Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.

Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Friday, January 17, 2014

Nalcor and Hydro-Quebec's "Management Order" over the Upper Churchill

For the last few months I've been awaiting the hearing in Quebec Superior Court, between Nalcor and Hydro-Quebec, over recall rights and management of the Upper Churchill dam. The hearing was scheduled for January 20, 2014. Subsequently, it came to my attention the hearing had been put off. I was quite interested by this change as the french girl repeated the date of the hearing twice to me on the phone - so January 20th was a firm date.

I contacted the Superior Court registry in Montreal requesting clarification. The man on the other end was adamant there was no longer a hearing scheduled for the 20th, and said there was very little on the file - except one thing. That one thing was an "Ordannance De Gestion" - english translation: " Management Order". I was set back by this for a few reasons. First, at the time, I wasn't quite sure what a "Management Order" was. Second, I wasn't aware of any hearing or the like since the suit was first filed by Hydro-Quebec. The gentleman at the Superior Court would give no details though, other than to speak to Nalcor's (Strikeman Elliot) or Hydro-Quebec's (Norton Rose Fulbright Canada) lawyers.

Luckily, I knew how to order a copy of the order and did so. I tweeted Nalcor and the provincial government asking for a copy. No reply. Then today I sent another request, even though it was ordered, on twitter and copied in a local journalist. Nalcor came back with "we sent you a tweet two days ago", which of course, they didn't. Apparently, our world class people at Nalcor do not understand that every tweet they send is logged in their tweet record. In any case, they did dutifully send me a copy by email this evening - my $6.50 down the drain for my Quebec copy.

The nuts and bolts of the "Management Order" is an agreed upon approach by Nalcor and Hydro-Quebec to manage their proceedings - an agenda if you will. We might call it a case management order. Anyway, there are a few, very important details regarding this order.

The first detail that comes to mind is why is this order not public? Why was their no press release from Nalcor or the government? This court case has been prevalent on the minds of many in the province given past experiences with Hydro-Quebec and courts. It also shows the two utilities, through their lawyers, could actually come to an agreement - even if it is just how one is going to sue the other. After all, the order was given on October 3, 2013 by Chief Justice Francois Rolland of the Quebec Superior Court. That is three and a half months ago. Not a word from the government or Nalcor. Remember that.

The second, and by far more serious detail, is the length of time detailed in this agreed upon path. It begins on July 22, 2013 with the launch of Hydro-Quebec's suit, and ends on August 7, 2015. Yes that's 2015, and it's not a typo. That is the schedule. During this time the plan outlines exchanging of documents, examinations and all that type of legal stuff. That is not the end of it though. Really, that's just the beginning. Then it goes to the Quebec Superior Court for the actual hearing, then it likely gets appealed to the Quebec Appeals Court, and then likely to the Supreme Court of Canada. Realistically, it might not be fully resolved through the courts until 2018.

That should really shock a lot of people in the province of Newfoundland and Labrador. What it effectively means is Hydro-Quebec has covered its interests at the Upper Churchill. It has legally filed its opposition to the taking of power over the 300 MW allotted by the Power Contract. Its has also legally filed its opposition to Nalcor ignoring Hydro-Quebec's right to have the plant managed according to its needs, not Nalcor's, which again is enshrined in the Power Contract. So Hydro-Quebec is covered. It doesn't need all the power the Upper Churchill uses anyway given its surplus of wasted power over the last few years is as mush as all the power produced at Churchill Falls. Essentially, it can now sit back and watch as Nalcor continues to take power, manage the facility, break the Power Contract, all based on Williams' water management agreement, and then reap huge damages that will bankrupt CFLCo. It's almost been made too easy for Hydro-Quebec.

But I don't care about Hydro-Quebec. I care about Newfoundland and Labrador. It's a hard place to be right now, watching it all go down. One government bound and determined to build its gallows. Another watching with glee. How much better can Hydro-Quebec get it than being awarded costs for power taken that they can't even sell on the market? Now that is ironic.

If there is any sense of pride, or even just plain old self-preservation, the people in this province better stand up and fast. Only a complete and utter fool could build a dam that he can not run at more than 20%. Mind you, Napoleon decimated his once proud army in the vast Russian countryside. Hitler did the same. The Romans got too over extended. But, I am not aware that any of them did it purposely with full knowledge that they were driving their own into the ground. That's not the case here. Williams and Dunderdale had and have, before them, all the information not to make such a tragic and frankly stupid decision. Yet they did. Nalcor's hiding of the fact that while they build Muskrat Falls the very court case that will undermine it's use has been established - with their agreement. Kept from the people. The people being led like lambs to the slaughter - quietly.

Here is the order, the agenda is in French and English:


  1. Awesome sleuthing, Brad. You have showed up a whole bus load of professional journalist with this one. HQ has created a litigation version of an option agreement. Nalcor is only too willing to let the dispute slide off into the future, achieving short term pressure release for Ms. Dunderdale. Meanwhile, HQ would be much better off it the whole matter came to a head at a time when power prices are not quite so miserable. Nalcor keeps coming up with new ways to back-end load Muskrat Madness. I notice that the NL AG's report found total spending + commitments for Muskrat summed to $1.8 billion at the end of last fall. NL's strategy is obviously to spend first and figure out the fundamentals later.

  2. Thank-you Tom. High praise from a top gun. It is a story that defies all logic, and common sense for the people of this province.

  3. It sure looks that way - unfortunately


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