Guest Post by David Vardy
The Economics of Muskrat Falls (Part II)
This post builds on Part I entitled Will Muskrat Falls Pay Dividends? (Part I) which was published on Thursday,
November 8, 2018. That post is
recommended reading for this Part II.
I have attempted below to examine the likelihood that Muskrat
Falls will cover all of its costs. To make this assessment I have used the
“revenue requirement” projections supplied by Nalcor in response to my
ATIPPA request for each component of the project, along with the return on
equity assumptions used by Nalcor. The return on equity (ROE) for generating assets is 8.4% and is
built into the PPA for 50 years. 