What is Muskrat Power Going to Cost?

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  • The remaining power which will be available to NS, NB, and PEI at market prices is really not something that anyone can count on. It may be available, or maybe not. It may be cheaper, or maybe not. I expect market prices to continually escalate. In terms of Nova Scotia’s future need for the power, to the extent that it is surplus to our needs, it can be used to reduce Nova Scotia Power’s use of thermaI generated power.

    Jim Breeze | January 20, 2013 | Reply

  • Jim thanks for your letter.
    At least initially Newfoundland will have 500Mw of power for which they have no use. Of that 170 Mw ( 154 after transmission leakage) is provided to Nova Scotia for 35 years in exchange for a contribution to the capital cost of the project, currently estimated at $1.52 billon. We do not yet know what that will translate into as a price but I am fairly sure it will look expensive. Newfoundland will be able to transmit the remaining power through the Maritime Link and sell it at market prices. Nova Scotia will have the option to buy it as will NB or PEI. The price available was estimated by the Dalton report. It is currently much lower than we will see for the initial block.
    I agree with you that it will be best if we and Newfoundland can find a way equitably cooperate . But it does not feel to me that the right balance has been struck. We don’t need that much power in 2017and may not until the middle of the next decade. The price on the initial block is high. We do have alternatives.
    Cost is not the issue. Value is.

    bill black | January 20, 2013 | Reply

  • I enjoyed your article on getting a better Muskrat Falls Deal.
    Your article does not describe the source of the second block – the “valuable option” that would meet 16 per cent of our power requirements. You mention it’s based on prices in New England but where is it coming from and how much would it cost. How do you know the prices in New England will not be higher than the cost of the Muskrat Falls power in 20, 30, or 40 years?
    Bill, this proposed deal with Newfoundland is all about cooperation between two provinces so that both can benefit. It’s not about it being a “huge win for Newfoundland”. Newfoundland wants to build a project that it cannot afford to build on its own. Nova Scotia needs power that is cannot generate on its own. By combining forces, both help the other achieve what they need. You know that. And any kind of project like this requires long term commitment by both parties. It’s all about financing and getting the project to work. We can’t just put our heads in the sand and “play it by ear” – see what’s going to happen in 10 or 20 years. That’s being short sighted, akin to gambling, and irresponsible. Securing a constant source of power at a stable price will require a commitment, and all commitments have risks. That’s the name of the game. No risk, no deal.
    And we’re not New Brunswick or PEI – we’re Nova Scotia. We can only negotiate with what is available. What’s the use of imagining if Danny Williams or Jim Irving was negotiating for Nova Scotia, the deal being considered is based on the cost of Muskrat Falls and the transmission lines.
    Me thinks you’re just playing politics with this very important project. It’s very easy to throw darts at this project, but I don’t hear any realistic, responsible alternatives.

    Jim Breeze | January 20, 2013 | Reply

  • It is widely held that you get what you pay for, whether it is a consultants report or a piece of equipment. In this case, as anyone with consulting experience could tell you, a $100,000 report is chump change when it comes to analyzing a complex subject with several possible options like energy supply. Since the Terms of Reference have never been released, one can only assume that the analysis was intentionally limited to a cursory overview of a couple options – hence the minimal fee for the report. It would therefore be useful to have Hydro Quebec be an intervenor so that some hard, realistic questions can be asked that won’t otherwise be heard.

    To commit to a 35 yr. agreement, we need a lot more realistic assessment than produced so far, and any decision cannot be based on political expediency. Otherwise, it courts disaster for us.

    johno | January 19, 2013 | Reply

    • John I am not sure I agree with you. I believe the mandate was reasonable. The report will be a small part of a large package that will be subject to scrutiny at the UARB. One can criticize it as an effort in public relations but it is much more accessible than the volumes of material that will be presented to the UARB. I found it and the opportunity to query Mr. Dalton very helpful.

      Bill | January 19, 2013 | Reply

  • this is a well reasoned point of view. I personally hope that Muskrat Falls is eventually proven to be the right way to go. I don’t know that now, but I lean towards it. I liek the idea of working with Newfoundkland and Labrador and not Quebec, because any deal with the latter would be in jeopardy should it separate from Canada. Secondly hydro is the cleanest reasonable power from an evironmental perspective. Wind power suffers from NIMBY, natural gas pipelines in communities blow up from time with very bad results–I don’t want it in any place I live or work. Also I note, that the cirrent natural gas company operating in N.S. had had trouble reaching its goals because residential folks don’t want it. Tidal power, I’ll believe when It actually comes ot pass–I supect the tides of Fundy are too strong for even today’s modern turbines–and that seems to be what the companies invovled in it seem to be concluding. I point it’s nto only Dexter and Co that want Muskrat Falls, but also Harper and Co. I think we have to trust the Utility and Review Board, an organization in which I, unlike some others, have real confidence to make the right decision.

    Rob Smith | January 18, 2013 | Reply

  • In the business world a report with the shortfalls apparent in this one would or should result in a rejection of its conclusions. .
    All sources and combinations of power should be on the table together with a best effort to estimate our future need.
    We should be privy to the terms of reference,the qualifications of those providing input and all subject to peer review.
    It should not be framed to achive the results or desires of any one person or political party particularly one losing public support and senior siting members.
    If Dexter is prepared to sacrifice us on the altar of alternate energy then he should make it a condition or deal breaker of his continued governance and call an election on this issue.
    Up or down.

    Bill | January 18, 2013 | Reply