I am writing to take issue with points raised by T.E. Bursey in his article to The
Telegram of July 15 (Muskrat Falls is the Right Project for N.L.). Mr. Bursey
seems to believe that Muskrat Falls will be the solution to the reliability
problems experienced during the past winter.
Nalcor has
posited that emergency power will be available from Nova Scotia in the event of
a disruption of Muskrat Falls power. We believe that a thermal plant at
Holyrood will continue to be needed and that emergency power from Nova Scotia
is unlikely to be available when we need it.
The PUB
inquiry, particularly phase II, will weigh the evidence on this point but we
question the premise that Muskrat power will be more reliable without continued
thermal backup on the Avalon.
Mr. Bursey
lists experts who provided "supportive reports and comments." Only
one of the listed reports was prepared by an independent group, namely the
joint federal provincial panel, which was anything but supportive.
In its final
report the panel was quite critical of the Muskrat Falls project. The panel
concluded that "Nalcor had not demonstrated the justification of the
Project as a whole in energy and economic terms… and that Nalcor’s analysis,
showing Muskrat Falls to be the best and least-cost way to meet domestic demand
requirements, was inadequate." (page13)
Mr. Bursey
says that "the cost estimate has now increased to $7 billion, which is
some 13 per cent over what was estimated before the detailed planning was
completed." The fact is that from 2010 to June of 2014 the cost has
increased by 40% (not 13%) and that does not include increased financing costs
of $1.330 billion.
Mr. Bursey
refers to wind as the alternative and downplays its viability for serving the
local market. He discounts natural gas as an option even though the evidence
indicates that Grand Banks natural gas can deliver power to Newfoundland
consumers at a significantly lower cost than Muskrat Falls, particularly if
combined with an LNG facility.
Other
options have been overlooked. What about the potential for energy conservation,
discouraging electric space heating and encouraging consumers to use heat
pumps, solar panels and windmills? What about the Unexplored Alternative (see
article by JM on Sir Robert Bond Papers website) of buying power from the Upper
Churchill and paying Hydro Quebec the same rate as they are earning in their
export markets?
Mr. Bursey
bases the case for Muskrat Falls on the flawed concept that this will somehow
improve our bargaining position with Quebec. He should understand that the
transmission line is sized around Muskrat Falls and much of its capacity of 500
MW will be used to export power to Nova Scotia.
The Maritime
Link does not offer an alternative route to sell Gull Island or Upper Churchill
power to the Mainland or to the United States. Building 824 MW of high cost
power capacity surely weakens the benefit of accessing low cost Upper Churchill
power in 2041.
Nalcor
admits that development of the Gull Island project will require access to the
high voltage transmission lines through Quebec. We do not need the Maritime
Link to demonstrate the technical feasibility of an electrical link with Nova
Scotia. Mr. Bursey is not alone in rationalizing this project on the basis of
the notion that it will somehow give us improved leverage in dealing with
Quebec. Indeed we believe that this misguided notion has been a driving force
behind this project from the outset.
The
amendments to the Electrical Power Control Act (Bill 61) which restrict open
access to Nalcor’s transmission lines are in conflict with our historical
position that Hydro Quebec should open its lines to carry Labrador power to
markets outside the province, without having to sell the power to Quebec as the
only buyer. We are telling Quebec: "do as we say, not as we do".
The business
case for this project has to be premised on strong and growing demand along
with electricity rates that are competitive with those in other jurisdictions.
Neither the demand nor the ability to offer consumers rates comparable to those
in adjacent provinces and states has been demonstrated.
Mr. Bursey
believes it is too late to stop the project. Is it "economic madness"
to stop a flawed project? Or is it madness to continue throwing good money
after bad. We should not be held hostage to our mistakes.
The large
expenditures incurred to date should not blind us to the more cost effective
options that have up to now been dismissed, such as energy efficiency and power
purchases from Quebec.
David A.
Vardy
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