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Monday, 5 January 2015


As the 1st anniversary of DARKNL approaches, we still suffer Ed Martin as Head of the Province's energy agency. We need to ask: why?

Last January the Liberty Consulting Group was hired by the Public Utilities Board to investigate the reason for several days of Island-wide power outages. An Interim Report, released in April 2014 contained a damming indictment of Nalcor's leadership. 

It describes wide ranging management, personnel, forecasting and operational issues.  Hydro had not even completed its 2013 summer maintenance program. Replacement parts had not been procured or even sourced. Poor forecasting methodologies led to an inadequacy of power generation.

Missing from the Liberty Report was blame on cold weather or excessive power demand.

Nalcor had not only mishandled the Province’s power assets; it had attempted to obscure the real reasons for the failure.

Liberty’s conclusions led The Telegram to state succinctly: the Report does not describe a group of “world-class” experts. It said “there’s nothing world-class about this situation”. 

On December 17th, 2014 Liberty issued the pre-Muskrat Falls Final Report (an investigation of the impact for the electrical system post-Muskrat is now underway).  The document affirms Liberty’s earlier conclusions and offers some additional observations. Chief among them:

·          Despite having installed a new 120MW generator and made provision with industrial customers to   
       come up with an additional 60MW, generation reserves will remain low.

·         Hydro has been using tools for short-term forecasting which have proven unreliable in extreme weather conditions; Hydro has made improvements but their effectiveness remains unproven. Liberty noted, in its Interim Report, Hydro’s use of weather forecasting for planning purposes was too optimistic as it had a 50% chance of being wrong in any one year.

·         Overall reliability performance (2009-2013) has been below comparable Canadian utilities.

·         Deficiencies in Hydro’s governance: Liberty noted, in particular, that Hydro needs a chief executive whose sole function is to manage the Utility. The Report also states that improvement could be enhanced with the appointment of a competent Board of Directors.

The public might expect that one charged with maintaining the Province’s electrical system and having executed the job so poorly would have written a short note of apology to the Premier and handed in his keys. The two actions might have been followed by a discrete but deliberate exit. 

That CEO Ed Martin did nothing of the kind, the Premier ought to have supplied the necessary push.

If the Public Utilities Board (PUB) had attempted to soften Liberty's condemnation of Nalcor’s management performance, one might be less inclined to assess termination of Martin's tenure as the appropriate penalty. But Liberty describes its reasons in great detail; the PUB, an independent and semi-judicial tribunal, accepted the Report without indicating the Consultant suffered an apprehension of bias or that its conclusions are unreasonable or unsupported, based on the evidence.

DARKNL caused great public distress and discomfort. It endangered the whole economy of the Province. Warming centers were opened to provide for those who had no secondary heating source. Businesses closed and people were unable to work. Corner Brook Paper and the Come By Chance Oil Refinery curtailed operations in order to supply their own power capacity to the provincial grid. The President of the Newfoundland and Labrador Association of Fire Services reported on January 6, 2014 nine cases of carbon monoxide poisoning in the eastern portion of the island since the power outages began; one of those cases resulted in a death.”

By any measure, Nalcor's management practices were catastrophic. 

Lack of confidence in Hydro has since motivated thousands to install power generators at substantial personal expense.

How did Ed Martin respond to Liberty's item by item exposition of Hydro's management and operational failures?  He told the Telegram “he’s generally pleased with the report”.  Last April, following release of the Interim Report, he stated: "On a first flipthrough, we generally agree with the recommendations and we're pleased to say that they do align with the recommendations that Hydro ourselves came out with several weeks ago after we completed our internal report."  So, Martin is pleased with an assessment he is not up to his job?

This, of course, is another example of Martin’s disarming spin. Martin is media savvy. But DARKNL proves it is not a good idea to have a PR man in charge of the Province’s electrical system. 

Does Ed Martin think that the resignation of former Premier Dunderdale adequately covers for his failed stewardship?

Dunderdale certainly was an unwise political leader whose missteps, including the handling of DARKNL, prompted her downfall. But, objectively, Ed Martin and his management team have been found wanting by a group of professionals far removed from the conflicted social and financial relationships that prevail in Newfoundland and Labrador. States Liberty:

“Hydro needs a single executive under which it can consolidate the principal functions associated with delivering utility service.” The Group adds “(t)his new, full-time Hydro executive needs to be in place soon; a leader with proven, top level utility executive experience would be a first choice.”

What else does Liberty say?  The Group states: “…utility holding company governance would call for...expanding the range of skills and experience among the directors on Hydro’s board, using a structured assessment of needs that correspond to the nature of Hydro’s operations…”

In other words, the capabilities of the current Board do not match with those required by a utility, like NL Hydro. This is not a group able to see Martin out the door.

Where is the political leadership, as this second Report is released?  We hear only the plaintiff cry of another Premier who will not lead. Davis sulks “we haven't been able to catch a break”!

Such missed opportunity!

As for the public, the outrage over DARKNL still resounds; the correct response by the political leadership to Ed Martin’s failed leadership still eludes.

Who will tell Ed Martin his time to go has long passed?

Hashtag #Ed Martin has to go.  

That should work!