Crude oil was trading north of US$50 a barrel for about 30 seconds this week.What with the government’s cash deficit being $3.0 billion and all, CBC had someone write up a little story about what that would mean for government finances.You will see a l… . . . → Read More: The Sir Robert Bond Papers: The Oracle on the Parkway #nlpoli
The Liberals’ signature policy initiative is Bill 1.It is so important that it is the only piece of new legislation the Liberals have introduced in this session that is directly connected to their election promises.Bill 1 creates a new appointments com… . . . → Read More: The Sir Robert Bond Papers: How government decides – From Bow-Wow to Basenji #nlpoli
Policy solves problems.At it’s simplest level, policy answers a question.Cancelling Muskrat Falls is a good example. We are facing a financial crisis. Muskrat Falls is a huge expense. There’s the problem. Turn it into a qu… . . . → Read More: The Sir Robert Bond Papers: Six Rationalisations Pretending to Be Policy #nlpoli
The speech finance minister Cathy Bennett read in the House of Assembly on Thursday was as horrible as the reaction most of the province have been having to it.That’s not surprising given that the entire budget communications program was the product of… . . . → Read More: The Sir Robert Bond Papers: The Rasputisa and the 2016 Budget #nlpoli
Before we even get into this, let’s be clear: the EY review commissioned by the provincial government was never, ever about cancelling Muskrat Falls.Not even remotely or theoretically.Dwight Ball said so in December: ”cancelling this projec… . . . → Read More: The Sir Robert Bond Papers: The Rasputitsa #nlpoli
To understand precisely how insane an idea we have at Muskrat Falls, think of it this way.In Quebec, provincial government policy is to maintain a pool of electricity that is very cheap to produce. This is for use inside Quebec so that the … . . . → Read More: The Sir Robert Bond Papers: Paying for Muskrat Falls #nlpoli
Consultants have consistently reported that the Muskrat Falls project is well-managed and well-led.Despite that independent analysis, MFP has been dogged by significant cost over-runs, significant problems with performance on meeting project timelines,… . . . → Read More: The Sir Robert Bond Papers: How to say little in 34 slides #nlpoli
A tax to pay a tax.Interesting idea, no?Well, that’s what Jim Feehan suggested last week. He told a luncheon meeting of the St. John’s Rotary Club that the government should consider financing the rest of Muskrat Falls through a special tax. … . . . → Read More: The Sir Robert Bond Papers: A tax to build a tax #nlpoli
The infamous JM is at it again.”Top 10 Muskrat Myths” (via Uncle Gnarley) rebuts 10 of the arguments in favour of Muskrat Falls. All of this has been argued before in several places, but this is a one-stop summary of the key points.One to notice is the… . . . → Read More: The Sir Robert Bond Papers: Muskrat Falls electricity prices… again #nlpoli
Telegram editor Peter Jackson took a hard look this week at the implications of Nalcor’s effort this week to jack up electricity rates.As part of the company’s rate application to the public utilities board, Nalcor said a relatively dry seaso… . . . → Read More: The Sir Robert Bond Papers: Nalcor: Generations #nlpoli
The government’s “renewal initiative” is supposed to be guided by something called “evidence-based decision-making.”It’s right there, right after “affordable and sustainable public services” as one of five principles listed in the colou… . . . → Read More: The Sir Robert Bond Papers: Decision-Based Evidence-Making #nlpoli
“I’m concerned that we have an aging asset,” natural resources minister Siobhan Coady Siobhan Coady told CBC in explaining the most recent break downs at the Holyrood generating station.About two years ago, in the midst of darknl, then-Pr… . . . → Read More: The Sir Robert Bond Papers: Old whine still sour #nlpoli
The new Liberal administration is firmly, irrevocably committed to completing the Muskrat Falls project regardless of the final cost to the people of Newfoundland and Labrador.We know the Liberals will build the MF project because Dwight Ball said prec… . . . → Read More: The Sir Robert Bond Papers: Blind in one EY #nlpoli
A very short post by James Gordon at Uncle Gnarley contains a whole lot of information about the dam Muskrat Falls.Gordon is a retired professional engineer with a 60 year career that took him to projects in 15 countries. He knows about hydro-elect… . . . → Read More: The Sir Robert Bond Papers: The Quick Clay Dam #nlpoli
15 minutes.That’s all Tom Marshall said it would take to sell out the bonds on Muskrat Falls.He also said that a federal lone guarantee would lower electricity prices for consumers from Muskrat falls.The price one wasn’t true at all, as it turned o… . . . → Read More: The Sir Robert Bond Papers: The Bonds of Muskrat Falls #nlpoli
The mighty Muskrat Falls turned up a few times in the leaders’ debate on Monday night. Now that the project’s huge problems are plainer, folks like Earle McCurdy of the New Democratic Party are working hard to capture the anti-Muskrat vote.&… . . . → Read More: The Sir Robert Bond Papers: The parties and Muskrat Falls #nlpoli
Muskrat Falls has been the big issue in two successive elections. In 2011, the parties wanted to talk about the project, while voters didn’t. It never showed up in the list of any Top Five issues for voters. The parties wanted to talk about M… . . . → Read More: The Sir Robert Bond Papers: Methylmercury and Muskrat Falls #nlpoli
From Newfoundland Power’s rate application to the Public Utilities Board.
The interconnection to the North American grid is a transformative event for the electrical system that currently serves the island of Newfoundland. It also creates significant uncertainties for Newfoundland Power and the customers it serves.
How the costs of the Muskrat Falls development and the transmission systems necessary to create the interconnection will be recovered from Newfoundland Power’s customers is part of that uncertainty. The reliability of wholesale supply for the Company and, indirectly, Newfoundland Power’s customers after interconnection, is another part of that uncertainty. These matters will likely be considered by the Board over the next 2 to 4 years. It is already clear, however, that the interconnection as currently proposed will have significant potential consequences for the future cost and reliability of electrical service for Newfoundland Power’s customers. (pp. 1-6 to 1-7)
. . . → Read More: The Sir Robert Bond Papers: Scary words #nlpoli
Muskrat Falls will ensure consumers in Newfoundland and Labrador pay much higher electricity rates than they otherwise needed to pay.
The latest Nalcor estimate is that consumers in the province will see a 53% jump in rates between now and 2020, with rates hitting 19.8 as the project enters commercial production.
The information came in the reply by Nalcor officials to a question by Tom Baird. Here’s a screen cap of the portion he tweeted on Tuesday:
Double whammy there for Nalcor:
Bad enough. the 2020 date confirms recent projections from two different independent sources – via Uncle Gnarley – that Nalcor’s megaproject in Labrador is now two years behind schedule. There’s a very good likelihood the real date will be later..
Far worse, you now know you will be getting a massive – and entirely unnecessary – jump in electricity rates due to Muskrat Falls. . . . → Read More: The Sir Robert Bond Papers: Consumer to pay 19.8 cents for electricity in 2020: Nalcor #nlpoli
Since people are wondering if Muskrat Falls really is still the cheapest way to make electricity for local use, let’s take a look at it.
The tale is actually very simple.
Nalcor argued that Muskrat Falls was cheaper than one alternative: an island system dependent on thermal generation using some sort of petroleum fuel like the heavy stuff burned at Holyrood.
Now that wasn’t true even in December 2010, as this SRBP post noted at the time. Even if you accept the contrived studies used in 2012 to justify Muskrat Falls, the massive cost increases for the project have made the Falls more expensive than the alternatives.
The only advantage Muskrat had over thermal (oil) was fuel and those prices have gone in one direction: down. Since you can build a new thermal plant near to the demand source, you wouldn’t need the expensive connections to the mainland. That . . . → Read More: The Sir Robert Bond Papers: Alternatives to the Falls #nlpoli
The average consumer in Newfoundland and Labrador should expect to be paying 59% more for electricity compared to their current rates once Muskrat Falls comes online.
A household that current pays $156 a month for electricity (not including HST, basic charge or provincial rebate) will see their monthly charge increase by $94 a month with Muskrat Falls included. Those calculations use Nalcor figures and current domestic electricity rates.
Former Premier Danny Williams, the man behind the project, dismissed the cost increases for the project as “mouse droppings” and nothing more than the “cost of doing business.”
Nalcor boss Ed Martin said last week that consumer prices would go up by an additional seven dollars a month due to the most recent increase. Martin didn’t explain that those calculations were merely the added costs from the latest increase added to Nalcor’s earlier forecast based on cost over-runs. What Martin also . . . → Read More: The Sir Robert Bond Papers: Consumer electricity costs to jump by 59% due to Muskrat Falls #nlpoli
The latest progress report shows that Nalcor had a productive summer, but an extrapolation by the researcher and writer JM of information in the latest progress reports points to first power from Muskrat Falls in September 2018 and full commercial power by the middle of 2019.
In at post at Uncle Gnarley, JM described the challenge facing Nalcor in 2015:
As correctly noted in the March 2015 oversight report the productivity improvements in Q2 2015 are essential to meeting the final milestone schedule. For the Muskrat Falls team, the summer of 2015 is really “make or break” for the project. They need to get the project back on track before the construction schedule is hampered yet again by another Labrador winter. Winter begins earlier in Labrador than it does on the Island. The project team knows this. The questions is this: is the productivity improving at a pace where . . . → Read More: The Sir Robert Bond Papers: Muskrat Falls commercial power by Q2 2019 ? #nlpoli
‘”Pride is a big factor” a manager at Muskrat Falls told the Telegram’s James McLeod on Monday during the latest media junket to the Big Dig North. People come to work every day and say “I built this.”
Pride is the essence of Muskrat Falls.
Go back to 2012.
All the business people who looked forward to making a fortune off the project never talked about risk, profits, cash flows, return on their investment, and other stuff you’d expect business people to talk about.
They say stuff like “We believe in good things for our province.” Or “… we believe we have the courage to harness the opportunity before us and make these things happen.”
The New England governors and eastern Canadian premiers were in town on Monday for a quick meeting.
The only thing that seemed to make local news was talk about electricity sales. This is old hat for regular readers, but it is worth going over again.
New England wants to buy electricity. They can get lots of it very cheaply thanks to shale gas lately. How cheaply, you may wonder? Well, in August it was running around four to five cents a kilowatt hour wholesale, not including transportation.
To put that in Muskrat Falls perspective, it is less than half the cost of making electricity according to the estimate five years ago. Where the price is these days is anybody’s guess.
Ontario and the faltering Conservative administration in Newfoundland and Labrador are talking about the possibility of developing Gull Island to supply Ontario with renewable energy.
CBC’s online story on Monday said exactly that:
Ontario eyeing Lower Churchill hydroelectric power from Labrador.
But if you listen to what grim-faced energy minister Derrick Dalley said to CBC’s David Cochrane during the supper hour news on Monday, there is a lot less to the announcement than first appeared.