IS RATE MITIGATION EVEN POSSIBLE AFTER MUSKRAT?

Guest Post by David Vardy

This is the sequel to my post of March 19, 2018 on the financing of Muskrat Falls called The Impossible Dream Part I: Financing The Labrador Transmission Link. In this post I measure the increased costs associated with Muskrat Falls and discuss the impact on rates and the potential for rate mitigation.

Rate Mitigation

A recent Telegram article (“Power Rate Options Still Unclear”, Telegram, May 5, 2018) . refers to “$60 million to $70 million required to decrease customer rates by one cent per kilowatt hour”. This suggests that, if rates were increased from 12 cents to 17 cents, revenues would rise by $300 million to $420 million. This is highly unrealistic.

TOP TEN MUSKRAT MYTHS: PART I

Guest Post Written by "JM"

The arguments for Muskrat Falls were always more qualitative than quantitative; they appealed to the common sense aspect of peoples' decision-making and thought processes. 

Who has not heard claims of "green energy", "stable rates", "power for industrial expansion in Labrador", "lowest cost option", "export revenues", and "we need the power"? 

It is natural for people to embrace assurances that are of the “motherhood” variety especially if they trust the one making the promise; however, ill-advised.  

Indeed, the promise of Muskrat never seemed huge enough. And when it didn't, there was always former Premier Tom Marshall to up the ante with this mother of all promises: "the project won’t contribute to our net debt".