Dear Mr. Martin,

Yesterday you wrote to me, starting your letter with the following:

Your blog displays a clear lack of understanding of the Lower Churchill Project, including the Muskrat Falls Development. I’m compelled to correct the statements made by you, and request the prompt apology you said you would make if your arguments were wrong.

Your letter continued:

Contrary to your statement that “Nalcor has vastly overstated the usable output from Muskrat Falls,” Muskrat Falls will generate 4.9 terawatt hours of energy per year. This analysis is based on several studies completed by reputable engineering consultants. It’s not based on an average water flow study as stated in your blog.

Your letter directed me to get an explanation for your assertions about the production benefits of Muskrat Falls by reviewing the Water Management Agreement.

Please correct me if I am wrong, but I don’t believe that your direction to the Water Management Agreement is revealing of your basis for claiming that Muskrat Falls will generated 4.9 TWh — the very foundation stone of your case.

If we instead look to Exhibit 19, the Muskrat Falls Feasibility Study, we see a reference to the Acres International Ltd., (1998), “Churchill River Complex – Optimization Study” as the source for your 4.9 TWh claim. We see in abridged exhibit CE-27 Rev. 1 dated June 9, 2011, after the Water Management Agreement was finalized, the following:

“A study by Acres International Limited in 1998 resulted in a report titled “˜Churchill River Complex, Power and Energy Modeling Study’, dated July 1998, which provided the basis for the average and firm energy production values that have been most often used for the Muskrat Falls development.”

When we look to Exhibit CE-28 Rev. 1, we find the Acres power and energy modeling study that Nalcor has used for all the production estimates for the current Muskrat Falls development now under review. If we look to the objects that your consultants used to guide their work at page 12 of 166 under section 1.2, we see there that the purpose of the study you have relied upon was to “provide a post-processor for determining the available energy for sale at the Québec-Labrador border taking into account Island infeed and Labrador loads and transmission losses to the border”. If we look further through that study, we see at section 6.1 the transmission configuration used. There we see that the primary transmission connection for the Muskrat Falls generator in the study is not to the island of Newfoundland and south to Nova Scotia, which is the basis for my concern as expressed in my post “Stop Muskrat Falls” to which you were objecting. Instead, we see that the transmission connections studied were primarily connected to an unconstrained interface at the Quebec/Labrador border with no Nova Scotia connection. If we look to Table 6.3 on page 62 of 116, we see there that all of the power is assumed to be delivered to Quebec.

Please correct me if I am wrong, but it appears that Nalcor took a study that estimated the energy production available from Muskrat Falls as delivered to an unconstrained interface at the Quebec/Labrador border and applied those study results to the Integrated Island/Nova Scotia system instead. Since the constraints of the Integrated Island/Nova Scotia system bear heavily on the potential output of Muskrat Falls, I believe that there is no basis for you to assert that Muskrat Falls will ever generate close to 4.9 TWh given the system you are now seeking approval for.

Sincerely,

Tom Adams