HEATHCARE FUNDING: A WEAK PREMIER BREAKS RANK

"Spineless" best describes Premier Ball – having helped undermine the Premiers’ united front on federal funding for health care. 

It is one thing for the Premier to exhibit poor character locally – having wimped out on both the deficit and Nalcor - both threatening our solvency.  It is quite another to allow this behaviour to reflect on the whole society that elected him or permit it to go unnoticed when the risks of doing just that are significant.

Ball chose to join the Premiers of New Brunswick and Nova Scotia – the two perennial toadies to the federal government. Their decision to break ranks came mere days after the Premiers met with the federal health minister and affirmed their united stand against her offer.

NO LIMITS ON INCOMPETENCE. ANOTHER $700 MILLION FOR ASTALDI

This Blog has reported many times the amount of money in dispute with Astaldi is in the range of $600-800 million. 

CEO Stan Marshall confirmed the sum yesterday. Nalcor, he told reporters, had reached a new contract with Astaldi increasing the value of the original contract by a whopping $700 million ($1.15 billion according to Marshall but $1.0 billion was the figure first reported). 

Some of this money was accounted for in the revised $11.4-billion estimate – making the net impact $270 million. If the PR types think this early attempt to soften the blow, given the size of the award, they are mistaken.

$700 million is a staggering sum. It not only creates a new and higher project cost estimate of $11.67 billion, it forces us to ask for the thousandth time: does anyone at Nalcor know what they are doing? And, why hasn’t Stan Marshall sent them away?

BURYING SECRETS: NALCOR AWAITS RESCUE AS GIL BENNETT TALKS TO HIS MIRROR

The appointment of Stan Marshall as CEO has not diminished the culture of secrecy at Nalcor. It was born under former CEO Ed Martin and current V-P Gilbert Bennett and is entrenched in a number of insidious ways, each of which ought to be exposed. The more prescient examples are ones that receive the greatest attention – this post describes one more. Still, no one should think they are outcrops of randomness even if discussion of the larger problem awaits.

What should be clear to all, however, is this: if Stan Marshall has brought change to Nalcor’s governance practices they elude the most ardent observers.

Likely, Marshall is more preoccupied with deciding on which knee the CEO of Hydro Quebec will sit - as he come to grips with the reality that a “bad” and a “necessary” deal are one and the same.  

That, too, is an important subject especially given the negotiations underway with la belle province. Marshall likely intends to “excise” the Muskrat Falls project – remove - cut it out -from the “Liberal” narrative; Ball not having had the good sense – let alone the instinct – to keep it grafted onto the Tories’ hide.

INSOLVENCY: LEARNING FROM THE PUERTO RICO MODEL

Guest Post Written by David Vardy

Puerto Rico Financial Control Board

Puerto Rico is a US Territory which has for decades been autonomous. It is not a state. But it has had sufficient independence to build up a debt of $70 billion. Its population is just under 3.7 million and has been declining. This amounts to a debt of US $18,919 per capita or $24,935, in Canadian dollars. RBC's financial projections place the per capita debt of Newfoundland and Labrador at $27,542 by the end of the current fiscal year, or 10% higher than that of Puerto Rico.

Without federal intervention Puerto Rico faced default on its debt, which would have made further borrowing impossible. The US Senate on June 30, 2016 passed the “Puerto Rico Oversight, Management and Economic Stability Act” (“PROMESA”) and it was signed into law by President Obama. The Act enables the government of Puerto Rico to restructure its debt and to regain access to capital markets.

QUEBEC NEITHER ENEMY NOR BENEFACTOR SAYS FORMER HYDRO-QUEBEC EMPLOYEE

Guest Post Written by Bernard Lahey

I am a Quebecer, currently retired, having spent most of my career in the Quebec public sector - including two stints at Hydro-Québec.  From my point of view, most discussions of Newfoundland and Labrador’s dealings with Quebec ignore several important factors. 

At the outset, it might be a useful reminder that those who ignore history are destined to repeat it.  The danger in the demonizing of Quebec is that it avoids drawing any lessons from Newfoundland’s own role in the saga of Churchill Falls and prevents Newfoundlanders and Labradorians from considering further cooperation with Quebec. 

In this blog, I want to offer some food for thought.  I don’t speak for Hydro-Quebec. I had nothing to do with Churchill Falls. However, I am concerned about what is happening on the Rock.  

EVACUATION PLAN NEEDED NOW IN CASE NORTH SPUR OR COFFERDAM FAILS

Guest Post Written by Cabot Martin

As you read this, various crews at Muskrat Falls are involved in a potentially life and death struggle to contain the raging Lower Churchill River.

They face a leaking coffer dam and rafting ice backed by river flows that, in volume, are 25% greater than those at the mighty Upper Churchill.

The greatest period of risk may well be the next three weeks - they are racing Old Man Winter -  time is of the essence.

We can only wish them well.

Unfortunately Nalcor has not adequately documented and explained the various "during construction" flood risks posed  to downstream residents.

However, we know enough to say that those risks , whether from collapse of the coffer dam or failure of the North Spur, are real and substantial enough to warrant immediate action on the evacuation front.

INDEPENDENT ENGINEER WARNS ABOUT MORE THAN COFFERDAM

A Report prepared by the Independent Engineer for the Federal Government on the Muskrat Falls project warned Nalcor long ago about the potential for a leaky cofferdam. The same Report stated Nalcor had failed to record important geotechnical notes detailing the presence of a sensitive clay at the North Spur (the natural dam) called “quick clay” – which has the potential to liquefy under certain conditions and to cause landslides. 

The Independent Report is important for reasons other than the defective aspects of a project the public is learning to hate.

One relates to Nalcor’s attempted suppression of the Report.

Another is that the Report contains serious deficiencies even if there is - finally - limited evidence of a “firewall” separating the Independent Engineer from Nalcor – earlier reports having been demonstrably incapacable of invoking criticism.  

Those matters will be visited later. But, immediately, the public should be apprised of the concerns the Independent Engineer has identified.

CRIMSON ROBE PERFECT FIT FOR JUSTICE ROWE

The ceremony in Ottawa to officially welcome Mr. Justice Malcolm Rowe to the Supreme Court of Canada (SCC) was one of those pivotal moments in a country’s institutional evolution when unanimity prevailed that the right choice had been made and for the right reasons.

Justice Rowe was appointed by the Prime Minister after an exhaustive screening process headed by former Prime Minister Kim Campbell. It was the first time the process had been used to assess the suitability of potential jurists to the country’s highest court.

The vacancy occurred as a result of the retirement of Justice Thomas Cromwell of Nova Scotia. Many, and not just those within the legal community, felt that convention required that his replacement come from one of the Atlantic Provinces. Residents of this province naturally felt that, after 67 years in Confederation, it was time for a nomination from Newfoundland and Labrador.

A TALE OF JETHRO BODINE IN THE PREMIER'S CHAIR

If you read last Saturday’s Telegram containing the James McLeod story “Ball falls, gets back up” you might be left with the impression we shouldn't worry about the province’s fiscal problems. How Ball actually "gets back up" is unclear. But equally doubtful is Ball's description of how he plans to get the budget back to balance: The Telegram paraphrases the Premier:

“The government has already hiked taxes basically as high as possible in the spring budget, so over the coming years it will need to cut roughly $100 million per year to get back to balance by 2022.”

Hold it there! The budget update confirmed a deficit this year of $1.58 billion. That is just the deficit on current account – or as some refer to it the grocery money. 

Even Jethro Bodine - the dimwitted nephew of Jed Clampett’s 1960s ‘The Beverly Hillbillies’ TV series - wouldn't need help with this problem. It is obvious that at the rate of a $100 million annually it will take “roughly” 16 years, possibly out to 2033, to “get back to budget balance” and then only with respect to the current account.

OVER A BARREL: THE START OF A NEW RESOURCE GIVEAWAY?

Inflation exposed the Upper Churchill contract as a “sell-out”. With Newfoundland’s unemployment rate exceeding 20% in the late 1960s, the Smallwood government chose jobs rather than risk Quebec Hydro walking away from the massive project. They made not a single demand — not even a royalty from the grant of water rights.

That is one aspect of a history of resource giveaways. I will note one more — in case you think Hydro Quebec wants to be your friend.

BRINCO was the developer of the Upper Churchill. Hydro Quebec’s strategic and persistent delays in signing a power purchase agreement (PPA) with the company — during which time it spent millions in pre-construction costs — had it facing bankruptcy. The company behaved unwisely, to be sure. They listened to Hydro Quebec’s good-faith claims and ran out of cash.

With Hydro Quebec holding a gun to its head, an additional 25-year extended contract was wrung out of BRINCO at an even lower price than it had negotiated for the first 40 years. Even ancient Rome experienced inflation. But any reflection of such an economic norm was suppressed in the feeding frenzy visited upon a far too trusting business partner.

NALCOR CAN'T BE TRUSTED TO NEGOTIATE WITH HYDRO QUEBEC

The public has been in a state best described as “delusion” since Danny Williams unveiled the Muskrat Falls project. However, this condition is due less to a wilful state of denial than it is to a deliberate, preordained, and persistent institutional and politically inspired deceit.

Neither the government nor the crown agency, Nalcor, can find vested interest in keeping an ill-informed public abreast of the problems that affect them financially - both individually and as a society.

Proof is the credibility which Premier Ball still ascribes to Muskrat. It will be a good project ‘in the long run’, said Ball again recently - seemingly unmind of its problematic state and their consequences.

The deception is also found in the government’s refusal to properly describe the project’s legal status – following the Quebec Superior Court decision.

MUSKRAT FALLS: THE PUBLIC RIGHT TO DECIDE (PART II)

Guest Post by David Vardy

In Part I of Muskrat Falls: The Public Right to Decide, I described how Nalcor’s Board of Directors has been an interim board since April 22, 2016, while the PUB continues to be denied authority for regulatory oversight over the Muskrat Falls project. This Part II examines other mechanisms for regulatory oversight.

Can we find mechanisms which will enable greater public participation in decisions, as well as create enhanced transparency and accountability, or is the only rational decision the suspension of work on the generation site, while completing only the transmission line?

Loss of the Quebec court case on Hydro Quebec’s rights to power from Churchill Falls for the period from September 1, 2016 to August 31, 2041 may have large implications on cost. Similarly recent problems with the coffer dam may add to cost escalation and delay the project ever further. These events add weight to the argument for suspension.

MUSKRAT FALLS: THE PUBLIC RIGHT TO DECIDE (PART I)

Guest Post written by David Vardy

Introduction

Many people are in shock as the drama surrounding Muskrat Falls continues to escalate, along with the rising costs and increased exposure to risk. People are greatly alarmed about the impact on our power rates and on the future cost of living in the province, particularly for those on low and fixed incomes. We embarked on this project without knowing what it would cost and without exploring the alternatives. Much of what could go wrong has done so. All of the risks surrounding the project were pointed out by citizens who were ignored by the previous government.

We need to change our course to reflect the escalating risk to our ability to sustain a standard of living comparable with that of other Canadians. To make this change we need to find out where we are now. Stan Marshall said last week that there will be no report on the project cost until next June, indicating that there is great doubt about our current position. Yet we continue blindly to toss more and more money into this money pit.

THE WAY FORWARD A FISCAL DUST CATCHER

One of the most important revelations in the Ball Government’s policy document The Way Forward — and there are very few — is that it recognizes they have a spending problem. Yet it constitutes neither road map nor resolution for the province’s fiscal woes. Recognition of the problem, alone, is not enough.

Says the document:

“This fiscal problem was not caused by a drop in oil prices, but was instead exposed by the decline in oil prices. The past decade has been marked by an incredible increase in Government revenue… Even in 2016-17, Newfoundland and Labrador has the highest per capita revenue, and the highest per capita program costs among provinces. We cannot treat our current situation as only a revenue problem. Our province has a spending problem.” (p.3)

Still, it is peculiar phrasing — it seems no one discovered they were out of water until the well went dry!

WHO REALLY BENEFITS FROM MUSKRAT FALLS?

Guest Post written by Gabe Gregory

Nalcor's most recent estimate of the capital cost for the Muskrat Falls project is $11.4 billion. Emera is spending $1.6 billion for the Maritime link (ML) to NS. The total capital investment on the venture is $13.0 billion.

The table below - at Line 2 - confirms Nalcor’s estimate of total annual power production from the project at 4.642 TWh. The table also puts at 1.192 TWh Nalcor's most current estimate (June 2016) of how much electricity Newfoundlanders will use in the first year full power is produced. The amount committed power to Nova Scotia, under the Nova Scotia Block, is 1.220 TWh. The balance - 2.230 TWh - is the amount Nalcor can export - though approximately 80% of this power is also committed to Nova Scotia.

STAN MARSHALL DESERVES A GOOD TONGUE-LASHING

It is not difficult to figure out why Nalcor CEO Stan Marshall wasn’t invited by the Premier to sit in on the marathon session with aboriginal leaders. Evidently he would not have been helpful. Already he is dissing the importance of the methylmercury issue — mere days after the protesters broke off their sit-in.

At the beginning of his tenure, Marshall appeared in front of the media to confirm that the Muskrat Falls project is a “boondoggle” and to say that he is trying to mitigate the impact of 21.4 cent KWh power on ratepayers. Otherwise, he has largely been mute.

Whether it was the protesters or something else that stirred him to consciousness is uncertain.

The Nalcor CEO used his two-day media blitz last week to largely dismiss the deal the politicians had constructed. He downplayed concerns about methylmercury and suggested the science would not require clearcutting and soil removal. Marshall may be right. But how is the expression of such views supposed to advance progress in establishing a relationship between the parties?

HOW RELIABLE WILL MUSKRAT POWER BE? PHIL HELWIG DEALS WITH THE QUESTION

Guest Post Written By Phil Helwig, P.Eng. (Retired)

Phil Helwig is a retired Engineer and Hydropower Consultant with over five decades of experience -  much of it right here in Newfoundland and Labrador. He has been a frequent writer to the Telegram on the North Spur stability problem as well as on other issues including power reliability and security.

This is Helwig's first contribution to the Uncle Gnarley Blog. It is a timely one, too. In recent weeks readers have seen posts regarding the Phase I Report of the Public Utilities Board (PUB). It dealt principally with the findings of the Liberty Group's investigation into the root causes of DARKNL. In late August Liberty filed its Report on Phase II of the PUB's mandate which includes consideration of security and reliability issues in the post-commissioning of Muskrat Falls. Phil Helwig has now distilled this Report and comments on the concerns of the Liberty Group for Uncle Gnarley readers. I am pleased to welcome him to the blogosphere and say that I am very grateful to him for lending his expertise in such an important public policy area. - Des Sullivan

METHYLMERCURY PROTESTS: WAS ANYTHING GAINED?

If you are one of the people going gaga over the deal with the aboriginal people of Labrador over methylmercury, you might want to think about what you are cheering for.

The issue is important – it’s just that the cost of even a minimal solution will finish off a project already effectively bankrupt.

There are other lessons that emerged from the protest and its aftermath that the public might want to note, too.

First, if the 2041 Group had occupied Nalcor Offices four years ago, and risked going to jail - as did some aboriginal people – the North Spur might have gotten independent review. The fake Oversight Committee would have been shut down, too and replaced with one both credible and honest. Only because the Inuit were unafraid to face down authority is everyone going kissy face.

IS IT POSSIBLE “TO MAKE MUSKRAT RIGHT”?

Guest Post Written by David Vardy

The marathon consultations between the province and aboriginal leaders concluded early Wednesday morning with an Agreement to establish an Expert Advisory Committee. This was the outcome arising from occupation of the Muskrat Falls site, along with a hunger strike and demonstrations in Ottawa, in Labrador and on the Island. 

The agreement leaves many questions unanswered, including the composition of the Advisory Committee, its governance and its authority. The outcome will rest in the hands of “science” and “traditional” knowledge but often scientific evidence and research are inconclusive or divergent.

How will divergent views be accommodated to reach a reasonable solution to the risks posed to human health by methylmercury? Will the Expert Advisory Committee agree on measures to remove additional vegetation and topsoil to mitigate the poisoning of mammals, fish and birds?  The Agreement also leaves many questions unanswered, including the resolution of the risk of landslides at the Muskrat Falls site because of sensitive clays. These risks have the potential to threaten the safety of workers on the site as well as Labrador residents.

MUSKRAT'S INCREASING COSTS: STAN MARSHALL SHOULD STEP OUT INTO THE LIGHT

It seems the aboriginal people of Labrador will finally have their issues aired — as they should. Still, any deal will represent more cost overruns. Someone needs to ask: how much more is too much? When is it time to say that enough is enough?

The Government has stated it is too late to cancel the project — though it has provided no evidence for this position. Meanwhile, the public has no idea how this nightmare will end. Nor have they been promised the kind of disclosure expected after public officials have so badly screwed up.

Labrador’s “Manifesto”, which includes demands regarding methylmercury contamination and the North Spur, needs to be taken seriously. Yet the cost of continuing should be evaluated, given that major additional costs will be laden onto an already far too expensive project.

Island ratepayers need to get their minds around that question. They need to address other key issues to the Premier, too — such as oversight. Perhaps the new Consumer Advocate, Dennis Browne, can help give formality to this process. The Premier should ask him to engage with "naysayers", Browne having been one of them.

PREMIER SHOULD PUT MUSKRAT FALLS “ON ICE” PENDING FULL REVIEW

The current crisis over methylmercury levels threatening Lake Melville, after flooding at the Muskrat Falls reservoir, cannot be viewed in isolation from the other issues that plague the project - especially its frightening (and growing) price tag. 

This is a renewed call for Premier Ball to put the project on “ice” at least for this winter.

The interregnum will afford a full review of the methylmercury issue and give the public an opportunity (one they should demand) to examine its economic consequences for them, as ratepayers.

Additional clear cutting and soil removal in the reservoir area can only add to an already over-burdensome cost. The Government’s way of dealing with the environmental issues seems at best incremental. The public can have no confidence the Province can afford to have this project completed.

SOUTH OF SAGLEK: A NUNATSIAVUT ADVENTURE

Photo Credit: Des Sullivan

There is a belief, perhaps commonly held, that Labrador, especially its northern domain, is “the Land God Gave to Cain”.  It is an ascription which Jacques Cartier gave the entire north shore of the Gulf of St. Lawrence. Ostensibly, he was alluding to Genesis 4:11–16 which tells us that, as punishment for having killed his brother Abel, Cain is condemned to survive a barren land.

Cartier may have known scripture, but it seems he gave little assessment to the place he perceived only as bleak and desolate. He may have been right about Cain’s reward all the same. It just seems that he had such a limited expectation of a deity he might have thought a merciful God.  

Just possibly, the allusion to “barren” elicits an excess of subjectivity anyway. Indeed, who would argue that destiny’s plan for the biblical Cain might have been not just to survive but to thrive. 

Could there be a better place to embolden and to renew the human spirit than this arctic oasis?

Did the land not testify to an ancient and gifted human occupation — where two great contemporary aboriginal cultures, the Innu and the Inuit — have endured?

THE WAY FORWARD: WHO REALLY HAS THE “OUTCOMES PROBLEM”?

On Tuesday, Hurricane Matthew washed Premier Ball’s “Hour of Indecision” (Part II) off the airwaves. The public need not worry. “The Way Forward”, as Dwight Ball perceives it, is a compass without a needle.  The province is mired in indecision.  

We should hope that the Government’s response to those suffering damages from Matthew will find a speedier response we have to our fiscal storm.

Notwithstanding its seriousness, nor to diminish the personal tragedies left in the Hurricane’s wake, it is becoming easier to sympathize with the media over their excitement about a weather day.

Put yourself in Debbie Cooper’s shoes. Imagine being forced to fill ten minutes of air time based upon Premier Ball’s goal of reducing a measly 14,000 square feet of office space.

Or, think of the “Coop”, as Jonathan often refers to his anchor side-kick,  announcing with the joyfulness of a reader at the Chinese State Broadcasting Corp., Dear Leader’s second big idea - (drum roll needed here) – to increase the farming economy in Newfoundland! That should drive our GDP!

THE PUBLIC LIBRARIES FIASCO: BUMPKINS ON A "B" TEAM

Education Minister Dale Kirby is “surprised that about half the people who attended a consultant session on the future of libraries in Newfoundland and Labrador walked out in frustration”, according to the CBC. Kirby shouldn't be “surprised” at all. It was an appropriate response by a public aghast that politics is so badly broken in this province.

When an elected Government sends out an accounting firm to perform a role politicians are expected to do daily — on a completely non-accounting issue, one that has no technical underpinnings — you know you have elected the “B-Team”.

Don’t misunderstand. It’s not as if we had the option of electing an “A-Team”. That wasn’t on offer by any Party. But the Liberals are so oblivious to the purpose of politics, and their role in it, that we are left to worry not just they are second-rate but that they are a team for which the “B” stands for “bumpkins”. The terminology is deliberate. It refers to those who are more ignorant than uneducated.

This Government should have realized that it miscalculated on the library closures in the first place; that the attempt to save $1 million — when the real goal ought to have been saving several hundred million — was not just silly, it detracted from achieving the larger target.  

DARKNL: IT WAS INCOMPETENCE STUPID

When CBC Morning Show Host Anthony Germain invited this blogger to come on the Show and discuss the Public Utilities Board's release of its September 29th Report entitled "Supply Issues and Power Outages On The Island Interconnected System"  - on the root cause of DARKNL and other major outages on the Island transmission system - I could not say, no! Nalcor, the Tories, and most recently Premier Ball, want to hold onto the narrative that covers everyone's derierre - except the public's. That's the old "aging assets" excuse. Sorry folks, that won't do. 

Germain is a demanding interview; he reads this stuff. I like to prepare by writing out answers to possible questions. I usually end up with more material than the interview can afford - which I suppose is not a bad thing. Imagine if I ran out of things to say!  

Still, I thought that Uncle Gnarley readers might want to see a little more detail on what the PUB said in its Report - which would have been better titled "Who Is Responsible for DARKNL?"  So, what Germain asked and what he didn't - you get to read it all. Oh joy!

HEY CRITCH: LOOK WHO WANTS TO BE PREMIER... AGAIN!

Paul Davis wants to lead the P.C. Party into the next general election. Any sensible person would have to ask: why him? Surely, there are better choices.

Davis told the Telegram: “I never had a lot of time in the premier’s office… there were some ideas and vision and focus that I never had a chance to do.” Interesting. I don’t think anyone does vision and focus. These are attributes used to help shape a larger plan.

Davis was given the boot in the General Election last year.

Still, it is almost impossible to clear the mind of the amateurish missteps with which Davis greeted the public as he left the Lieutenant- Governor’s residence.  The appointment of an unelected Minister, unfamiliar with both political convention and the requirement to seek election, still resounds.

Then there is the Department of Justice fiasco — dropping "Justice" in favour of "Public Safety" — which confirmed that he understood enforcement but not habeas corpus.

"HATS OFF!" TO THE PUBLIC UTILITIES BOARD

Full Report Supply Issues and Power Outgages.....Phase One Report September 29, 2016

It is rare that any Report conducted by Government, or any its Agencies, is so straightforward that it requires no interpretation or commentary. The Public Utilities Board has just released its FINAL Phase One Report on what led to the outages - now inscribed in history as #DARKNL - and who is responsible. This Blog has frequently reported on the PUB's work as well as on the Reports of The Liberty Consulting Group - the PUB's Consultant. I have reprinted the Board's short conclusion here and I have added a very brief note at the end. It is truly an eye-opener as to how poorly "state-owned enterprises" (SOES) like Nalcor, of which NL Hydro is  a subsidiary, are run.  

BERN COFFEY: “EPIPEN” FOR A DITHERING PREMIER?

Dwight Ball’s appointment of lawyer Bern Coffey to the position of Clerk of the Executive Council at first seems another misstep. But it may actually be one of Ball’s better decisions.

It is true, as some have noted, that the appointment of a partisan to the position sets a dangerous precedent. Presumably the province intends to stay committed to the British model of public administration — in which partisan politics and the operation of government remain separate. Therefore we should regard the choice of Coffey as a “one-off” owing to his skills and history. Then, too, the Premier has confidence in him, which is fundamental. Taken together, these are sound reasons why Bern Coffey’s appointment will advance the public interest.

Coffey ran unsuccessfully as Leader of the Liberal Party. The Premier unwittingly denies he is a political appointment — because he has professional qualifications. But this is just another example of the Premier’s inability to use the truth to help bolster his own case. He should not be dismissive of partisans. Without them, his meagre 17% support would be a lot less.

Nevertheless, this is an occasion on which to cut Ball some slack.

CATHY BENNETT’S DAYS IN FINANCE ARE NUMBERED

A new portfolio awaits Finance Minister Cathy Bennett — assuming she doesn’t quit first, or refuse a demotion. Liberal Party insiders report that Premier Ball’s next Cabinet shuffle will see a new face in the Government’s most important and prestigious Ministry.

Why is the writing on the wall for Bennett?

To begin with, the rules of politics are simply against her. But, in addition, Bennett has not demonstrated either the heft or the skilful art of politics essential to survival in a time of great crisis. Besides, in full public view, the Premier has told the Minster to take her fiscal plan and stuff it!

A weak and vacillating Premier has discovered he is unpopular. The rulebook demands that someone — other than the Premier — is blamed.  Giving the matter additional urgency is that a few people from inside the Caucus, and at least one from outside, want his job.

DANNY WILLIAMS - BUFFOONERY MAKES NEWS

It is tough to keep up with the craziness. 

A few weeks ago Danny Williams was in the media saying that the Muskrat Falls project is still a good deal for the province and that we shouldn’t be concerned because all megaprojects experience overruns.  

He repeated an assertion that should bring howls of laughter (derision actually) that the project will bring in hundreds of millions of dollars to the province. At $11.4 billion and counting you have to be pretty brazen to make the claim, as did Williams, that your biggest concern is that "someone is going to screw it up."

Even the recognition by Nalcor CEO Stan Marshall, that the current project represents a cost to rate payers of 21.4 cents per kWh and that revenue on export sales will represent a reduction of less than a cent per kWh, seems not to have blunted the ardour of the former Premier. (Note that Stan Marshall is referring not to the cost of MF power but to a "blended" price and he makes no reference to the fact that the rate applicable to MF power generation is not even the full price in the early years after commissioning - so even at 21.4 cents per KWh Marshall is quoting a price designed to avoid "rate shock".)

Now, Williams wants the entire Province up in arms because Stan Marshall is said to be negotiating away Muskrat Falls, Gull Island, and the Upper Churchill (again) to Hydro Quebec. 

“NORTH SPUR DESIGN UNSAFE” CONCLUDES HYDRO ENGINEER - INSISTS PANEL OF EXPERTS CONDUCT REVIEW

Guest Post Written by James L. Gordon, P. Eng. (Ret'd)

Marine clay, commonly known as “quick clay” and as “sensitive clay” by geotechnical engineers is clay deposited through salt water where the particles pick up salt, which alters the properties of the clay. The clay becomes “sensitive” since it has a propensity to liquefy when disturbed or saturated. It has been avoided by dam engineers due to its sensitivity.

Wikipedia defines marine clays as – “Marine clay is a type of clay found in coastal regions around the world. In the northern, de-glaciated regions, it can sometimes be quick clay which is notorious for being involved in landslides. Clay particles can self-assemble into various configurations, each with totally different properties. When clay is deposited in the ocean the presence of excess ions in seawater causes a loose, open structure of the clay particles to form, a process known as flocculation. Once stranded and dried by ancient changing ocean levels, this open framework means that such clay is open to water infiltration. Construction in marine clays thus presents a geotechnical engineering challenge.”

This explains the controversy surrounding the North Spur dam at Muskrat Falls since it will be the first hydro dam built on a quick clay foundation.

LIBERTY REPORT KICKS LAST LEG FROM UNDER MUSKRAT FALLS PROJECT

Likely everyone remembers #DARKNL. January 2014 - successive days without power followed by rolling outages - tens of thousands of people huddled in the cold and the dark.

It didn’t sit well with anyone – just ask Kathy Dunderdale.

The PUB initiated an investigation into the root cause of the power failures. The Liberty Group, a Consultancy, was hired to conduct the inquiry - which had two phases.

The Phase I Report, released last year, gave exhaustive details of the poor management culture at NL Hydro, the dreadful state of maintenance on Hydro’s generating assets, and the need for more generating assets to enhance reliability – which led to a new generator (sort of) installed at Holyrood.

The Phase II Report dealt with an “assessment of the adequacy and reliability of the IIS (Newfoundland island system aka “Isolated Island Service”) to meet customers' load both up to and after the interconnection with Muskrat Falls.”  It was released August 19^th. 

Liberty is quoted frequently in this Post. It is best that this narrative is described in the Consultant's own words.

FEDS DELIBERATELY EXCLUDED MINISTER FROM 100th BEAUMONT HAMEL CEREMONY

Don’t think for one moment that Chris Mitchelmore’s absence from the podium for the 100^th Anniversary Ceremony at Beaumont Hamel was anything but a deliberate snub by the Federal Department of Veterans Affairs, of a lowly Minister from “the boonies”.

Telegram reporter Barb Sweet reviewed 300 pages of materials obtained under access to information legislation for her story in the Saturday edition. They contain an indictment of a Federal Government all too willing to lie and to engage in cover-up.

The conversation described by the reporter between the local Honour 100 lead, Melanie Martin, and Peter Mills, project manager for overseas events at Veterans Affairs Canada, would have us believe the affair was an “oversight”. But the truth is something far different.

Mills, undoubtedly with senior officials in Veterans Affairs in the loop, dealt with provincial officials as if they were a group that had — to use the idiomatic expression — ‘fallen off the turnip truck’.

TIME FOR NALCOR TO TELL THE TRUTH TO THE PUBLIC

The recent Decision of the Quebec Superior Court rejecting Nalcor’s interpretation of the Upper Churchill Renewal Contract constitutes a very significant loss for Newfoundland and Labrador. 

The loss is felt not just because Nalcor was barred from accessing surplus energy from the Upper Churchill. It skewers the concept of water management on the Churchill River, a Plan essential to maximizing the power potential of Muskrat Falls - especially the plant's capability to meet maximum scheduled demand. Water management is pivotal to any claim to viability of the project.

The Water Management Agreement (WMA), approved by the provincial PUB, is best understood as an “energy bank”, one that makes provision for an independent coordinator to record power delivered to the Upper Churchill from Muskrat and from the Upper Churchill to Muskrat when the plant was capable of producing surplus energy. In that way the water flows are coordinated and their conversion to electricity maximized.

Water management is a perfectly sensible idea. But it can’t be implemented if the legal authority to operate it is void.

THE QUEBEC SUPERIOR COURT GIVES NALCOR NOTHING: WATER MANAGEMENT A PIPE DREAM

Introduction

Just as the pilot signaled readiness for take-off to Saglek in northern Labrador, word arrived that the Quebec Superior Court had delivered its verdict on Quebec Hydro's challenge to Nalcor's interpretation of the Upper Churchill Renewal Agreement. 

Delayed two days in Goose Bay by foggy conditions on the coast, the other members of small group heading out for two weeks of hiking and kayaking seemed energized by the sheer thrill of the opportunity to complete a northern Labrador adventure including the uncertain expectation of committing to the outdoors in an often harsh cold region, 150 miles north of Nain. 

Though I hate the cold, it was less the thought of subzero temperatures and rough seas that sent a chill down my spine. Nalcor, a reckless and uncontrolled crown corporation, one seemingly determined to bankrupt the province, instills in my bones an even worse terror. 

Let's face it: the Quebec Court was never expected to diminish the powers vested in Quebec Hydro under the 1969 Upper Churchill contract. Sober watchers knew that Nalcor had thrown caution to the winds in its bid for Muskrat sanction long before Hydro Quebec acted. Hubris, compounded by hapless government oversight, created the conditions for the Nalcor leadership to ignore the impact of a total judicial loss in a Quebec-centric Court. 

BULLSHIT STILL SELLS IN NEW YORK

The only surprise contained in Moody’s decision to downgrade the Province’s credit rating from Aa3 to Aa2 was that it wasn’t lower. Whether the Ball Administration realizes it or not, Moody’s incomplete analysis of the province’s fiscal position constitutes a small break for a crowd that has so far handled the crisis with hamfisted dexterity.

Possibly it is no break at all. The “market” may well be ahead of companies engaged in the bond credit rating business.  After the U.S. mortgage meltdown in 2007/8, precipitating the U.S. financial crisis (when bondholders discovered they held useless “paper” based upon unwarranted high ratings), no one would be surprised if investors were a tad more savvy these days.

Certainly, if the recent record of borrowing by the Province — which is still dominated by short-term treasury bills (T-Bills) — is any indication, this is a place under careful scrutiny.

Still, for an outfit of Moody’s reputation, it is surprising how poorly it accounted for the so-called “equity” flowing into the Muskrat Falls project.

HYDRO ENGINEER WRITES "OPEN LETTER" TO NALCOR CEO STAN MARSHALL

Guest Post Written by James L. Gordon, P.Eng. (Ret'd)

OPEN LETTER TO NALCOR CEO STAN MARSHALL 

Dear Mr. Marshall,

I write concerning safety issues with respect to the Muskrat Falls Project, and specifically concerning the North Spur.

You have probably been advised by your staff that, while the North Spur does indeed present significant technical challenges, they have been addressed by competent professionals, and so are no cause for concern.

In my professional opinion, such a conclusion is incorrect, and dangerously so.

Let me summarize the current situation at the North Spur, as I see it:

The North Spur Dam at Muskrat Falls will be the first dam ever built containing quick (or marine) clay in the dam body, and on a quick clay foundation.