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Monday 29 July 2013


Those who noticed the decisions, out of Nova Scotia's UARB and Hydro Quebec, should not be content with being surprised.  Afterall, by anyone’s standards, surprises on a major scale, that appear after $7.4 billion has been committed, constitute recklessness.  The public should deal with this reality; it needs to tell the Premier to stop. 

The UARB has stated, in uncommonly plain language, that the Maritime Link is not, now, the lowest cost option for Nova Scotia.  It says that 15 cents per KWh for the Nova Scotia Block is too high and demands that all of the ‘surplus’ energy from Muskrat Falls be made available.  Altogether, the two blocks constitutes 60% of the power from Muskrat Falls. It says, only by levelling the price, with cheap (5-9 cents KWh) “market-priced” power, can it achieve the desired blended rate of 10 cents, allowing the ML, over time, to become the lowest cost option. 

Exhibiting Quebec style opportunism, NS could care less that Newfoundland rate-payers will pay in excess of 20 cents per KWH.  They are not concerned that Newfoundlanders and Labradorians will assume all of the construction risk, including 80% of cost overruns on the Maritime Link (ML). But, NS sees an opportunity to benefit and who can blame them.  They are doing what ‘states’ do: they act in their self-interest. If Premier Dunderdale had consulted Brian Peckford on Nova Scotia’s antics, during the Atlantic Accord saga, she and her Ministers might not have so quickly earned the mantle, ‘babes in the wood’.

The Premier has indicated that the Government will not commit power that is needed in Labrador.  Still, access, says the UARB is essential. It want’s Nalcor legally bound; it says the access must be “codified”.  This is a fundamental conflict which compounds the myriad reasons to not trust the Government. In remarks, on Friday, at the Premier's Conference, reported by the Herald News of Nova Scotia, Dunderdale indicated she sees 'enough flexibility' in the UARB decision to allow Nalcor and Emera to strike a deal the NS regulator will approve. What new rationale will be proffered to satisfy the UARB and keep this Project moving? What will be given away, this time? Does anyone not think it is within the capacity of this Premier to construct her own version of an Upper Churchill Contract?

We are supposed to be savvy; a people intelligent enough not to engage in excessive risk. Smart business people always retain the ability to say “NO” when other parties, to a deal, want more than is reasonable or economic.  The Dunderdale Government cannot seem to get its head around this essential fact.  At Nalcor’s urging, it keeps looking for ways to let Nova Scotia and Quebec screw us. The ‘bigger fool’ theory retains its currency in their midst.

From the very beginning of the Muskrat Falls saga, one of its worrisome aspects was that the Premier possessed little understanding of either its complexity or the risks involved. Her most senior Cabinet Ministers did not, either.  The public has been repeatedly assured that the ‘experts’ at Nalcor, have everything figured out; we now know they have not. 

Ed Martin’s second-in-command, Gilbert Bennett, aggressively took on critics, last year, who warned Nalcor to seek certainty, because Hydro Quebec was sure to try and defeat the Water Management Agreement. The effect of such naivety is that HQ has been allowed to frame the issue, in its own Court.   They were warned, too, for a host of reasons, that no money should be spent without first obtaining the Decision of the UARB.     

A prudent Government would never have proceeded with Muskrat without the greatest possible certainty, because of the amount of money at stake. The fear is that it will spend the last dollar before admitting that error.

An endangered public purse needs protection.  The Muskrat Falls Project must be stopped until we have clarified what we have gotten ourselves into.

This decision cannot be delayed one more day.

Former Premier, Brian Peckford released an “Open Letter” to the Premier advising the Government to make sure it is in control of the Project, expressing obvious doubts that it was. The 2041 Group has suggested the construction project should be shut down until critical issues are clarified.

Why aren’t the public making a similar demand?  Likely, it is because people have a basic expectation that the Government has their ‘back’. They cannot imagine that it would do anything to cause our economy and society irreparable harm on the scale of Muskrat Falls.

Yet, after last week, they are faced with clear and unmistakable evidence that they are being taken down a very reckless road; that in giving Sanction, the Dunderdale Government was merely submitting to Nalcor’s timetable.  Now, the essential facets of the Project are murkier than ever.

The public needs to tune in to the problem.  The media needs to stop tuning out.

There is no nice way to say this: the Government is incompetent. It is being advised and driven by equally incompetent senior officials at Nalcor Energy.

No one ought to make such a charge flippantly or take pleasure in the assessment. Unfortunately, the evidence is overwhelming; it can be sustained against any charge of bias or of partisanship.

We are being governed by fools.

Even if the Premier believes that the Government is already in too deep, hubris, or simply an inability to follow through a bad decision with a good one, will cause her not to act. The other fear is that she is frightened of the political consequences; that she will proceed because she ‘may as well be shot for a sheep, as a lamb’.

What if neither the public nor the media become engaged?

They can just wait until the money runs out.