’s passion, professionalism or commitment, to their work or to their province.  But, some have correctly pointed out that Nalcor’s former incarnation, Newfoundland Hydro, has not built a major project since Cat Arm was constructed in the 1980s, which, by the way, went way over the original estimates. That’s thirty years ago!
Surely Cathy Bennett has not been influenced by the inaccurate belief, voiced by no less a personage than  Premier Dunderdale on VOCM's open line show, that it was the experts at Nalcor who built the Churchill Falls project, rather than Brinco?  Such a claim is, of course, a preposterous case of 'gilding the lily'.

Is it not a legitimate question to enquire how Nalcor is suddenly replete with the expertise for a project of the size and complexity of Muskrat Falls?

The engineers inside Nalcor are likely not given to the same pretense as their Board of Directors or the politicians.  It is the latter to whom the real attention of the critics is directed. Ms. Bennett seems to suggest Nalcor is making the decision.  That is not correct. Even if the provincial government has deferred to Nalcor the obligation of the ‘elected’, it is still the government that is charged with the decision to proceed.

Indeed, an overly emotional defense of Nalcor is not what I would have expected from a Nalcor Director or former Director.  It is to these people that we look for cool analysis, insight and perspective, an affirmation that they, at least, if not the politicians, are critical minders of the public interest.  None of these characteristics were evident in this article.
I was looking for Ms. Bennett to comment on power options, assessment of risk, cost issues including potential overruns.  I would like to have heard her argument for why the hoped for new industry, to which she refers, would pay more for Muskrat Falls power, when it could get cheaper energy elsewhere.  She could have clarified why this $5 billion project should be constructed in spite of the fact that such new industries have been neither confirmed nor even announced.    

As a past Nalcor Board member, Ms. Bennett would know that, regardless of how well Nalcor staff have prepared the Board, people like her must assess whether a particular recommendation should actually leave the Boardroom,  in the first place.  When it does appear on the Minister’s desk, in the end, the professionalism of Nalcor’ staff cannot be blamed for a misguided decision on the Board’s part, nor should they be chastised, by anyone, for the bad decisions of politicians who have failed to assess the ‘business risk’ to the taxpayers of the province.  The role of business risk, I submit, is solely the responsibility of the politicians.
The critics’ views are grounded in the belief that there are better options than Muskrat Falls; options which will not expose us to the rates Sullivan talks about in his article, nor to the serious business risk associated with a $5 billion dollar investment and cost overruns. 

Ms. Bennett goes on to say:  “…we will be positioned to access multiple markets for our surplus energy”.  She does not address how that is even possible in light of Hydro Quebec’s recent  energy sale to the State of Vermont for 5.8 cents per KWh, a sum, as Sullivan points out, is less than the cost of generation alone, forgetting the cost of transmission.  
Ms. Bennett says she supports Nalcor’s Energy Plan, that “ recognizes the end of our non-renewable resources and planned for that inevitability by replacing the revenue…from our renewable resources”.    In fact, the opposite is true. The critics, including this one, have performed their own analysis and believe that Muskrat Falls, rather than a source of revenue, will actually be a financial millstone around the necks of the people of the province; increasingly so, as the oil depletes and demand for power diminishes.    

This article is nothing more than a clever piece of spin doctoring.
How can Cathy Bennett turn a blind eye to Minister Kennedy’s assertion that the monthly bill of rate payers will increase by only $15 a month when the rates are set deliberately low to avoid rate shock and when the whole regulatory regime is turned on its head to accomplish that purpose?

Is this what Ms. Bennett wishes to tell the public: don't ask about SNC Lavalin and about their management fees; don't look at the fine print; don't worry about the fact that rates will be set by a power purchase agreement on a take or pay basis; don’t worry about the fact that the PUB will be impotent because Nalcor will be unregulated; don't worry about the fact that the cost estimates are based on minimal design work. Just trust in the world class professionalism of Nalcor and in their inherent integrity.  I suggest we have a right, as citizens, to expect more analysis and less ‘spin’.
Spin doctoring is a Machiavellian endeavour which may well serve to ingratiate Ms. Bennett with the current Nalcor Board and the Minister.  But I have to say, this piece is a BIG MAChiavellian diatribe, if ever I have heard one.