Radio Podcast: VOCM Radio, Newfoundland, April 16, re. Muskrat Falls

I was a guest of Paddy Daly’s on his show Back Talk (2-4 pm Newfoundland Island Time) on the VOCM radio network on April 16.

We discussed the Labrador power and transmission megaproject proposed for Muskrat Falls on the Lower Churchill River. I recapped the reasons for my concern that Nalcor has overestimated the useful production it can get from Muskrat Falls by failing to establish an agreement with Hydro Quebec to use the storage and generation resources Quebec controls at Upper Churchill. I also explained why the unusual financing and rate recovery model that Nalcor proposes for the project will make the project appear more cost-effective in its early years than it really is, while transferring a large financial liability to ratepayers many decades in the future. I also discussed a simple rate redesign concept commonly used by other utilities which would help reduce the need for very costly oil-fired generation. One element of the interview that was new to readers following my analysis of Muskrat Falls is that I pointed out the similarities between the costly off-fossil fuels policies in ON, NS, and NL.

During a hot debate on April 6th between Mr. Daley and a representative of the Sierra Club, Mr. Bruno Marcocchio, who was questioning the justification for Muskrat Falls, Mr. Marcocchio endorsed my analysis of the intergenerational unfairness that would result from Newfoundland government’s financing and rate plan for the project. Mr. Daley claimed that my work has been “brought into question” related to the “things he (Tom Adams) has said and done with other projects” and “he (Tom Adams) has been proven dead wrong”.

A podcast of the interview is here:Adams interview on VOCM Radio, TalkBack with Paddy Daly, April 16 re. Muskrat Falls

Nalcor issued this tweet immediately after the interview: “Nalcor has an enforceable Water Management Agreement in place for the Churchill River established by the PUB.” The Water Management Agreement Nalcor is referring to here is with its affiliate Churchill Falls (Labrador) Corporation.

Nalcor’s deal with its affiliate CF(L)Co is irrelevant. Until HQ has agreed, Nalcor has zip. Here is why.

Here is Nalcor’s claim that the provincial Water Management Agreement allows it to use the Upper Churchill reservoir and generation facilities to deliver energy to the Island during peak winter demand periods. Note that this explanation for Nalcor’s production plans were adduced into evidence only after final submissions were submitted to the panel.

Here is Hydro Quebec’s statement that its rights to Upper Churchill are unaffected by the Water Management Agreement.

An acknowledgement from Hydro Quebec that it agrees with Nalcor’s planned use of Upper Churchill for use to deliver power during the winter peak to the Island would resolve my dispute with Nalcor on this point.