Harper Resurrects National Energy Program to Subsidize Muskrat Madness

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.


  1. 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.

  2. 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.”

  3. Emera Inc., Halifax
    Equity ownwership:
    IG/GWL Dividend GIF 75/75 B, 7,137,692 shares

    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.

  4. 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.”

  5. 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?


  6. 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.

  7. 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.

  8. 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.

  9. 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.

  10. 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

  11. 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.

  12. 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, …”


  13. 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.


Comments are closed.