There is no market for all the power that will be created, 40 per cent of which is supposed to be sold to places beyond Nova Scotia, preferably New England. According to experts, the difficulty is that New England, for the next decade at least, will have enough electricity and at a cheaper price than the 14.3 cents a kilowatt hour it costs Muskrat Falls to create electricity.
Another big concern is Quebec Hydro is developing the Romaine River, which is more than twice the size of Muskrat Falls, and will provide cheaper electricity to the marketplace.
The Nova Scotia power company Emera, by agreeing to build and maintain the under sea cable carrying all that power from Newfoundland to Nova Scotia at a cost of $1.2 billion, will be allowed to send 20 per cent of Muskrat Falls power at a firm price, below cost, to Nova Scotia for 35 years.
Why can’t Nalcor (the province’s power company) sell power to Nova Scotia the same way it will be sold to the people of Newfoundland? For the same reason we can’t sell to New England. The premier herself made this crystal clear speaking in the House of Assembly. “Mr. Speaker, Nova Scotia needs power. They need power and they can provide it to themselves for 10 cents a kilowatt hour. They are not going to buy it from us, Mr. Speaker, for 14.3, so we have to go into the market, and sell it at what the market can bear.”
The last 40 per cent of Muskrat Falls power will be sold to the people of Newfoundland. How much will it cost? The 14.3 cents a kilowatt hour is just the cost of producing the power and Nalcor by legislation has to make a profit. Therefore, the people of Newfoundland will be paying much more. Remember, all that cheap power going to Nova Scotia and elsewhere has to be subsidized. Who will be called upon to do that? None other than the taxpayers of Newfoundland.
The province has to borrow over $4 billion as its share of the project. That means the net debt for Newfoundland and Labrador will increase 50 per cent. The taxpayers of this province will have to bear that burden too.
Is the project going to go over budget? Of course it is. Big government contracts are famous for going over budget. Nalcor’s recent oil drilling project on the west coast had to be cut short because going over budget on two wells left nothing for the projected third. If you can’t keep a small project on budget how will you do on a huge project?
When the offshore oil runs out in twenty years the people of Newfoundland and Labrador will be left with; big electric bills, an enormous debt, a power plant that can’t pay for itself, no oil money to save us. But we will still be subsidizing cheap power to Nova Scotia, thanks to that 35-year agreement.
Maybe I have looked at the Muskrat Falls situation incorrectly and there is nothing but good things ahead. Maybe our three MHAs for central Newfoundland, Mr. Forsey, Mr. Hunter, and Ms. Sullivan, could break their vows of silence on this issue and point out how all the negatives about Muskrat Falls don’t really exist and why the premier of Nova Scotia is so happy about the deal.