We carry the freight for N.S.’s cheap power

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Dear Editor,

In his letter to the editor (“There are better options for power”, The Aurora, Dec. 9), Danny Dumaresque stated that the Newfoundland and Labrador Public Utilities Board (PUB) is “now being asked to set new rates starting Jan. 1, 2014, and for residential customers, this amount of power (170 megawatts) would cost $120 million per year.”

However, with respect to an equivalent 170 MW of export power to Nova Scotia, Nalcor’s Ed Martin is reported to have said that, “We’re going to be making a good return on that excess (MuskratFalls) power.”

According to Canada’s National Energy Board, for year 2012, an average equivalent amount of electrical energy (1.2 terrawatt hours) required to go to Nova Scotia every year would bring Nalcor $39 million in export revenue (a return that is more than three times less than the return that is now being requested from NL residential ratepayers), http://www.neb-one.gc.ca/clf-nsi/rnrgynfmtn/nrgyrprt/nrgyftr/2013/nrgftr2013-eng.html#s3_1.

If $39 million is a good return for sales to Nova Scotia, what would Mr. Martin call a return of $120 million from this province’s ratepayers — gouging?

Now in 2017, when Muskrat Falls comes on stream and the additional 50 to 100 per cent rate shock takes affect, Newfoundland and Labrador residential ratepayers will be paying, not three times more, but five or six times more than the so-called “good return” that Nalcor can expect from Nova Scotia. However, once Muskrat Falls comes on stream, this province’s ratepayers will not be paying for only 170 MW of Muskrat Falls power.

Newfoundland and Labrador ratepayers will pay for the entire 824 MW of rated output from Muskrat Falls — five times 170 MW, at $120 million per 170 MW — or $600 million per year. 

Now compare Nalcor's so-called “good return” of about $39 million in export revenues (zero cost to Nalcor) to the Muskrat Falls debt servicing and operating costs alone (an average of $300 million a year for 50 years that will be borne by this province’s ratepayers).

Now add to that the further $400 million a year that government has said will be revenues from Muskrat Falls over and above debt servicing and operating costs, and then ask, “Is $39 million a year in export revenues really a ‘good return’?”

Depends on your viewpoint.

While I understand that from where both the Newfoundland and Labrador government and Nalcor stand, a return of $39 million a year on export sales (in a rapidly diminishing export value market) may be seen as a “good return on excess power,” when the cost to Newfoundland and Labrador residential ratepayers could be as high as 10 to 15 times the value of export sales, the Muskrat Falls project (and the 24-year legal commitment to sell up to nearly 60 per cent of Muskrat Falls power to Nova Scotia for mere crumbs) gives considerable credence to the phrase that, “where you stand on an issue depends on where you sit.”

In Nova Scotia, their new government is promising new legislation that will offer Nova Scotians “greater choice among power providers (that) will allow local providers of renewable electricity to compete with Nova Scotia Power and sell directly to customers (and) compell regulated power companies to compete for your business ... a solution that puts Nova Scotians first.”

In Newfoundland and Labrador, our government and Nalcor (through Nalcor’s monopoly and this province’s ratepayer-paid-for high cost Muskrat Falls project and the locked-in, long-term deal with Nova Scotia) have given Nova Scotia the basis not only for low-cost rates for Nova Scotians but also a tremendous economic business advantage.

Through this new deal with Nova Scotia, Nalcor and the Newfoundland and Labrador government have laid the foundation for a leading-edge Nova Scotian renewable energy industry, while this province is tied for decades to a high-cost, non-competitive, monopolistic, 19th century-looking energy regime and placed this province’s ratepayers and businesses in an uneconomic, 50 year monopolistic yoke.

If where you stand on an issue depends on where you sit, then from this ratepayer’s perspective, where many Newfoundland and Labrador ratepayers will soon be sitting is in the dark.

Maurice E. Adams writes from Paradise

Organizations: Dear Editor, Newfoundland and Labrador Public Utilities Board, National Energy Board Nova Scotia Power

Geographic location: Nova Scotia, Newfoundland and Labrador, Muskrat Falls Canada Nova Scotians

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