NALCOR AND CONSULTANTS FACE LIABILITY IF NORTH SPUR FAILS

Guest Post by Cabot Martin

My last post on the Uncle Gnarley Blog - entitled Premier Needs Quebec Judge's Help On Forensic Audit - was about possible criminal activity on the Muskrat project and the need for a forensic audit.

The previous piece I authored - back in May - was called Of Deceit, Emera and Muskrat Madness. It described a possible action of civil deceit against Emera with respect to their very burdensome Muskrat contracts with Nalcor.

Both very important issues. 

But as my good friend Con O’Brien is quick to point out, over-riding all is the North Spur.

Muskrat must be halted for that reason alone – Now.

But that issue sometimes (all the time?) gets lost in the Muskrat shuffle.

So let’s go through it yet one more time.

SOCIAL PROGRAMS TO BE CRUSHED BY MUSKRAT SUBSIDIES

Guest Post by PlanetNL

PlanetNL2 – Muskrat Will Cause Monumental Government Debt and Social Pressure

In last week’s inaugural PlanetNL, the post-Muskrat rate hike was predicted to rise quickly into the 30-35 c/kWh range and then to continue to spiral upward as the market continually fails to deliver required revenue.  This pricing model should be considered theoretical because it’s too insane to think the Government would actually allow rate runaway to happen and not attempt to intervene with a better alternative that can preserve stability of the market and the survival of the utilities that serve it.

Logically, Government must limit rates to some sustainable level that ratepayers can bear.  They must also not allow the bankruptcy of NL Hydro and the Nalcor companies as this would lead to the evisceration of core Government assets to outside interests.

Government has little choice but to lean heavily on the public purse of the taxpayer to make up the shortfall in utility revenue.

IN PICTURES: NALCOR DUMPS MILLIONS

Nalcor’s lack of quality control on the Muskrat Falls project failed to detect a faulty transmission cable, containing a "popped" wire, which was strung — with the defect — on a large section of the Labrador Island Link.

CBC reported the issue in June 2016. Flabbergasted by what he had read, James L. Gordon, the Canadian engineer who has written repeatedly on the Uncle Gnarley Blog, contacted renowned transmission line designer J.P. Schell, P. Eng. (Ret’d) and asked him to examine the issue. Mr. Schell wrote a piece entitled Design Engineer Baffled By Extent of Muskrat TL Flaw Reported by CBC for this Blog.

The transmission cable (170 km X 2 lines = 340 km of D.C. conductor wire) was spun at the factory, shipped, stored and erected before anyone at Nalcor noticed — testimony to a management ill-equipped for the roles they fill.

MUSKRAT WILL DESTROY UTILITY SYSTEM IN 2020

Guest Post by PlanetNL

PlanetNL1: Like a Hurricane - Muskrat To Destroy Utility System in 2020

This guest blog series is offered to demonstrate the true value of Muskrat Falls (aka Lower Churchill Project) and to expose the risks and burdens imposed by it on Newfoundland ratepayers and taxpayers.  The view will be predominantly forward looking, relying on best available project and market information to deliver plain economic analysis that can be appreciated by a wide range of people.  There will be little ranting as the dire economic concerns will speak for themselves. 

First up is a deeper exploration of consumer billing rates than Nalcor and Government have been providing.  The Nalcor rate projection has consistently gone up as the Muskrat project has advanced with cost overruns, yet it seems they have not given all the facts.  They already have a prediction of more than doubling rates after the project is commissioned in 2020 but PlanetNL projects that rates will actually shoot much higher.

PREMIER NEEDS QUEBEC JUDGE'S HELP ON FORENSIC AUDIT

GUEST POST WRITTEN BY CABOT MARTIN

So is the Muskrat fat finally in the fire?

Premier Ball’s nostrils are definitely offended by the stink from Muskrat Falls but it’s Nalcor’s method of paying it’s top end workers that seems to be the immediate cause.

We’ll have an inquiry into Muskrat, he says, and it will even start before the site is deserted. We are working on the Terms of Reference, he says, 

... and this employment contract mess will be included and, of course, we cannot delay the project.

Opps!

A curious turn of logic. Big problem – long finger.

Premier – you are on the mark with the need for a Public Inquiry but you need a road map to get there.

RCMP MUST ACCOUNT FOR FAILURE TO INVESTIGATE NALCOR

The poorly conceived August 31, 2017 EY Report on the Muskrat Falls project was essentially irrelevant, albeit with one major exception. 

EY stated that “the Project [still] retains a high level of inherent risk”. The firm said that the risks included “a series of complex and significant activities” which will command a “high planned spend rate”.

Cited as examples were construction at the North and South Dams, continuing power plant installation, turbine and generator installation, HVDC commissioning, and the approaching winter.

Why should the issue of “high level of inherent risk” justify revisiting?

EY REPORT ON MUSKRAT FALLS MOSTLY A BIG MISS

When it comes to auditing the risks and shortcomings of the Muskrat Falls project, and the incompetence of Nalcor, EY is no Liberty Consulting Group.

Plain-speaking Liberty, employed by the PUB to analyse the cause of the breakdown in service during DarkNL, persistently offered a clear narrative of what reforms might effect change.  

In contrast, EY’s prescription for Muskrat is so couched in practised opacity and bathed in bureaucratization that often only the innocuous is illuminated. The Muskrat Falls Report entitled "Assessment of Implementation of EY Interim Report recommendations" is essentially a document for politicians to point towards. It is strong on neither engineering nor cost-accounting. 

B.C.'s SITE C AND MUSKRAT FALLS COMPARED

Guest Post by David Vardy

Summary of Submission to BCUC

This is a summary of my detailed submission entitled "Site C and Muskrat Falls Compared" made to the British Columbia Utilities Commission relating to their inquiry into Site C. This inquiry was initiated by the new NDP government of BC and is directed towards the determination of the costs of continuing, suspending or terminating the project.  

In both provinces there were joint federal provincial environmental reports. In each case the joint panel recommended further detailed financial and economic analysis to confirm the wisdom of proceeding, recognizing that no strong business case had been presented for either Site C or Muskrat Falls.  Both provincial governments proceeded with little deference to the advice from the joint environmental panels.