The NEP lives. Here is a wonderful piece of reporting by Drew Hasselback of the National Post on how the federal government is subsidizing the financing for Muskrat Madness.
The most powerful line: “‘The benefit of the guarantee was that no one had to look at the merits of the underlying project,’ says Steve Halliday, managing director and head of global credit trading and distribution at TD.”
Shame on Harper and Flaherty. Muskrat Madness is likely to foment terrible interprovincial conflict when HQ presses its contractual rights to Upper Churchill. Nalcor’s Muskrat production plan relies on seizing a large chunk of winter power production from Upper Churchill. Hydro Quebec’s tight supply this winter highlights to value to HQ of its contractual rights in Upper Churchill.
In a story broken by researcher, blogger, and activist Brad Cabana, HQ is allowing its litigation with Newfoundland over the Upper Churchill to stretch out over time. Cabana showed up a whole bus load of professional journalist with this one. HQ has created a litigation version of an option agreement. Nalcor is only too willing to let the dispute slide off into the future, achieving short term pressure relief the for embattled NL PC government. Meanwhile, HQ will probably commercially advantaged if the whole matter comes to a head at a time when power prices are not quite so miserable. The upshot of Cabana’s discovery is that Nalcor keeps coming up with new ways to back-end load Muskrat Madness.
I notice that the NL Auditor General’s January 2014 report found total spending + commitments for Muskrat summed to $1.8 billion at the end of last fall. Official NL’s Muskrat Madness strategy is obviously to spend first and figure out the fundamentals later.
Same old story. Government guarantees are needed to attract investors to renewable energy projects. Removes the investors risks in these kinds of investments.
Taxpayers stuck with the bills if something goes wrong.
Time – World, Feb.1, 2014
“How Goldman Sachs Helped Tear Denmark’s Government Apart”
“The deal allows a group of investors headed by Goldman Sachs to buy an 18 percent stake of Dong Energy for $1.5 billion, as part of a broader restructuring that will cut the utility’s costs, reduce debt and increase energy investments, according to Bloomberg.”
http://world.time.com/2014/02/01/denmark-government-goldman-sachs
Alberta Investment Management Corp.
Board includes:
A. Charles Baillie, Managing Director at Goldman Sachs Private Equity Group
Andrea Rosen, Board of Emera Inc. and past employment with TD
http://investing.businessweek.com/research/stocks/private/board.asp?privcapId=28363594
Maine Biz, March 5, 2014
“Court nixes First Wind-Emera joint venture”
“The Maine Supreme Judicial Court ruled state regulators were wrong to approve a joint venture between electricity distributor Emera Maine and wind power developer First Wind.”
Website for above Emera article is:
http://www.mainebiz.biz/article/20140305/NEWS0101/140309987
Emera Inc., Halifax
Equity ownwership:
IG/GWL Dividend GIF 75/75 B, 7,137,692 shares
http://quote.morningstar.ca/Quicktakes/Stock/s_ca.aspxt=EMA
IG/GWL Dividend GIF 75/75 B is a fund of Power Financial Corp. thru its IGM/Investor Group
Nalcor Energy Board > Hydro Quebec officers > IGM Financial Board.
IGM Financial Inc. is a subsidiary of Power Financial Corp.
Can be tracked by using investing.businessweek.com records.
Nalcor Energy Ltd. Board includes:
Richard Cacchione, Hydro-Quebec
Marie-Jose Nadeau, Hydro-Quebec
http://investing.businessweek.com/research/stocks/private/board.asp?privcapId=58811976
Hydro-Quebec
Richard Cacchione, Pres. Hydro-Quebec Production
Marie-Jose Nadeau, Executive V.P.
Board includes: Michel Plessis, Vice Chair. Power Corp.Canada
http://investing.businessweek.com/research/stocks/private/board.asp?privcapId=873856
So are Nalcor and Hydro-Quebec suing themselves?
I think that Mr. Cacchione and Ms. Nadeau are members of the CF(L)Co board, not the Nalcor board.
Business Week also says that Richard Cacchione and Marie-Jose Nadeau are Directors at Churchill Falls, at Nalcor Energy Ltd.
Churchill Falls (Labrador) Corp. Ltd.
Board includes:
Dean MacDonald, Tuckamore Capital Management Inc.
http://investing.businessweek.com/research/stocks/private/board.asp?privcapId=879728
Tuckamore Capital Management, Toronto
Dean MacDonald, Pres. & CEO
http://investing.businessweek.com/research/stocks/people/board.asp?ticker=NWPIF
Nalcor Operations
Board includes:
Richard Cacchione, Hydro-Quebec
Marie-Jose Nadeau, Hydro-Quebec
http://www.nalcorenergy.com/churchill-falls-board-of-directors.asp
Canadian Electricity Association
Nalcor Energy subsidiaries:
Newfoundland and Labrador Hydro
Churchill Falls (Labrador) Corp. Ltd.
http://www.electricity.ca/membership-list/corporate-utilities-members/nalcor-energy.php
Appears something is cooking here.
Globe And Mail
Fund Profile: IG/GWL Dividend GIF 75/75 B
Investors Group
http://globefunddb.theglobeandmail.com/gishome/plsql/igf.fund_pro?fundname=IG%2FGWL+Dividend+GIF+75%2F75+B&pi_universe=IGF_FUNDS
Emera Inc., Halifax
Morningstar
Funds Equity:
TD Asset Management Inc., 2,813,334 shares
BlackRock Asset Management,Toronto, 2,784,941 shares
RBC Global Asset Management, 2,238,131 shares
http://quote.morningstar.ca/Quicktakes/Stock/s_ca.aspx?t=EMA
Power Financial Corp.
Senior Management includes:
Paul Desmarais, Jr.
Andre Desmarais
http://www.powerfinancial.com/en/governance/senior-management
Power Financial Corp. Board includes:
V.Peter Harder also on the Board of Northland Power
http://www.powerfinancial.com/en/governance/board-directors
MOODY’S, Dec.5, 2013
Moodys assigns Aaa rating to approximately C$5.0 billion of debt to be issued by Muskrat Falls/Labrador Transmission Assets Funding Trust- and Island Link Funding Trust; stable outlook
“We note that the payment under the Canada Guarantee are payable out of the Consolidated Resource Revenue Fund of Canada without further authorization by the Canadian Parliament.”
http://www.moodys.com/research/Moodys-assigns-Aaa-ratings-to-approximately-C50-billion-of-debt–PR_287416
Wikipedia
Consolidated Revenue Fund of Canada
Payments to and from the Consolidated Revenue Fund of Canada are made by the Receiver General. Currently the Hon. Diane Finley.
“The Receiver General by convention, however, never exercises any degree of descretion over payments to or from the Consolidated Revenue Fund, other than by following whatever directions might exist in relevant statutes and regulations.”
So does this mean that all that is needed is a statute or regulation to obtain funds from the Consolidated Revenue Fund Canada? Does anyone know?
http://en.wikipedia.org/wiki/Consolidated_Revenue_Fund_of_Canada
BlackRock Asset Management Canada, Ltd., Toronto
Noel Archard, CEO
Also executive with BlackRock Inc., New York City
Firm has 2,784,941 shares of Emera Inc.
http://investing.businessweek.com/research/stocks/private/people.asp?privcapId=4863051
BlackRock Inc., New York City
Lawrence Fink, Chair. & CEO > Lloyd C. Blankfein, Goldman Sachs, The Partnership For New York City
Thomas Montag, Board > C. Douglas Fudge, Goldman Sachs, GS Financial Products U.S., LP
http://investing.businessweek.com/research/stocks/people/people.asp?ticker=BLK
According to a Financial Post Jan.31, 2014 article:
“Drew Hasselback: Federal guarantee gives Lower Churchill financing a sovereign touch”
TD Securities and Goldman Sachs are C0-Underwriters.
And from other financial sources and not from the above article:
TD Asset Management Inc. owns 2,813,334 shares of Emera Inc.
Quanta Services, Dec. 18, 2013
Quanta Services Inc. announced that Valard Construction, a Quants Services company, was selected to install transmission infrastructure for Nalcor Energy’s Muskrat Falls project.
Muskrat Falls project including transmission lines will facilitate the delivery of electricity to the Maritimes and the Northeastern U.S.
Quanta Services Inc. Board includes:
Patrick Wood lll who is also on the Board of First Wind Holdings, Boston.
http://investing.businessweek.com/research/stocks/people/board.asp?ticker=PWR
Emera Inc. and First Wind Holdings are in a JV in Northeast Wind Partners. Emera owning 49% of this company.
Puts Emera Inc. and First Wind Holdings in business togther.
Could raise some questions
New Foundland Labrador
Natural Resources, July 31, 2012
“The Maritime Link will allow us to access the Maritimes and New England markets and thereby gaining a fair and competitive price for our clean, renewable power”
http://www.releases.gov.nl.ca/releases/2012/nr/0731n01.htm
This project will allow electricity to be furnished to the U.S.
Emera Inc. aquired two Maine transmission companies which were later merged to create Emera Maine which can carry power all the way from the New Brunswick line to the Mass. state line.
Emera Inc. owns some 50 million shares of Algonquin Power or just under 25% of Algonquin.
CBC News, June 18, 2012
Dunderdale calls Nalcor board questions ‘offensive’
“Experts question qualifications of appointees to Crown energy corporation”
http://www.cbc.ca/news/canada/newfoundland-labrador/dunderdale-calls-nalcor-board-questions-offensive-1.1190764
Public Private Partnerships/PPP/P3s
The federal government solidified its support of P3s with the creation of Canadian Council for Public-Private Partnerships,1993, with representatives from both the public and private sector.
P3s have been used in Europe for a number of years to finance various projects.
A common problem with P3 projects is that private investors obtain a rate of return that is higher than the government’s bond rate even though most or all of the income risk associated with a project is borne by the public sector.
The Canadian Council for Public-Private Partnership
Board includes:
Johanne Mullen, Partner, PwC, Montreal
Has advised on some of Canada’s defining capital projects including financing for Nalcor Energy.
http://www.pppcouncil.ca/about-ccppp/governance/board.html
Midwest Energy Efficiency Alliance
“A shared vision for energy efficiency”
Board of Directors (FY 2014)
Randy Gunn, Navigant Consulting
http://mwalliance.org/about-meea/board
Midwest Energy Efficiency Alliance
Board includes:
Randy Gunn, Managing Director, Navigant Consulting, Chicago
http://investing.businessweek.com/research/stocks/private/board.asp?privcapId=100592228
Navigant Consulting Inc., Chicago
Overview:
http://investing.businessweek.com/research/stocks/people/people.asp?ticker=NCI
American Council for an Energy Efficient Economy/ACEEE
Sources of funding 2012-2013 include:
Navigant Consulting
http://aceee.org/about/funding
Virgin American, Inc., Burlingame, CA
Board includes:
Donald J. Carty, O.C., Brinker International Inc.
Samuel Skinner, LTV & Navigant Consulting Inc. Board
http://investing.businessweek.com/research/stocks/private/board.asp?privcapId=10878429
Georgetown Climate Center, Oct.10,2012
“Illinois Clean Energy and Economic Development Polices”
Navigant Consulting, Illinois jobs report & AWEA
http://www.georgetownclimate.org/tags/clean-energy
Metalmark Capital, LLC, New York City
Board includes:
William Stavropoulos, Boards of CA Technologies & Dow Corning
Samuel Skinner, LTV Corp. & Navigant Consulting Inc.
http://investing.businessweek.com/research/stocks/private/board.asp?privcapId=21915
EDC, May 30,2014
“EDC helping SMEs finance their contracts with Muskrat Falls project”
“EDC recently concluded a review of the Muskrat Falls project that confirmed that the level of production destined for international export markets meets EDC’s exporting criteria, opening up its financial services to all of the Canadian suppliers of Muskrat Falls.”
http://www.edc.ca/About-Us/News-Room/News-Releases/Pages/muskrat-falls.aspx
Green Giraffe, Paris
U.S. Department of Energy, 2012
“GGEB was mandated in 2012 as part of a consortium led by Navigant to prepare studies on the economics of the offshore wind market, and provided market intelligence on the sector, financing trends.”
Links to PDFs
Full offshore wind market and economic analysis
Full US offshore wind supply chain and manufacturing report
http://www.green-giraffe.eu/projects/department-energy#detail
WindPower Monthly, Sept.29, 2011
“The 20 most influential people in wind power today”
# 19, Jerome Guillet, GGEB/Green Giraffe
“,Guillet is behind most large-scale offshore-wind financing deals.”
http://www.windpowermonthly.com/article/1096118/20-influential-people-in-wind-power-today
Ottawa Business Journal, March 18, 2013
“When the levee breaks”
“So if Nalcor doesn’t build a whole new dam at Muskrat Falls (at whatever the astronomical cost) at lands like the so-called North Spur (a long bank of “dangerous” clay that must otherwise hold back the entire load of the reservoir) could collapse anytime after the valley is flooded-sending a wall of water to threaten anyone living downstream.
http://www.obj.ca/Opinion/Columnists/2013-03-18/article-3201671/When-the-levee-breaks/1
The Western Star, Corner Brook, June 27, 2014
“Muskrat Falls Costs Jump by $800M”
Cost of project is now $6.99 billion not including the $1.5 billion Maritime Link.
http://www.thewesternstar.com/News/Local/2014-06-27/article-3778428/Muskrat-Falls-costs-jump-by-$800M/1
GLADEGOOD, July 19-20, 2014
“Proposed transmission projects aim to tap Canadian hydroelectricity”
Use the link to the Boston Globe for the rest of the article in the Boston Globe.
At least 5 major transmission projects, some costing more than $1 billion, to connect New England to plentiful power to the north including Canada.
http://www.gradegood.com/proposed-transmission-projects-aim-to-tap-canadian-hydroelectricity
Google to get a direct link to this article in the Globe
The Chronicle Herald, Halifax, May 9, 2014
“Taylor: Emera looking to power New England”
Dina Seely: “There are transmission rights associated with out Bayside power plant in Saint John that would allow energy from Muskrat Falls to move through (New Brunswick) into New England,” she said.
http://www.thechronicleherald.ca/business/1206545-taylor-emera-looking-to-power-new-england
Northeast Energy Link, underground line, 230 miles, from Orrington, Maine to Tewksbury, Mass.
Emera Maine/Emera, National Grid partnership. The parent company of National Grid, Waltham,Mass., is National Grid, plc, U.K.
Has map of proposed project.
http://www.northeastenergylink.com
New York State Energy And Development Authority
Board includes:
Richard Kauffman, Goldman Sachs Group, Inc.
Kenneth Daly, National Grid plc, Pres. New York operations.
Jigar Shah, Inerjys Ventures, Inc. and on the Board of Greenpeace USA.
http://investing.businessweek.com/research/stocks/private/board.asp?privcapId=4260528
MaineBiz Daily, July 23,2014
“First Wind Emera’s 333M venture ok’d by PUC”
The Ontario-based Algonquin Power & Utilities Corp. would also have a stake in the Maine First Wind projects.
Follow the link in this news item to the story in the Bangor Daily News.
http://www.mainebiz.biz/article/20140723/NEWS0101/140729975
Bangor Daily news, Nov. 18, 2014
First Wind sale means end of $333 million partnership with Emera
Nova Scotia-based Emera has sold its interest in a $333 million joint venture with First Wind.
Emera also announced that it has agreed to sell its interest in North East Wind Partners back to First Wind for $223 million.
“The deal would end a legal challenge to that Partnership, …”
http://www.bangordailynews.com/2014/11/18/business/first-wind-sale-means-end-of-partnership-with-emera/?ref=regionstate
SEDAR Filing
Annual Information Form, Year Ended Dec.31, 2014 & filed March 12, 2015
Bird Construction Inc, Mississauga, ON
P.4 Inter Company Relationships – Chart
Bird Construction Inc. > Bird Construction Co. Ltd. > H.J. O’Connell Ltd. > IKC-One JV 40% in Muskrat Falls Hydroelectric Project.
http://www.sedar.com