RATE MITIGATION AND OUR FISCAL CLIFF

Guest Post by Ron Penney

The Government put out its rate mitigation plan last April prior to the provincial election.

It also asked the Public Utilities Board to examine rate mitigation and hearings are presently underway.

Unfortunately both efforts are being promised and undertaken in isolation, ignoring the real elephant in the room, our dire financial situation.

STAN: DON'T LET THE DOOR HIT YOU ON THE WAY OUT

If the public didn't feel so well off, Nalcor CEO Stan Marshall would be gone in a Dunderdale minute. They need to tell Stan not to let the door hit him on the way out. April 2020, his scheduled departure date, won't come soon enough!

Just more than a week ago, Marshall graced the PUB Hearings on rate mitigation with his noble presence. One might have expected him to explain why thousands of transmission lines throughout the world operate using dependable computer software, yet even a two-year delay in the Muskrat Falls project isn't sufficient to get Alstrom, Nalcor’s contractor since 2014 (purchased by General Electric in 2015), off their duffs. Worse, the public has to be satisfied with Marshall’s simplistic assertion that the job is “complicated”.

WHO STOLE THE CASH? BARD ASKS.

THREE MILLION VIEWS

(Gnarley Blog)

Three million views to look at ruse

That politicians bid,

And thirty million spent on hues

Surrounding tale sordid

Of project built to stroke conceit

In cost and schedule skid;

But few clues in verbal chews

On venality and perfid.

CHANGE COMING TO THE UNCLE GNARLEY BLOG

Since 2012, the Uncle Gnarley Blog has posted every Monday and, during much of that time, Thursdays too. Several contributors, notably David Vardy, “PlanetNL”, "JM", Jim Gordon, the “Anonymous Engineer”, “Agent 13”, the “Bard of Pynn’s Brook”  John Tuach — to name some of the most recent and prolific amongst them — have played a major role in offering analysis and opinion on the many facets of the Muskrat Falls Project, in addition to the province's fiscal challenges.  All have demonstrated enormous dedication to a high standard of research and writing, as well as the capacity to explain and simplify exceedingly complex issues.  

FEDERAL ELECTION: BE READY TO CONFRONT THE ‘SILENT SEVEN’

If any of the 338 Federal MPs in the House of Commons entered a race to name the “most quiet” politicians, the Newfoundland and Labrador seven would win hands-down!

For them, flying under the radar is a practiced art, a condition which may change slightly during the next six weeks of the Federal Election Campaign — though, if they are re-elected, reversion to “same ol’, same ol’” is a certainty. Even NL's Minister in the Federal Cabinet loses his tongue for extended periods, occasionally bobbing up to utter some vague assurance that he is on the job. What job is seldom clear.

GROWING DOPEY

Tax revenues for growing dope!
But growing food? Scant funding hope.
It's policy from Pols myope,
When shops run out, how do we cope?

In NL where the weather tries
And ferry service oft awry
And washouts due to rain are high
On long-haul transport can't rely.

MUSKRAT: LESS A PLAN THAN A CONSPIRACY?

Last time, author and consultant to the Commission of Inquiry, Dr. Brent Flyvbjerg’s thesis of “strategic misrepresentation or political bias” (at P - 00004, p 17) was discussed as an explanation for how the absurdly unnecessary and uneconomic project Muskrat Falls project received sanction.

Flyvbjerg’s thesis posits  that “… forecasters and planners deliberately and strategically overestimate benefits and underestimate cost and schedule in order to increase the likelihood that it is their projects, and not the competition's, that gain approval and funding.”

Undoubtedly, there are still people who believe that the Muskrat Falls project grew out of a process of evaluation based on the statutory requirement of lowest cost and reliability.

WHEN YOU THINK MUSKRAT, DO YOU BELIEVE “NEVER AGAIN”?

There are a few matters that need to be discussed before the details of the Muskrat Falls debacle test the patience of readers (as if they haven’t already).

Reflections on the past year, as the Inquiry examined a bevy of politicians, bureaucrats and consultants, leads essentially to a single question: how did so many people in positions of responsibility exclude themselves from common ethical norms and processes, as well as the “best practices” of their professions, affording themselves engagement in a lengthy, complicated, and costly plan of deception to achieve the sanction of such a reckless, state-sponsored project?

The question is only partly addressed here; the lengthy and diverse evidence supporting the mostly likely thesis — better coming from the Inquiry Commissioner anyway — would test most anyone’s patience. Still, the likelihood of Muskrat’s repeat is high. If the next one is not on that scale of “crazy” it is only because no one is foolish enough to lend us the money — not because the current political leadership is any less reckless. 

OPTIMISM IS NOT A PLAN: ADDRESSING NL'S FISCAL CRISIS

Editor's Note: What follows is the text of my remarks to  St. John's  Rotary today titled "Optimism is Not a Plan: Addressing NL's Fiscal Crisis". I am truly grateful for this opportunity. - Des Sullivan

Ladies and Gentlemen:

Firstly, I want to thank Rotary for inviting me. Let me also acknowledge your work supporting an array of projects and commend you for offering an essential platform from which to air important public policy issues.

Having been an intervener at the Muskrat Falls Inquiry with Ron Penney and your fellow Rotarian, David Vardy for the past year, Muskrat might have been an obvious subject for my remarks today. However, a desperately larger issue looms over us…the Province’s debt and deficit which, of course, is inseparable from the Muskrat Falls Project anyway. 

THE ELEPHANT IN THE ROOM

Guest Post by David Vardy
The province’s deteriorating fiscal position has been linked with Muskrat Falls but yet it has received scant attention. Virtually absent from the Muskrat Falls Inquiry (MFI), and from the PUB reference Inquiry into Rate Mitigation options, is the fiscal impact of the project. It remains the elephant in the room, in plain view but virtually ignored by both inquiries.  Yet it is the major public policy issue facing the province.

The PUB reference Inquiry is focused on the means whereby revenues can be generated to pay the increased revenue requirements to operate our electrical power system, rather than on the fiscal impact. In its work the PUB has been directed to examine measures to reduce the cost of providing electrical power as well as to identify new sources of revenues.  The fiscal impact of the project remains outside of the scope of the PUB. All of this suggests we must look to the MFI for an assessment of fiscal impact.