PUB - Reshuffling the Cards

The Public Utilities Board (PUB) handed the Newfoundland government its long awaited decision on Muskrat Falls at 8:00 pm Friday night. The decision read as follows:

“The board concludes that the information provided by Nalcor in the review is not detailed, complete or current enough to determine whether the interconnected option (including the Lower Churchill development) represents the least-cost option for the supply of power to island interconnected customers over the period of 2011-2067, as compared to the isolated island option.”

The PC government, in a near state of shock, revealed the decision to the rest of the province this morning. After the expenditure of $2 million dollars of public money on the exercise, and nearly a billion dollars on preparation for the Muskrat Falls project in general, the PUB concluded it could not render a decision one way or the other.

The non-decision is shocking in a number of ways. Firstly, the PUB 's four commissioners are appointed by the Newfoundland and Labrador government. In this province that translates into obedience. Anything less is a guaranteed ticket out of the graces of the government and, in a small province like Newfoundland and Labrador, out of the circles of influence and money. The province is therefore not accustomed to decisions made on principle and honesty. Party line is so strictly enforced one could be forgiven for thinking that anything involving the government more resembles a banana republic like Cuba than a democratic province in Canada. Such is the feudal nature of politics in this province.

Secondly, the PUB ignored the government's agenda, and carefully orchestrated timeline, to render a decision based on common sense. Anyone who actually watched the PUB hearings would have witnessed Nalcor officials constantly trying to portray half truths and unsubstantiated commentary as truths that could be projected 50 years into the future. I for one found myself questioning: Why not wait for the Decision Gate 3 numbers to bring this before the Board? Decision Gate 3 would at least bring the estimates for the project into the plus/ minus 20-30 percent range. As it was, the government was trying to force the PUB to give a favourable decision based on project definition of 5-10 percent. In other words, project guesswork and give it a green light. Something the PUB found itself uncomfortable doing - to their credit.

Finally, the PUB refused to accept its own expert's opinion. Manitoba Hydro International (MHI) was hired by the PUB to go over the project, and endorse either Muskrat Falls or the Isolated Island Option. MHI picked Muskrat Falls as the least cost alternative, but with many caveats. The PUB essentially questioned the validity of many of Nalcor's practices and projections, which MHI had based all of its advice on. Of course, all studies of Muskrat Falls have been based on Nalcor's numbers, which has severely limited the accuracy of some components of the project. The most glaring this author is aware of is the demographic projection for the province's future. Nalcor simply accepted the Department of Finance's rosy demographic projections despite the fact they are deeply flawed. There was not one independent or scholarly demographic study of Newfoundland's population submitted to the PUB hearings - a point that I brought to the PUB's attention in my submission. Given that Newfoundland and Labrador Power estimates 50% of all sales are residential, an independent and logical population projection is really a no-brainer. The old saying goes: when people see one thing wrong they begin looking around for others. In the case of Muskrat Falls nothing could be closer to the truth.

So, after being caught not being able to win approval from a Board where the fix was supposed to be in, Premier Dunderdale and her Natural Resources Minister Jerome Kennedy have been forced to do that which which they had both refused to do until now - grant a special debate on Muskrat Falls. As recent as 10 days ago Kennedy stated:
 “The problem right now is that I’m not sure these opposition parties are going to provide quality debate on anything,”
He went on to say the Opposition could use the 30 minutes a day they get for Question Period to raise concerns over Muskrat Falls. If that wasn't enough he suggested they use their time allotted to scrutinize the provincial budget for questions on the project. Anything, but give them a special debate on Muskrat Falls. Today, after being caught with his proverbial pants around the ankles, Kennedy came out with:

“Members opposite have been demanding a debate. Your request is now being accommodated.”

He, and the government, did not grant this concession to the Opposition out of a sudden conversion to the principles of democracy. They granted it in a cynical attempt to blunt criticism over the failed $2 million dollar PUB non-decision. The sad reality is that a special debate in the House of Assembly is ultimately controlled by the government and its majority, and is therefore doomed to be an exercise in futility. An exercise in democracy to be sure, but one that is controlled by those that want to see Muskrat Falls go ahead.

The second face saving grace announced today was a new study of natural gas and other potential options. Opposition groups have been demanding this for some time. Just last week, Dr Bruneau of Memorial University, declared there was enough natural gas deposited off Newfoundland and Labrador's shores to satisfy all the provinces power needs for some time. Minister Kennedy announced today that Ziff Energy from Calgary would conduct the "independent" review of natural gas as an option. However, the Minister's own words from Hansard on the 6th of March, 2012 cast some question on that impartiality:


MR. KENNEDY:
Mr. Speaker, I say to the Leader of the Opposition: What other options is he talking about? Refurbished Holyrood is the best of the other options, Mr. Speaker, with small hydro and wind. Manitoba Hydro International clearly concluded that there is so much wind that can be used, but it has to be integrated into the system.

We have looked at natural gas, Mr. Speaker, extensively. In fact, I can say to the Leader of the Opposition, I met with Ziff Energy out of Calgary on the weekend while in Toronto on another matter. They concluded, clearly, that the importation of gas from the United States is not economically feasible. Mr. Speaker, we know, clearly, that the building of a pipeline from the Grand Banks is not feasible. If the Leader of the Opposition has other options, I would like to know what they are.

An obvious questions posed from this honourable mention is what matters was the Minister discussing with Ziff Energy that were unrelated? Does the government or Nalcor already have any commercial ties with this company? What does the importation of natural gas from the US have to do with this province, and is Ziff Energy inclined to the use of natural gas? The Minister's statement doesn't give that impression.

As if to reinforce that notion that the government has a preexisting relationship with Ziff Energy, and that Ziff's mind may already be made up on the natural gas option, check out Ms. Dunderdale's comments to the House of Assembly on the 15th of March, 2012:

"The world is full of expertise. The Leader of the Third Party could get herself to Brazil to investigate how Vale Inco operates in Brazil; surely, God, you could contact Wood MacKenzie, or Ziff Energy, or PIRA – internationally renowned experts in the energy field – and ask a few questions. I am sure that they would give you the same answers that they have given us, and that the minister gives you day after day that are available to you on Nalcor’s Web site, on the PUB’s Web site."

"I am sure they would give you the same answers they have given us." The Premier's own words are damning. These aren't a new, cold set of eyes on the options. This is a company that already is in line with the government's point of view, and Ms Dunderdale plans on putting it out there as yet a new piece of evidence to back up her plan for Muskrat Falls.

Bottom line, the Dunderdale PC government is reshuffling the cards. They are taking away any future influence the PUB could have over this project by not returning the matter to the PUB with new guidelines and a new time frame. The Premier even went as far as to attack the Chair of the PUB for "sending negative messages", because he wanted information that Nalcor, in his opinion, was denying. Dunderdale blamed him, and the PUB, for wasting $2 million tax payers dollars by not rendering a decision. Of course she fails to understand accountability, and the fact that it was her government that established the narrow rules that put the PUB in the position of not reaching a decision in the first place.

What we are left with is a government, a junta, that is without conscience re engineering its own fixed process to have Muskrat Falls "sanctioned" at all costs. It has become a comical public display of ineptitude and folly that is beginning to rival the farcical Elizabeth Mathews appointment to the CNLOPB. Cover up. Get disclosed. Shoot self in foot. Change story. Shoot self in other foot and buddy in the both feet. Repeat process until all clowns have left the building. If it weren't for the fact that entire generations of Newfoundlanders and Labradorians, most not yet born, are going to have to pay for this lack of common sense ... well, it would be the Key Stone Cops all over again. Yet it is very serious. There are entire industries and economies at stake. Danny Williams, stand and be proud b'y.