When it comes to the fight between Danny Williams and NALCOR (doing business as NL Hydro), Danny is right and NALCOR is wrong.
Not surprisingly the NALCOR crowd lie like Muskrat Falls skeets.
Skeets are like Tom Rideout’s skunks. They do not change their spots.
Williams sent a letter to the Prime Minister about the Churchill Falls deal Andrew Furey signed with Francois Legault.
In the letter, Williams makes two points. First, he says the average price for electricity under the deal is 2.5 cents per kilowatt hour. He’s right. The deal fixes the price for electricity for both Hydro-Quebec and NALCOR to a set amount, valued in 2024-25 money for a total amount of electricity. It works out to roughly 2.2 cents a kilowatt hour by your humble e-scribbler’s calculation but Danny’s number is close enough for government work.
The point is the amount HQ and NALCOR will pay is fixed not only as a total but they have even fixed the value of the money. That’s basically the same problem as the 1969 contract.
NALCOR says that’s not true, but the key thing about their numbers - reported by AllNL, f’rinstance, “NL Hydro, Danny Williams spar over Churchill Falls deal” - is that they are using a guess. That’s why they say “nominal dollars” in their reply. So when they say the price starts at 1.68 cents and rises to 7.9 cents and then another price, it is in the future and it isn’t linked to anything but their assumptions. They could pick any number. Doesn’t matter. HQ will only pay the price agreed in 2025 dollars up to the maximum of $33.8 billion. Just to show how much nonsense the NALCOR version is, the starting price in 2025 NALCOR talks about is literally the 1969 price adjusted for inflation. That’s just the 1969 price in disguise.
NALCOR is lying, in other words. They know the difference between real (constant) and nominal dollars but they deliberately don’t give the simple explanation you’ve just read. Call it a lie by omission, which is what it is. They deliberately leave out information to keep you from understanding what is going on. If that sounds skeety to you, then you understand that’s exactly what it is. Totally skeety.
And just so you know, NALCOR will pay the same fixed-value price just like HQ will and just as they both do now under the 1969 deal. Same super cheap price. There’s a detail NALCOR won’t tell you, either, unless maybe you ask but even then there’s no guarantee they’ll tell you straight up what’s going on.
Williams also notes Hydro-Quebec cannot replace Churchill Falls for less than 16 cents a kilowatt hour in 2041, when the existing 1969 power contract between Hydro-Quebec and Churchill Falls (Labrador) Corporation ends. Regular readers will remember the simple way Bond Papers put it earlier this year: HQ cannot replace 15% of its current domestic electricity supply - that’s Churchill Falls - within 15 years (when the 1969 contract expires) for less than 15 cents a kilowatt hour.
That’s why signing a deal for just 2.2 cents on average for 50 years is nuts when the working price HQ will pay others is upwards of 15 cents.
That’s why saying - as NALCOR always says - that HQ will just run somewhere else is just not true. It’s another lie. That’s a lot of electricity and they just don’t have the possibility of building that much new electricity for dirt cheap.
That’s why it’s nuts not to link the price paid to something real in the future, like the wholesale price for electricity in New England.
That’s why it’s crackers to say, as NALCOR did in ALLNL, that if we didn’t accept this ridiculous deal we would lose all the benefits of it. Benefits like giving away electricity for less than it’s worth and giving Quebec unbelievable control over Churchill Falls and Gull Island in the bargain. That’s their rebuttal to Williams’ comments and the 15-15-15 jam that Quebec would face if we didn’t accept this deal.
There’s lots of things that are just amazing about NALCOR pushing another bad deal exactly the same way they pushed Muskrat Falls: with lies and other misinformation.
Amazing the skeets would climb into a barrel so people can shoot their super weak arguments full of holes easier.
And amazing above all else that on this one that Danny Williams and I are absolutely in agreement.
We return you now to The Apocalypse already in progress.
Do the Apocalypso.
Churchill Falls, Again, but Worse
Andrew Furey has produced a masterful recreation of the legendary Churchill Falls failure, giving Quebec another 50 years of super-cheap electricity with nothing in it for Newfoundland and Labrador except a few construction jobs. For good measure, Furey fell for the same bait-and-swit…
My opinion too, seeing DW on TV, I thought his efforts to engage with PM Carney was good, given they both have extensive business ability, but also can help Danny improve his tarnished image on the Muskrat boondoggle. That MFs can be a good economic project in the future, in the long run, is a stretch, and begs the question : how long? If its output is coordinated with the Upper and Gull projects on this river, for maximum benefit for NL, not primarily HQ's benefit, even MFs tarnished image, with some good luck, in the long run, can be improved.
That the new deal should be "tied to New England wholesale rates" is mostly correct, but the cost and transmission problems of CFs power reaching NW must be considered, given the long distance compared to nearby wind or combustion turbine power benefits of short distances and costs.
Presently the MOU ties power rates about 90 % to HQ domestic and industrial rates, which will remain super low, a formula to guarantee that the NLs share is 5 to 6 times less than the replacement cost of future power sources for HQ: except for wind power. Onshore wind power has a cost of about 4 cent per kwh, and its variable output is of less value than relaible hydro power. They plan on a vast amount of wind energy, is it 10,000 MW capacity? This low cost power needs hydro generators as an anchoring system for wind stability (, wind generators at about only 3 MW each has little mass, whereas the huge mass of the CFs generators (each about 500 MW) provides this stability to help keep the HQ frequency stable when wind energy is added)..
This giveaway for added HQ wind energy seems underestimated by Nalcor in value( actually I feel sure Nfld Hydro engineers are aware, but don't discuss it, for their pretence that this is overall a good deal for NL) .
Yes as before, Nalcor can do consultations with the public, little events at hotels etc and their propaganda material, as the public that have little understanding of the complex financial and power generation/transmission schemes planned.
I suggest that few NLers know the causes or even the existence of the "Battle of Foxtrap", in the 1880s where the public was misled.
This mad MOU scheme, also has the public misled by this Furey/ Hogan government and Nalcor. With enough time and exposure, lets hope the public understands this crazy scheme is really nuts, and puts NL in a straight jacket, and that it gets rejected.
As our wise old economist, Dave Vardy says: CFs power plant is a jewel, not to be underrated in its value to this province.
Joey Smallwood promised that CFs would be mainly for the befit of our province, but over 5 decades it never happened , a very lopsided deal. We are now on a path that Joeys promise may never happen, not ever.
PS ; I still have my steel toed construction boots, required when I worked in the field on construction of CFs. Would they sell on EBay for 10 bucks?