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Monday 10 February 2014


The buzz at last week’s Pre-Conference Hearing was the sudden change of attitude exhibited by the Fortis Inc. subsidiary, Newfoundland Power (NP). 

The Company filed an Intervener Submission to the PUB which is investigating Black-Out 2014.   Its fifth question was loaded.  It was brief; but it was a bomb-shell.  It asked: 

                 5. What measures are required to ensure reliability and security of power supply to
         customers on the Island Interconnected System, including Newfoundland Power
                     and its customers, after the Labrador in-feed and Maritime link become
                     operational? (Emphasis added)

 What had Newfoundland Power implied?  It lacked faith in Nalcor’s power generation strategy. It doubted its ability “to ensure reliability and security of power…” after Muskrat Falls is completed.

The Company had broken ranks with Nalcor.  It was a watershed moment. What may have been imperceptible to many represented a seismic shift in the Newfoundland centered universe, at least as far as Muskrat Falls is concerned.  

Ian Kelly, Newfoundland Power’s Legal Counsel, summed up the Company’s position this way:

“We want to make it clear Newfoundland Power is not questioning the decisions to develop Muskrat Falls or to build the Maritime Link ... those decisions have been made.

“What the board should examine is how reliability and security of supply will be assured after the commissioning of Muskrat Falls and after the decommissioning of Holyrood.”

Am I reading Ian Kelly’s words accurately?  What did he say, again?  ”…those decisions have been made”.  In other words, we at Newfoundland Power did not necessarily agree with them but you, Nalcor, have sealed your own fate; those were your decisions!
It is well-known that Fortis Chairman and CEO Stan Marshall would not go near the Muskrat Falls Project ‘with a barge pole’. 

Fortis might have wanted to make its views public a long time ago; after all, most residents of the Island are Newfoundland Power customers. 

But, in a politically charged environment like Newfoundland and Labrador’s, such frankness even if uttered in the public interest would have earned the Company a corporate bloody nose from the more czarist of Government politicians, especially Danny Williams and Kathy Dunderdale. 

Fortis stayed mute; one of the few fully qualified groups, boasting intellectual, technical and financial heft, didn't as much as file a single word with the PUB on the Muskrat Falls Application.  It was an enormous display of cowardice.

The power ‘black outs’ of early January shook the political and commercial foundations of the Province.  There was no good way to ‘spin’ it, though for a short time the Premier and at least one VOCM Open Line Host tried to claim all would be fine when Muskrat comes on stream.  How could a group incapable of getting its summer maintenance program completed by mid-winter retain a shred of credibility for a Project enshrouded in secrecy?  

The ‘black outs’ constituted a political and commercial debacle; they shredded the tattered remains of the Dunderdale Premiership and ruined a long record of confidence in the security and reliability of our power system.

I drove across the City late on the night of the explosion in Hydro’s Holyrood switching yard.  A friend had asked me to help him retrieve some Jerry cans. Fuel was in short supply for his generator.

I stopped, just for a moment or two, above the Avalon Mall, on Thorburn Road.  I was able to see much of St. John’s and Mount Pearl in virtual darkness.  The sense of isolation, of desperation, of the entire Metro Region was palpable. 

A chill ran down my spine as I pondered the possibility that the outages might go on for many more weeks.  How would people manage? What would such a massive disruption do to our economy?  The questions were imprinted on the dark sky, on the blackened street lights, and in the clouds of cold snow that blew like white dust over the windshield. 

The Open Line Shows ran back-to-back; most callers used the corporate names, Nalcor and Newfoundland Power, interchangeably.  People made no effort to differentiate which corporate entity was responsible for the mess.  They were frightened.  They had a right to be.

But, I suspect, few were as frightened as the senior people at Fortis and Newfoundland Power. 
Yes, they were only the ‘distributer’; the company responsible for making sure that the ‘juice’ delivered to them by Nalcor arrived at homes and businesses safely and without interruption.  How could they be held responsible, if Nalcor failed to manage the generation system? Who could argue with such a proposition?

But, would those arguments withstand scrutiny if the Labrador Island Link (LIL) collapsed following a winter’s sleet storm in 2018, a mere four years from now?  What about the myriad other reasons Muskrat could come up short? 

Would Fortis be so easily let off the hook having failed to break its silence?  Was it not a knowledgeable witness to the conception, design and construction of Muskrat Falls? Where would it find an ounce of credibility having deferred to people like Williams and Dunderdale, to secrecy and deception?  

In this light, one begins to see why Fortis had no choice but break ranks with Nalcor.  

No Corporation is insulated from its community of interest; even in the real world of business, corporate responsibility is not just about legal definitions or mere philosophical notions of accountability.  Sometimes the public interest simply cannot be disentangled from corporate self-interest. This was one of those moments. 

Little wonder Fortis executives had second thoughts.

 Continued silence would have constituted a relationship bordering on complicity. 

Fortis had to disassociate itself from Nalcor.  Its subsidiary, Newfoundland Power, could not survive another calamity like Black-Out 2014 (or worse).  The Company had to find a way to off-load its burden.  The PUB offered the perfect opportunity.  If the Agency failed to take the cue, Fortis could always take credit for trying.

That proposition may be moot, but one thing is certain, the option of Fortis’ continued silence evaporated in those cold, dark nights of early January.

In contrast, Nalcor (the Crown Corporation ostensibly owned by the people of the Province) and its subsidiary, Newfoundland Hydro, do not see it that way.  Even against the back drop of power outages in which seniors were herded into ‘warming’ centers, where residents with no secondary heat source suffered personal discomfort, damage to water pipes and property, against business closures and industrial shutdowns like Corner Brook Paper and the Come By Chance Refinery, against all the expense and suffering, what did Nalcor say to the PUB?

It demanded secrecy again, just as it has always counted on the former Premier and the current one to guarantee. 

Lawyer, David MacDougall spoke to the PUB on behalf of Nalcor’s Newfoundland and Labrador Hydro:

“With respect to the fifth (issue) proposed by Newfoundland Power, regarding the potential review of measures to ensure reliability after commissioning of Muskrat Falls and the Labrador-Island Link, we believe that matter is beyond the appropriate scope of this review”. (Emphasis added).

Meanwhile, Premier Tom Marshall, having promised that his Administration will be different, maintained his silence.  The re-set button is as corroded as it ever was.

A lax media forgets to ask the new ‘Marshall’ if he still supports Nalcor’s style of governance; they fail to ask if he will intervene, not with the PUB but with Ed Martin, to remind him that the damage done to democratic government must end.

The media might get around to that sometime.

Meanwhile, Fortis and Newfoundland Power have had an epiphany.

Even the Consumer Advocate gave his support to an enlarged investigation.

The PUB deliberates.

Is this progress? 

I don’t know.

But, there is more reason for hope.