Newfoundland and Labrador Premier Danny Williams seems to be the only one willing to talk openly about the possibility of Lower Churchill hydro electricity from Labrador landing in Nova Scotia via undersea cable.
Williams told the annual convention of his Progressive Conservative party on the weekend that the provincially owned Nalcor Energy was in talks with Emera about developing Lower Churchill in two phases — Muskrat Falls first, then the larger Gull Island phase.
Williams says the Muskrat Falls portion alone would be enough to eliminate the need to build a new generating station on the island of Newfoundland, with any excess power being sold to Nova Scotia and New England.
There is nothing new to the idea that negotiations are taking place between Nalcor and Emera. In January 2008, the two energy companies signed a memorandum of understanding to carry Lower Churchill electricity to Nova Scotia and the U.S. market.
The energy trading arm of Emera already sells a small amount of power from the original Upper Churchill hydro project on behalf of Newfoundland and Labrador.
But this time, Williams says he’s ready to announce a decision on the Nova Scotia option "sooner rather than later."
An Emera representative was reported to have indicated only that talks with Nalcor and NB Power are ongoing. Nalcor didn’t respond when contacted Monday. In an email, Murray Coolican, Nova Scotia’s deputy minister of energy, declined to comment on the status of discussions.
The fact that the federal government is expected to make some decisions on funding so-called gateway energy projects may be bringing this issue to a head. Williams confirmed on the weekend that the federal government will be asked to provide loan guarantees to assist in getting the project built.
It had been reported earlier that both Newfoundland and Labrador and Nova Scotia already asked Ottawa for $375 million from a federal fund for public-private projects.
One of the reasons the Nova Scotia option is on the table is the ongoing dispute the Newfoundland government has with Quebec over how it was treated for the original Churchill Falls power project.
"Imagine how exciting a day it would be if we could see that power avoid Quebec altogether," Williams was reported to have told his supporters during his speech.
If a deal is reached, Lower Churchill power would first have to be brought from Labrador onto the island part of Newfoundland, likely via undersea cable, and then by undersea cable to a landing point in Cape Breton.
The cost of building the cable from Newfoundland to Nova Scotia has been predicted to cost about $2 billion.
Negotiating an arrangement with Nova Scotia and Emera isn’t the least of the problems facing the Lower Churchill project. There is political opposition in Newfoundland by those who doubt whether it is possible to develop only half of the project and make money on it. Others question whether it is wise to bypass Quebec.
An agreement with the Innu of Labrador must also be ratified by the Innu before the Lower Churchill could be developed. There are some influential native leaders who fear building the Lower Churchill project will result in flooded burial grounds and the loss of traditional Innu hunting areas.
And that’s not all. The Quebec government took steps earlier this year to block Newfoundland and Labrador and Nova Scotia from gaining access to federal funds to help with the building of a Maritime transmission route.
Nova Scotia can’t count on Williams signing a deal for a Maritime transmission route just yet, either.
The Newfoundland premier seems to be leaving the door open to Quebec participating in the Lower Churchill if Quebec Hydro would agree to reasonable transmission rates.
On another note, the price of natural gas is calculated based on a per million British thermal unit measurement. The wrong measurement was used in a recent column.
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