FORENSIC AUDIT ONLY SCRATCHES SURFACE OF SANCTION COSTING ERRORS

Guest Post by PlanetNL

Planet NL15: Forensic Audit Only Scratches Surface of Sanction Costing Errors

The release of the Grant Thornton report on Friday raised serious doubts about Nalcor’s pre-sanction justification for the Muskrat Falls project.  The report indicated enough areas where weakly constructed assumptions would add up to show that the Muskrat Interconnected option would not be the least cost alternative compared to the remaining Isolated Island option.

Despite these very persuasive snapshots, the Inquiry may only have gotten just what it asked in terms of the forensic audit’s time and budget limitations from a team with little experience in electricity utilities.  The story is not yet complete enough and the Commission should pursue reconstruction of Nalcor’s cost models using an extensive revised set of assumptions developed by an experienced utility consultant.  It’s a significant undertaking but one that appears essential to allow the Commissioner to concisely explain the project’s economic fallacy.
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WHERE YOU CAN ASK QUESTIONS YOU WON'T HEAR AT THE INQUIRY

BAY DU NORD: TURNING GOOD NEWS INTO DISBELIEF

Guest Post by Agent 13

The decision by Equinor (formerly Statoil of Norway) and Husky Oil to further assess the feasibility of developing the Bay du Nord oil field, located some 500 km offshore in the Flemish Pass region, represents good news for the province. Unfortunately, the Ball Government turned what was a good news day on July 26, 2018 into one of disappointment and disbelief.  

That the provincial government thinks it is solvent enough, knowledgeable enough, or savvy enough to deal with one of those major oil companies — with their mixed portfolio of huge capital assets — is a prolongation of the same pretense that facilitated the reckless decision to sanction the Muskrat Falls project.

FORENSIC AUDITOR CONFIRMS NALCOR UNDERSTATED COST ESTIMATES FOR MUSKRAT

This post co-authored with David Vardy

The Forensic Auditor's main conclusion was that based upon its “findings and observations, at the time of sanctioning” a “combination of…potential misstatements may have resulted in the Interconnected Island Option (the Muskrat Falls project) no longer being considered the least cost option at the time of sanctioning.”

In coming to this conclusion, Grant Thornton has confirmed long held suspicions that Nalcor planned to advance sanction of the MFP regardless of the consequences. Essentially, the Forensic Auditor chronicles a narrative that suggests recklessness on the part of Nalcor Energy. The Forensic Audit was made public by the Commission of Inquiry September 21, 2018.

"AT THE MERCY OF THE WEATHER": HYDRO NOT READY FOR WINTER, SAYS PUB CONSULTANT

Guest Post by PlanetNL 

PlanetNL14: Hydro Reliability This Winter - At the Mercy of the Weather

The Liberty Consulting Group is a specialist frequently utilized by regulators to provide critical analysis of how utility businesses are performing, especially in the wake of major failure.  The NL PUB hired Liberty in 2014 to assess the causes of the January 2014 outage event known popularly as Dark NL and to subsequently monitor NL Hydro’s plans to upgrade the system.  Liberty has evaluated Hydro’s winter readiness every year since and is monitoring the Transition To Operations (TTO) efforts to integrate Muskrat Falls, the Labrador Island Link and the Maritime Link.

TRUTH GETS A ROUGH RIDE IN WINDSOR LAKE BYELECTION

When Premier Dwight Ball kicked off the Windsor Lake byelection claiming that ratepayers and taxpayers – both – would be spared the burden of the Muskrat Falls project he wasn’t being fanciful; he was being dishonest. Hyperbole is seldom a sidebar in any election.  But this time the sheer size of the promises surely made them the main event.  Particularly disconcerting is that Ball's rate mitigation claims lacked any proof of viability. 

Sincere and sensible politicians will avoid over the top promises especially when they know that they are playing a limited hand. The Premier squarely placed himself among the less disciplined. Likely, for that reason, the public seemed to treat them with something ranging from scepticism to derision.    

Ball’s dark side has been exposed before. His doubtful narrative around the sacking of former CEO Ed Martin and how the latter still ended up with a multi-million-dollar severance package contains the same insincerity.

MF COALITION TO HOLD FIRST MEETING TONIGHT

Notice of General Meeting of the Muskrat Falls Concerned Citizens Coalition (MFCCC) The first meeting of the Coalition will take place at 7:30 p.m., Wednesday, September 12th at the Holiday Inn, 180 Portugal Cove Road, St. John’s, to bring our members up to date on our preparations for the hearings which will commence on Monday, September 17th.

This meeting will also be broadcast Live via our Facebook page for those not able to attend in person.

Please let us know if you will be attending in person by RSVP to info@mfccc.ca.

PREMIER'S STATEMENTS FALL SHORT SAYS COALITION

The Muskrat Falls Concerned Citizens’ Coalition, headed by David Vardy, Ron Penney and Des Sullivan (the latter also hosts this Blog) wrote the Premier on September 3, 2018 seeking specific commitments and clarity following his statements to the effect that ratepayers would not be expected to bear the costs of the Muskrat Falls project and offered to reinstate the authority of the PUB to set rates.

Following receipt of the letter, the Premier made a further statement on September 6 which fell far short of his earlier commitments. This is the text of the Coalition's response to the Premier's latest comments. This post also provides a link to the full text of the letter sent to the Premier.

WHEN NL NEEDS A HEAVYWEIGHT THERE’S ONLY SEAMUS O’REGAN

Politics is not so comfortable an arena that politicians need only do soft-sell through photo ops and nice-sounding press releases.

Sometimes public policy issues are complicated, require intervention at a high political level and demand considerable analysis. Solutions to the big problems require political shrewdness, dexterity and good relationships at the Cabinet level.

If the politician, even having been appointed to Cabinet, doesn’t grow in the job and fails to learn how to get things done in that highly competitive business, likely he/she will have little to report at the next Poll. While many politicians prefer the soft-serve of social media platforms, the savvy ones — and survivors — will spend a good deal of time making political alliances and setting the stage for when they will need support on a make-or-break issue.

I get no sense that the Minister of State for Veterans’ Affairs, Seamus O’Regan, either understands those rules or has the heft to position himself for the long game.