"EXTREMELY FRUSTRATED" PREMIER GOES TO SNC-LAVALIN FOR ADVICE

The following statement is not correct:

“Running at full output, Churchill Falls (CF), would discharge about 2000 cubic metres per second into the Churchill River. Assuming no reservoir draw down, this level of discharge from CF would by itself provide about 630 MW of production at Muskrat Falls. We could run MF at a higher output level for a period of time and draw down the MF reservoir… we could keep it at Muskrat Falls as well as anywhere else.”

That was Gil Bennett talking a couple of years ago to law student and political Blogger, John Samms, who is now on staff in the Premier’s Office. Note the word “drawdown” to which I will return.

At the time Bennett was telling Samms how Nalcor intended to access surplus power from the Upper Churchill; the amount that exceeded what Bennett erroneously thought was the full contractual power commitment to Hydro Quebec. That assumption didn’t work out too well for Nalcor, the Quebec Superior Court having ruled that Hydro Quebec is entitled to all the power that the Upper Churchill can generate. The Water Management Agreement, intended to coordinate the flow of water, was stillborn too.

THE QUEBEC SUPERIOR COURT GIVES NALCOR NOTHING: WATER MANAGEMENT A PIPE DREAM

Introduction

Just as the pilot signaled readiness for take-off to Saglek in northern Labrador, word arrived that the Quebec Superior Court had delivered its verdict on Quebec Hydro's challenge to Nalcor's interpretation of the Upper Churchill Renewal Agreement. 

Delayed two days in Goose Bay by foggy conditions on the coast, the other members of small group heading out for two weeks of hiking and kayaking seemed energized by the sheer thrill of the opportunity to complete a northern Labrador adventure including the uncertain expectation of committing to the outdoors in an often harsh cold region, 150 miles north of Nain. 

Though I hate the cold, it was less the thought of subzero temperatures and rough seas that sent a chill down my spine. Nalcor, a reckless and uncontrolled crown corporation, one seemingly determined to bankrupt the province, instills in my bones an even worse terror. 

Let's face it: the Quebec Court was never expected to diminish the powers vested in Quebec Hydro under the 1969 Upper Churchill contract. Sober watchers knew that Nalcor had thrown caution to the winds in its bid for Muskrat sanction long before Hydro Quebec acted. Hubris, compounded by hapless government oversight, created the conditions for the Nalcor leadership to ignore the impact of a total judicial loss in a Quebec-centric Court. 

VISION BUILT ON DELUSION (PART II)

Written By: "JM"

When the Muskrat Falls story is fully written, the date July 22, 2013 may be given prominence as one of those pivotal moments when Nalcor management ought to have counselled the political leadership to change course on its strategy for Muskrat Falls. 

On the morning of that day, the Utility and Rates Board of Nova Scotia (UARB) rejected Emera’s application for approval of the Maritime Link (ML) stating the deal had to be sweetened by $700 million to $1.4 billion (Net Present Value); otherwise the construction of the Link would fail as the lowest cost option for that Province.  

That same afternoon, the Nalcor CEO was advised that Hydro Quebec (HQ) had filed a declaratory judgment in the Quebec Superior Court requesting clarification on the interpretation of the 1969 Power Contract. The contract clauses requiring interpretation by the courts initially appeared routine, perhaps even innocuous in nature.  However, this challenge threatens the very foundation of the Muskrat Falls business case.