Monday, 1 April 2019


Denial and deception came easily to the politicians and bureaucrats who had the audacity to sanction Muskrat.  Jennifer Williams, the new NL Hydro President, should decide now if she will take a different path than that taken by the recent Hydro Executives who helped enable the project.

Hydro management remained quiet as Hydro’s Board of Directors imposed a 50-year “take or pay” contract on the province’s ratepayers — for the full capital cost of Muskrat Falls. This contract flies in the face of Hydro’s obligations to protect their customers and to supply power on an effective and efficient basis. The Board shares in the blame for the creation of an economic condition that threatens our economy and the affordability of basic heat and light. 

Ms. Williams faces a troubled legacy that extends beyond even Muskrat, however. Who doesn't remember DarkNL?

In a 2014 Report, the Liberty Group, the PUB's Consultant, blamed Hydro for mismanagement of the province's hydro assets and the lengthy blackout. Liberty cited failures in areas as basic as the “operation of key transmission equipment,” including a failure to replace transformers and maintain major circuit breakers. The litany of neglect continues in this and later Reports.
The appointment of Jennifer Williams to the executive ranks in 2019 does not automatically repair the public's loss of faith in Hydro. The sooner Ms. Williams recognizes that inescapable fact, the faster she will begin the mending process that still awaits the Crown utility. Several executives have been replaced; the job is not complete. She also needs to exhibit a better understanding of the damage done by her predecessor. The enlightenment might create a wider perspective on what customer service really means.

Last week, Ms. Williams wrote to the media in response to “a great deal of commentary… about the reliability of our power system and decisions we may need to make for the future, once both the Labrador Island Link, Muskrat Falls and Maritime Link are fully operational.”  The Hydro President's press release was a commentary on an Uncle Gnarley Blog Post written by PlanetNL and reported by VOCM News. 

PlanetNL had undertaken an examination of two recent Reports filed with the PUB, dealing with system reliability after Muskrat is commissioned. 

The Reports raised the possibility of the need for rolling black-outs should the Labrador Island Link go down during the winter months. They uncloaked two falsehoods used to shore up the thoroughly vacuous business case for the project. One was that the Maritime Link would act as a loop, bringing power to the Island from Nova Scotia in the event of an LIL breakdown. The other is a premise of Muskrat, that Holyrood would be shuttered. If the LIL goes down, both Nova Scotia and Newfoundland lose power. The notion that Nova Scotia could provide emergency power at such a time is naïve, if not deceitful.

The new Reports address those assertions and warn of a third problem. 

PlanetNL states: “Nalcor admits… they cannot assure any firm energy could be imported over the Maritime Link during winter” and adds “even if it could… transmission constraints won’t get the extra power to the Avalon anyway.” 

PlanetNL notes that the constraint causes a transfer of the Avalon’s full 1100 megawatt requirement to be short by 500 megawatts.  It is one more reason (in addition to province-wide rolling black-outs) why thermal back-up at Holyrood is the only safeguard against our freezing in the dark. Only last year, Nalcor completed a brand new (and much delayed) TL to Bay d’Espoir. Why wasn't this problem addressed then?

Seemingly, the new Hydro President thinks PlanetNL’s recitals from Nalcor’s Reports are a tad too truthful for tender ears. In a covering note, she tells reporters, “While we don't always weigh into the public dialogue, I felt it was important to try and clarify for the public — our customers — that we remain committed to ensuring we are listening to their expectations, providing them with the reliable electricity they can depend on and being conscious of the impact of our investments on electricity rates.” This is at best sophistry.

When, in the last decade, has Hydro cared about the expectations of its customers?
In addition to the problem of poor maintenance, a later 2017 Liberty Report noted inadequately-researched load forecasting, concerns over the management culture at NL Hydro, and problems in measuring system reliability. Who is reading these “independent” observations as a commendation?

What has changed?

Interestingly, Williams is comfortable asserting the claim that an outage on the LIL has a “low likelihood of happening”. On what basis? On Nalcor's construction management skills?
The more than 3000 towers along the 1100 km TL were installed without Nalcor having conducted any geotechnical exploration. At the Muskrat Falls Inquiry, evidence has been given that, already, some are tipping. It takes only the collapse of one of those 3000 to crash the system. 

When Ms. Williams' rhetoric is held up against the facts, we are left to conclude one more: denial comes easily to those who use deception to perpetuate public ignorance of Nalcor's unwarranted representations.

At this late date Ms. Williams opines: “… we will continue to negotiate with our counterparts in the Maritimes for longer term reserve sharing.” 

Not only is her response absent the character of certainty (which a modern utility should have plenty of) she offers this familiar refrain: with the PUB looking on, she wants to “strike the right balance between reliability and cost before we make additional substantial decisions on future investments (like gas turbines, commercial contracts for imports, or continued thermal generation).” She has no comment on, or even makes reference to, the grim reality that a re-tooled Holyrood will cost another $1 billion or that the PUB is already preoccupied with “mitigation” of impending unaffordable rates. 

Eight years after NL Hydro sold out its customers in pursuit of a legacy project for Danny Williams, the Hydro President assures us that they “will make decisions in a cautious and prudent manner, with great consideration for costs and impacts on customer rates.”
What do those words even mean to people who have so shoddily treated their customers?
Ms. Williams is perpetuating a view, polished by her Vice-President of Regulatory Affairs and Corporate Services when she was writing Ed Martin's press releases, that the public are easy pickings for a good line.  

Ms. Williams is new to her role. She would do well take a pause and decide if she is content to be part of the “old boys’ club” in the frame of her namesake. 

If she is both responsible and smart, she will recognize that Hydro's institutional culture has been corrupted and will want to change it. She will represent a new generation of leadership that is values-based — beginning with honesty and integrity. She will treat transparency as an essential underpinning of her leadership and push back against those who lie and deceive.  

Perhaps her next press release will examine those values and how she will be guided by them. She could begin by assuring the public that, on her watch, they will never be duped again.

In short, Ms. Williams should try a new beginning.