Muskrat Falls: It’s Time For A New Plan

Emera may have a plan B that provides a much better deal for Nova Scotia. Bring it on!

On May 30, Nancy Tower, Chief Executive Officer of Emera Newfoundland and Labrador, made two statements that were both surprising and puzzling.

First, she asserted that rejection of the present proposal would signal that Nova Scotians don’t want the energy. That is not the reason that customer advocates have lined up against the proposal. The debate is about how much energy, and at what price.

Then she suggested that rejection could mean that a new link proposal would land in a different spot, possibly just over the border in New Brunswick. That would mean more than twice as much undersea cabling, and therefore would presumably be much more expensive. But that would not be Nova Scotia’s problem.

On the other hand, there would then be a 500 megawatt line carrying renewable energy just a few miles from our border. We could gladly help to pay for the short transmission cost and interconnection upgrade to have access to that energy.

The present Maritime Link proposal has Nova Scotia paying for an expensive Nova Scotia block of energy while providing New Brunswick and New England equal access to the inexpensive, market-priced surplus power.

Ms. Tower’s new idea would reverse that. We would have access to inexpensive surplus power without having to pay for the Link. The only power that we would buy would be what we need, when we need it. Those needs could be periodically re-evaluated in the light of new technologies for tidal energy, or for generation and storage of wind energy.

Of course this is all fantasy. No one is going to pay for an undersea link to New Brunswick from Newfoundland. Still, it seems an odd strategy to threaten us with a much better deal if the current one is rejected.

What is most interesting is that Ms. Tower did not argue that no link would be built if the present proposal is rejected. Newfoundland and Labrador’s long term ambition needs an outlet other than Quebec for its surplus energy.

That is why Emera and Nalcor, the Newfoundland and Labrador power utility, already have an agreement to try again if the present proposal is rejected.
Meanwhile, Premier Dexter tells us that he asked Premier Charest if Quebec would be interested in competing as a supplier of energy. Unfortunately Quebec was asked to match the specifications that were designed for Nalcor’s benefit rather than what Nova Scotia needs.

As a strategy, this seems designed to provide the least possible pressure on Nalcor to improve its offer, thus the UARB is clearly the only line of defence for customers. They should reject the present application and tell the proponents to try again.

The best alternative would have a properly managed competition for the right to supply us with energy.

If instead the UARB chooses to seek an acceptable version of the present proposal, a number of changes would be required:

  1. Nova Scotia’s obligation to purchase the power would not commence until the power is needed — probably 2020. If the proponents decide to build earlier, the cost of being early would be theirs.
  2. The cost to Nova Scotians would not include the 140 km of transmission on the island of Newfoundland from Bottom Brook to Cape Ray.
  3. The cost to Nova Scotians would not include assets implemented to facilitate transmission of Nalcor’s energy beyond Nova Scotia, and the risk that they would be underused.
  4. The fixed block of energy would be provided for the 50 year expected life of the Link, not 35 years. Any proposal to replace the last 15 years by earlier energy would have to be approved by the UARB as being equivalent in value and in the best interest of customers in the light of an updated assessment of Nova Scotia’s needs.
  5. Emera/Nalcor would commit to making the projected two terrawatt hours of inexpensive market-priced surplus energy available to Nova Scotia through the Link. In the alternative, Nova Scotia would be compensated proportionately to the extent that the energy is not provided through the Link, or is sold to other customers.

Many readers will be astonished that these provisions are not already there.

Emera has argued for various conditions in the proposal on the basis of the strategic benefit of access to market-priced energy to Nova Scotia. They never talk about the strategic advantages for Newfoundland and Labrador, which are far greater.

The proposal reads as if Newfoundland and Labrador is doing us a big favour by sending the energy through Nova Scotia. In fact, we are the only possible route to free Newfoundland and Labrador from dependency on Quebec.

A new proposal is needed, one that reflects Nova Scotia’s unique value, and is therefore much better for Nova Scotian customers.