Stan Marshall, Danny Williams, Siobhan Coady — each one has a
narrative that doesn’t fit with the facts, that can’t stand up to the scrutiny even
of youngsters. Interestingly, the truth could easily favour Marshall and Coady,
but they are unable to resist “spin”; other versions, supposedly, are more
worthy of gratitude and acclamation.
For Marshall, it’s this comment to reporters following Nalcor’s
AGM: “Any megaproject in the world would be happy to be where we are.” Presumably,
the CEO is referring to the progress made on Muskrat in 2017 which he,
ostensibly, influenced. Problem is, he omits that productivity for its major
contractor is still only around 22% (that's an average 2.2 hours of work on a
10-hour shift) and that much of this performance is related to poor management
by Nalcor. Should we await another multi-million dollar claim by Astaldi?
Marshall certainly isn’t worried about budgets, having
negotiated a 4.5% wage increase for Muskrat in 2018 when other industrial
workers — and public servants — are taking 0.0%. He is employing Ed Martin’s
management team and they are still running the site out of St. John’s! Where is
the evidence that this CEO is running things differently?
Marshall is also talking up “rate mitigation,” as is the
Minister of Natural Resources, Siobhan Coady. He, at least, is honest with
respect to the utility of making the Labrador Island Link operational so that
it can access Upper Churchill Recall power, substituting oil at Holyrood. The
CEO told reporters that these savings are not going to “change the big picture,”
that it’s “going to help mitigate the rates and smooth the transition.” And, he adds correctly: “Rates are expected to
double over the next couple of years.”
Coady, on the other hand, is far less forthright. She was
quick to piggyback on Marshall’s comments using his phraseology and, amidst the
verbiage, talked up her desire to “smooth” rates, too.
But, as in the Buckley’s Mixture ads, she wants us to think
that something that tastes awful is good for us. She invokes a cost per kWh “target
range for Atlantic Canada” of between 16 and 18 cents per kWh, in contrast Muskrat
Falls’ power at 21 to 22 cents per kWh without mitigation. She suggests that “government
is aiming to have rates that are competitive with the rest of Atlantic Canada.”
Coady is talking apples and oranges. She fails to note that household use electric baseboard heating is close to negligible in PEI and less than 30% in Nova Scotia, in contrast to around 70% in NL. By and large, 16–18 cent per kWh has a far larger impact here than in the Maritimes.
The Nova Scotia UARB was insistent on the supplementary deal
with Nalcor (else it would not approve the FLG) to make sure rates in that
Province were kept as low as possible. Nalcor agreed to put the cost on NL to
keep NS happy, which included virtually all of the cost-overruns.
In addition, Coady fails to note that the savings are very
short-term, ending when Muskrat is commissioned and Holyrood is shuttered; the
savings from Recall power end then, too.
Coady, like Ball, won’t admit a grim truth to the public: the
plan they are hatching is not about “mitigation” of rates, it’s about “smoothing”
their way through the next election.
That’s Marshall and Coady. However, they’re not in the same
league as Danny Williams. They are Bantam players by comparison.
Danny isn’t content merely to “spin” a narrative so that it fits
nicely with what he wants people to believe; he has to rewrite history.
Williams forgets that the best search engines — Google, Yahoo!,
Bing — and even some of the worst are at the ready to disavow what some
believed were “truisms”.
Marshall said a few positive things about Muskrat and Williams
was on him like fly spit in agreement. Williams’ Press Release ran: “I have
always said the logical way to keep electricity rates from doubling was to use Nalcor
profits from oil and gas and hydro, and eliminate the return on equity to the
province.”
Problem is, Williams didn’t “always” say anything of the kind.
What he said, on that heady day in 2010 at the Fairmont Hotel — when he and
most others thought he could walk straight across the Narrows to Fort Amherst
and not get his feet wet — is this:
“Our priorities have remained steadfast; that is to achieve
maximum benefits for our people, and to secure stable rates and markets with a
good return for the people of this province.”
“Stable rates” (he wasn’t talking 22 cents per kWh, else he
would have gotten his feet wet for sure). “A good return”? That’s not the term
one uses when a $500 million subsidy is required just to secure 17 cent per kWh
power.
And, don’t forget, 22.9 cents per kWh is achievable only by
blending the cost with existing depreciated assets. In fact, the cost of
Muskrat is so high that I refrain from going into the “back-end loading” implications
on which the whole scheme is based — which exposes the need for a $1 billion subsidy
within just a few years after commissioning.
Williams began talking about applying dividends from Muskrat
and other revenues to lower the impact of Muskrat’s cost in January 2017 but he
made no more sense then, than he does now.
Williams’
would have the public believe that nothing is at stake in doing what he
proposes. But the truth is otherwise:
1. In
order to pay off the $3.7 billion we borrowed to invest in Muskrat Falls, we
need those dividends he now wants to forgo. If we don’t get them, the debt will
have to be serviced by the taxpayer. So either the money we need to pay for
health, education and all other public services will have to be diverted to pay
off the money borrowed for our equity in Muskrat Falls, or our taxes will have
to be increased.
2. Last
year we made a paltry $9 million from our oil and gas investments. That should
go
a long way to lowering our electricity rates! As we have discovered, oil and
gas revenues are volatile and can’t be depended on to provide a stable stream
of revenue for rate mitigation.
The public may, in time, applaud Marshall (though he is coming
across as a tad too needy) and Coady too. But, as for Danny, I’m far less
certain.
The truth can, indeed, be inconvenient. But shocking is the
pain that awaits all those innocents when the bills arrive. Having stopped believing
in Santa, pretty soon people won’t even care what Danny says.
