BIG BALL PROMISES: LET'S GET THEM IN WRITING

“We just want to clarify, there is no way ratepayers in our province could pay or should pay for the burden of Muskrat Falls.”  The province will be “separating the ratepayers from the Muskrat Falls debt.” It is a “tremendous burden… a debt issue, not a ratepayer issue.”  These are all direct quotes which the CBC attributed to the Premier in a by-election kick-off for Liberal Candidate, Paul Antle, in the District of Windsor Lake.

What else did the Premier say? He said, “we are not looking at increasing taxes for people in Newfoundland and Labrador.”

As others have asked, if both ratepayers and taxpayers will be spared responsibility for the $12.7 billion Muskrat Falls debt, who is going to pay?

BUSTING THE PREMIER'S NUMBERS AGAIN

Guest Post by PlanetNL

PlanetNL13: Busting the Premier’s Numbers Again

In PlanetNL12, an analysis of Government’s secretive two-tier declining rate scheme calculated the impact on three types of electricity customers.  The unfairness of such a rate scheme was made clear: the less electricity you use, the more steeply your Government wants you to pay for Muskrat.  This approach will tend to hit the many poor and working-class who struggle to pay their bills especially hard.  Meanwhile at the other end of the spectrum, the few who tend to have large high-energy homes will be pleased with little difference they’ll find on their power bill.

How did Government and Nalcor keep this unexpected twist of rate design?  Well, they simply didn’t want to tell us and for about two years they carefully misled us.

18 c/KWh – WARNING – NOT EXACTLY AS ADVERTISED

Guest Post by PlanetNL

PlanetNL12: 18 c/KWh – Warning – Not Exactly as Advertised

The last day of NL Hydro witness testimony at the General Rate Application hearings at the Public Utilities Board revealed a cruel and regressive plot twist. 

A senior NL Hydro manager on the witness stand indicated that Government’s post-Muskrat mitigated rate target of 18 c/KWh was merely an average figure.  He said Hydro was already considering a rate design scheme that would be presented to the PUB in the coming months based on two-tier declining rates.  In other words, the first part of energy used will cost more than 18 c/KWh but the rest will be priced lower.  When all residential users are added up together, the increase will average out to a 55% over today’s rate.

We won’t know Hydro’s exact details for a while, but a model is presented here that plainly shows not everyone will be hit equally.  A substantial number will be hit hard while a small number barely take a hit at all.
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"VOODOO" ECONOMICS RE-VISITED

My late brother, Brendan Sullivan, was one of the first opponents of Muskrat Falls and wrote a pre-sanction article employing the term “voodoo economics”.  It described a scheme contrived by Nalcor to lower power rates early in the project by back-loading the equity repayment onto future generations. His post of November 29, 2012 stands the test of time. He was efficient in his words of caution, too. Brendan could see the project for what it was: economic smoke and mirrors. 

NEWFOUNDLAND POWER SHOULD FEEL THE PUBLIC WRATH, TOO

As NL Hydro looks for an illegitimate 6.5% rate increase — smoothing in advance of socking you in the kisser with a Muskrat-sized punch — Newfoundland Power (NP) has applied for a 1.2% increase also to take effect January 1, 2019.

Electricity ratepayers are under assault at every turn.  

The PUB has the best (legal) ammunition. It can say “no”.

The public shouldn't get careless either just because the increase sought is smaller than Hydro’s. NP is attempting to establish a precedent.

HEAT WARNING! (From the Bard)

HEAT WARNING!

(Alert issued by Environment Canada for Humber Valley, July 17, 2018)

The sun now shines in Newfoundland,

Two-months of summer is at hand

Where many move at winter times

To warm their bones in hotter climes -

As Humber Valley holds hot air

An alert is issued to take care.

It happens every summer -

‘Some muggy!’ and ‘some hot!’

In late July and August,

Nerves with thunder shot.

PREMIER SHOULD SEIZE ON BETTER SOLUTION FOR POWER RATES

Guest Post by David Vardy
Premier Dwight Ball said this week that power rates will not be allowed to double. This statement is an important step toward a better solution. It recognizes that the take-or-pay power purchase agreement (PPA) is not a workable solution to the question as to who will pay for Muskrat Falls. The PPA places the burden on ratepayers which is unfair because ratepayers did not ask for Muskrat Falls. It was imposed by an overbearing government, supported by a relatively small group of people who stood to benefit.

The government proposes that ratepayers bear roughly half the cost and that taxpayers pay the rest, citing 2021 rates in the Maritimes at 18 cents per kWh, compared with 12 cents on the Island. Such high power rates, even when reduced from 23 cents to 18 cents per kWh, would still be unaffordable for low income people. They represent an increase of 50%.

MUSKRAT: A FAIR RATE IDEA THAT WON'T SHOCK YOU

Guest Post by PlanetNL
PlanetNL11: A Fair Rate Concept for Post-Muskrat

Premier Dwight Ball has been justifying a massive rate increase to 18 c/KWh as fair because he suggests it is comparable to rates paid in our neighbouring Atlantic Canadian provinces.  Such logic might succeed if only it were true: in the last PlanetNL post, it was clearly demonstrated that the expected rate in those provinces would be 12 c/KWh. 

The Premier’s admission of error has not been heard, therefore it appears Ball is sticking to his plan to punish ratepayers despite the widespread harm it will cause.

In this post, a case is developed for a post-Muskrat rate that would be fair to ratepayers. But it’s sure to be a solution the politicians will fear.  The outcome may shock many. The future proposed rate is coincidentally - and surely to Premier Ball’s chagrin - 12 c/KWh.  

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POPULAR COMMENTS SECTION TO GET GNARLY ATTENTION

Comments on blog posts bring fresh perspectives and unknown issues to attention.  

Wise, interesting and thoughtful comments come from people in all walks of life, many of whom would never think of writing a letter to an editor or calling a political office.  Not all points of view need to agree either – an exchange of views can enhance the posting under which they appear and benefit many readers.  Comments can also be a source of considerable disdain for the posting author and many who read the comments section.

THE DECEPTION OF PARITY: PREMIER'S CLAIM BUSTED

Guest Post by PlanetNL

PlanetNL10 – Atlantic Canada Energy Rates – the Deception of Parity

Where Muskrat Falls is concerned, the Government, regardless of party, has a clear track record of getting the facts wrong. The trend continues as we transition toward the operations and cost recovery phase of project.  The latest misguided gem – being relied upon by NL Hydro at the General Rate Application hearings last week – is Premier Dwight Ball’s stated rate target of 18 c/KWh for residential rates.  The Premier defends this as being comparable to expected rates in the other Atlantic Canadian provinces.  It doesn’t take much research and insight to demonstrate that the Premier couldn’t be more wrong on this issue.
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