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Monday 30 September 2013


Actually that title is a slight exaggeration, but one no worse than the pumped up propaganda Cathy Bennett attempted as she got hoist on her petard, by VOCM Backtalk Host Paddy Daly.  She must have been trying to be Kathy Dunderdale, again. 

 The two are ‘cheek to jowl’, on Muskrat; the only difference is that Bennett believes she can explain the Project better. 

My Blog Post, How The Premier Damages Her Own Credibility (Part II) deals with Dunderdale’s wish to supply New England electric power for a fraction of its development cost. 

When no less a personage, than the Premier, advocates that we develop Labrador’s Gull Island, which is larger than Muskrat and reportedly cheaper per KWh, but still well in excess of 20 cents per KWh, and that we should sell it to the Governors for net 3.5 to 4 cents per KWh, you just know we have a problem.  When Bennett uses her soapbox to sell the same message, you know ‘Alice’ must have left the two behind, in Wonderland.
Therefore, I think my last Blog Post does offer a glimpse into the thinking of Kathy Bennett.  It helps prepare you for her interview with Paddy Daly.  Ordinarily, you would dismiss anyone, including Bennett, attempting to engage in silliness. The problem is, this Cathy wants to be Premier, too; monied interests are backing her.

Though Bennett is fond of touting “the Business Case” for Muskrat, it is less than clear that she even understands it.  This is a person formerly a Director of Nalcor and one who voted for the Project. 

If you like Open Line Shows, you know Paddy Daly does a fine job. Though he is not a reporter, he seems to have tired of spokespersons explaining something, as complicated as Muskrat Falls, using incessant and often superfluous generalities.  That Dunderdale, Ed Martin, Bennett and others have gone unchallenged, on details, has been a huge problem from day one; it constitutes, in my view, the greatest failure of reporters, to the citizens of this Province.

But, Paddy Daly was ready for Bennett, who might have expected an easier ride.

VOCM BACKTALK with Cathy Bennett

She opened by saying we needed to change the conversation about Muskrat and move on.  Paddy stopped her and asked about all the hurdles Muskrat is facing, including demands for more cheap power from Nova Scotia’s UARB and various legal challenges, including from Quebec.  Bennett suggested using the word “’hurdles’ gives people a false sense of what’s going on” and proceeded to charge that interest groups, opposed to the Project, were “scaremongering”. Daly’s scepticism was obvious.

Bennett moved on, in the interview. She noted the well-worn Nalcor/Dunderdale line that Muskrat Falls is $1.7 billion cheaper than replacing Holyrood.  She forgot that script was prepared before the DG-3 numbers were released; projects costs have since risen. 

Bennett forgot, too, that Muskrat Falls is not cheaper than replacing Holyrood, alone.  Nalcor’s numbers are predicated on expected 50% growth in NL electricity demand.  If that does not materialize, the entire complex business case fails, for Muskrat.

If the 40% of the power that is surplus, is contracted to Nova Scotia under a long term agreement, (and Cathy made it clear more power sales to that Province were a “good thing”) we have big problem. 
As "JM" who has make several contributions to this Blog and to the PUB, on Muskrat, states: “Holyrood will have to stay open to ensure NL’s forecast growth needs are met.  Upper Churchill or Gull Island cannot provide any additional power, without upgrades to the Labrador Island Link.”  

The alternative possibility is that the Nalcor’s growth forecasts are inaccurate, and the power is not needed in NL.  This, too, defeats Muskrat’s business case, as the lowest cost option.

‘Lowest Cost Option’ is a highly dependent catch phrase, invented by the PR folks at Nalcor.  If you use it without understanding all the factors it is supposed to imply, you might get your comeuppance. 

Equally, the $1.7 billion savings that Bennett cites is a “nonsense” number.  That is as nice as I can be.

Paddy challenged Cathy who suggested ‘we had to replace Holyrood regardless of whether we get the Federal Loan guarantee or sell to Emera’.  Daly said ‘if we build the damn and it is cheaper by $1.7 billion you are still saying we have power we can sell to Emera….but we can’t, if the Maritime Link is in jeopardy’.  Paddy told her she couldn’t have it both ways.  

Cathy then noted that the Maritime Link (ML) would provide for an additional 330 MW of power to be sold for export. 

Daly reminded her that if all the surplus power went to NS, with only a 500 MW capacity ML, the Link would be at capacity, that there would be no room for more power, from any source. 
Bennett had another go at the math to defend her position.  Paddy chimed in, again, when her double counting was obviously not working and told her bluntly: “Cathy that is patently not true”! "Yes, but",  Bennett countered: “the agreement with Emera will be over in 35 years, right” (forgetting that Nalcor’s says we need that power earlier) which Paddy ignored but informed her, in reference to the 35 years, that that term was “also the life expectancy of that cable…”). 

Suddenly, Bennett realized her argument didn’t stand up to scrutiny; she stuttered and stammered and said, “well, what are we going to do to replace Holyrood?” to which Paddy replied “are you asking me?”  as she sought the safety of a more secure argument.

She seemed totally unaware of the many options for Holyrood, less risky one too, than a $7.4 billion boondoggle of Muskrat.  But, that wasn’t all.

Bennett proceeded to blame the generator problems at Holyrood, this past winter, on aging equipment. How could she even know that?  A Final Report, on the cause, is schedule to be filed with the PUB only today, September 30th.  

Then she moved on to say Muskrat should not harm seniors and those on fixed incomes.   

Paddy Daly must have had himself tied to his chair at this point.

Nalcor demands that we pay 100% of project costs for Muskrat in return for only 40% of the power.  The Agency also seeks a 8.4% IRR (Internal Rate of Return) plus any revenue associated with the 40% it intends to export. This would bring the rate-of-return into the 12% range or higher.  As "JM" nots, “Muskrat Falls exemplifies the most regressive form of taxation.  It targets everyone with an electrical meter, including those under-privileged and those on fixed incomes.” 

The analyst is right, of course, but, like the Premier, Bennett thinks she is talking to ignorant people. She expects that no one will challenge her rhetoric.  Paddy Daly did. And good on him!  

Now, I suggest Paddy needs to start calling Premier Dunderdale, the Minister of Natural Resources and Ed Martin back to the studio. 

Paddy Daly may not have halted Cathy Bennett's Campaign, but more such challenges will confirm her limited knowledge of the Muskrat Falls Project.  The 'business case' Bennett touts is her own business acumen.  But public life and the job of Premier demand a higher standard.  Kathy Dunderdale is seeing that now, too. 

It may be best that the Liberal Party simply advise Cathy Bennett her services are not required.
At least, they will keep her liability a limited one.