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)

Thursday, November 28, 2013

Paul Oram's Bed

Paul Oram is a Newfoundland businessman. He is also an ex minister of the PC Williams government. He has interests in Labrador, including the Home Hardware in Lab West. He's all in when it comes to business and politics in this province. You will know Paul Oram if you go to Glovertown, and see the only older guy with a year round tan there. That's him.

This week, Oram lost it on the social media site, Twitter, after his beloved PC party lost an important by-election. As Kathy Dunderdale put it in The Telegram today:

“I’ve had tremendous support from the caucus, particularly all through the campaign, again last night and this morning,” she said. “I’ve had wonderful messages from party members from right across the province — very positive, very supportive.”
Dunderdale pointed out that the goverernment has spent an a lot of money in that district since it came into the Tory fold in 2007.
“We’ve invested hundreds of millions of dollars in that district, so the demands of the district were met,” she said. “This was a district that was largely ignored when it had Liberal representation, so there was a great deficit in infrastructure.”
Oram saw things a little differently - especially on the whole "tremendous support thing.
Check out his tweet from the night the PCs lost the by-election:
Time for our party to take a hard look at the future. Enough is enough.

Better communications. Our message is just not resonating with the people of this great province.

@waynerbennett im saying that it's time that we do whatever it takes to make this right. The good message is not resonating.

Then there is this dandy conversation:

Image will appear as a link

Now, in the most political jurisdictions in Canada this would pass without any real notice. In this province, however, the government/party message is strictly controlled and dissent is an offense punishable by shunning - financially and otherwise. A rant like this on social meia in this province is really akin to a call to arms, or perhaps better put - knives.

That is passing strange to me coming from Oram. You see, it wasn't long ago that Oram was a very devoted follower of Dunderdale. I was going to keep this diddy solely for my book, but what the heck, it fits now.

You have to go back to early 2011 - January to be exact. Williams had resigned, Dunderdale was appointed interim leader (and thereby Premier), and the leadership nomination process had just ended. As part of the process each candidate had to submit a list of 50 people who supported the party's policies and principles, and also supported your leadership bid. I had 70 odd just to be safe - wasn't safe enough though.

In any case, that list of people went to the Party leadership committee, and only the party leadership committee. It was not a public document. Imagine my surprise then when one of the main supporters of my quiet campaign to get nominated called me, rather panicked, because Paul Oram had phoned him from his holidays down south.

What most people in the province do now know is that members of Oram's family in the Glovertown area were my main organizers and supporters. We met, we planned, and we executed that plan. I could not have done it without them and a few others. Paul Oram didn't quite appreciate the niceties of democracy, and especially did not appreciate members of his family and church signing my nomination papers - he didn't know the full extent of their involvement then. My man in Glovertown, his family member, was upset that Oram had called him and threatened him if he didn't quit supporting my campaign immediately. Oram was bewidered why he would support anyone other than Dunderdale, and it was bad for business. His family member wasn't swayed however, and we carried on.

What Oram also didn't know is that his family members had brought along PC MHA Sandy Collins. Collins is the member of Oram's district. Collins was on board for the leadership challenge all the way, and even wanted to meet in St. John's the night before the nomination papers were going in - I called it off due to the late hour. If Oram had known that he would likely have seriously lost it. I remember thinking then, this Oram guy must be some kind of control freak that he would call and threaten his family members for supporting me in an entirely democratic leadership contest.

And now Oram is the one leading the charge to oust Dunderdale - or so it seems in my opinion. Such is the dark side of politics here. Such is the hypocrisy. Such is the pragmatic twisting of our democratic values. My advice to Oram, and the like, is scream all you like, but enjoy laying in the bed you made.

Saturday, November 16, 2013

Columnist Latest Victim of Muskrat Falls Dam

" We have a natural right to make use of our pens as of our tongue, at our peril risk and hazard"

Michael Johansen is an excellent journalist. An award winning journalist. A published novelist. A columnist that is now without a column.

Johansen lives in Labrador, and loves it. He took three years to build his own cabin near the Churchill River in the rough backwoods of Labrador. It is his place to live and his place to love. The place is sacred to him. Michael Johansen is also an opponent of the Muskrat Falls hydro dam project, located ten miles from his cabin, and that made him dangerous.

What most people in Canada, and the world, do not understand about this province is its dark side. The side that is not the "friendly Newfoundlander and Labradorian". The side of the Merchants. In this province it is alive and well. Michael's story is the most recent of many similar stories.

Michael, up until this week, was a weekly contributing columnist to the Aurora and Labradorian newspapers in Labrador, and a frequent contributor to The Telegram in St. John's. All three papers, and all the papers in this province, are owned by Quebec based Transcontinental Media Inc.

Michael's columns varied, but often focused on the provincial government here, and its child Nalcor Energy - a provincial crown corporation. His columns were often not favourable to the two and in particularly the Muskrat Falls project. They also focused on the costs of the project like the hyper inflationary effect on the local rental market, which left people homeless and hopeless. In other words, he focused on the societal costs versus the fanatical march of Nalcor and the government to build the Muskrat Falls dam. In doing so, Michael reflected the concerns and feelings of many in our province. That was, apparently, his great sin.

In June of this year a new Editor was put in charge of the Aurora and Labradorian newspapers - one Bonnie Learning. Not a name really known among the province's people, but one certainly known in provincial government circles. Learning was the constituency assistant for John Hickey, the now retired Progressive Conservative Cabinet Minister from Labrador - Minister of Labrador and Aboriginal Affairs. Hickey was, and remains a vocal proponent of the Muskrat Falls dam project.

Given that constituency assistants to Ministers must be aligned with their employers political beliefs, and given that Learning filled that role for Hickey, Learning is in a potential conflict of interest in adjudicating her editorial functions when it comes to issues that involve the Muskrat Falls project. She took the position of Editor in the summer of 2013. Barely 5 months later, and after an ongoing war with Johansen over content regarding Muskrat Falls, Nalcor and the government, he finds himself without a column.

This is how it works in Newfoundland and Labrador. The politics of feudalism. Do as the master says or bury thyself. Michael is the latest victim of that cancerous mentality. A mentality that has left the province as the worst democratically functioning governments in Canada - if not North America. What surprises me is that Transcontinental Media, a Quebec based company would hire a person, so directly linked to the current government, for a position that requires neutrality. The position of Editor is critical in our democracy as it dictates what the public will see, learn, and know.

The censorship surrounding Michael has been dutifully ignored in the media by and large. The Independent gave a great story on the issue. VOCM ran a news article on it, and all three of its daily province-wide radio shows covered the issue. In particularly, Paddy Daley gave an inspirational talk on the issue, and lambasted the apparent censorship. However, stations like the CBC did not even give it a mention - as if somehow the firing of an award winning journalist and columnist over his stories on the government and Nalcor was a non-event. Something rotten in the State of Denmark to be sure.

Unfortunately, both the travesty delivered to Michael, and the reaction to it in the media here, illustrate an ongoing illness in Newfoundland and Labrador. An illness that keeps its people down, and without the taken for granted right to knowledge that most in the country enjoy. That illness is totalitarianism. The few dictate to the many. Newfoundland and Labrador is not a democracy. Instead, it is the playground of the small business elite in St. John's and to a lesser extent, those situate in Labrador. A marriage of financial interest that have nothing to do with the well being of our people. A ruthless, undemocratic approach to governing in modern times. An insult to our dead that rest in graves throughout Europe, and the people inside them who gave everything so that we could live in freedom. "Lest We Forget". Yes, lest we forget why they sacrificed. That sacrifice is ignored here. It is an unhelpful encumbrance to those that demand to impose their will upon us. Michael Johansen is the latest victim of this.      

Wednesday, November 13, 2013

Muskrat Falls Math - Part 2 - the Newfoundland Power Angle

No discussion on power can happen in this province without factoring in Newfoundland Power Inc. Newfoundland Power is a subsidiary of Fortis Inc. It has the enviable position in Newfoundland and Labrador of being the sole retailer of power to customers in the province. Essentially, it buys power from Newfoundland and Labrador Hydro (NLH), a crown corporation controlled by Nalcor (the province's energy crown), and in turn sells it directly to customers.

I was able to piece together a historical summary of revenue for selling power vs cost of buying it. The history goes like this, with the percentage of profit before other costs beside it:

In the millions:

2012   581,000 -  380,000 - 35%
2011   573,000 -  369,000 - 36%
2010   555,000 -  358,000 - 35%
2009   527,000 -  346,000 - 34%
2008   517,000 -  337,000 - 35%
2007   490,000 -  327,000 - 37%
2006   421,300 -  257,200 - 39%
2005   420,000 -  256,000 - 39%
2004   404,400 -  244,000 - 40%
2003   384,200 -  228,000 - 41%
2002   369,627 -  210,764 - 43%
2001   359,305 -  202,479 - 44%
2000   348,413 -  199,266 - 43%
1999   342,001 -  192,775 - 44%
1998   335,751 -  191,586 - 43%
1997   343,677 -  190,711 - 45%
1996   341,560 -  192,114 - 44%
1995   338,934 -  191,081 - 44%
1994   338,367 -  188,352 - 44%
1993   333,570 -  186,146 - 44%

The near twenty year trend is clear - the profit in retailing power in this province has been steadily dropping, yet it still comes in at 35% before other expenses. Also, the cost of power to Newfoundland Power more than doubled in the last twenty years, but its profit margin decreased just 9%. This is the key factor.

In Part One of this series, Muskrat Falls Math - Into the Abyss, I outlined several scenarios likely with the construction of the proposed dam. In Newfoundland and Labrador, Newfoundland Power's cut has to be factored into the equation.

Given the current rate of power sold to Newfoundland Power on a wholesale basis is about 4.7 cents per kwh, the following scenarios are very real scenarios for us:

1.  Current arrangements remain in place, and the dam produces only 510 MW as stated by Nalcor VP Gilbert Bennett capacity of Muskrat Falls is realized, the blended price Nalcor would have to wholesale the power at, to break even, is 13 cents per kwh. That is a 276 % increase in the wholesale price from today. Then there is Newfoundland Power's retail cut. Based on the historic percentages outlined above, Newfoundland Power's hike up could be as high as 35%. If that scenario were realized the cost to the average home for power would be 16.9 cents - with HST 19.09 cents. From the current rate of 10.4 cents, that is almost a 100% increase.

2.  Combined lawsuits by myself, and Hydro-Quebec, render the Water Management Agreement unconstitutional. The maximum production of the project is 110 MW. In this scenario the base rate for wholesale of power rises to 15 cents per kwh - which represents a 300% increase in the current base rate. Add in a 35% hike up from Newfoundland Power and the new rate for rate payers would be 20.25 cents per kwh - with HST 22.93 per kwh. That represents a 125% increase.

When you consider that only 30% of Newfoundlanders and Labradorians pay any income tax (an indication of poverty within the province), the aging population of the province, and the loss of competitive advantage for industry, this spells economic disaster. Elderly people and low income earners can expect to pay twice as much for a bill that does not increase the quality of their lives. No extra economic spin off will result in benefits for businesses or their employees - other than the three year build period at Muskrat Falls. In fact, according to the Newfoundland and Labrador government, only 80 permanent jobs will be left created once Muskrat Falls is complete.All we will have done, as has been done with the economy (particularly in St. John's area) is create hyper inflationary pressures that can not be sustained given the debt and demographics of the province. In other words, the party will be over and the bill will be massive.


Saturday, November 9, 2013

Muskrat Falls Math - into the Abyss

I have yet to read an article that attempts to tackle the complete Muskrat Falls "integrated business case", including especially the costs and returns it is designed to provide. So it's time to tackle that head on.

This week VP Gilbert Bennett, Nalcor stated the average production for Muskrat Falls is estimated at 510 megawatts (MW). That should be a big wake up call for people. Up until now Nalcor and the government had been holding fast to the full production capacity of the planned dam - 824 MW. That represents a 38% decrease in expected production from the Muskrat Falls facility. Ordinarily that would kill a project immediately, but the government has other plans. I'll get to that in a bit, but first the actual production costs compared to the returns for our treasury.

Back a year ago our now departed Minister of Natural Resources, Jerome Kennedy, stated in the House of Assembly that the cost of power produced at Muskrat Falls would be $.25 a kilowatt hour (kwh). That was based on production of 824 MW. That was to break even, and before costs associated with transmitting to Nova Scotia were factored in, and without cost over runs. 824 MW of power equals 4.9 terawatt hours, or 4.9 million megawatt hours of energy per year, or 4.9 billion kilowatt hours - for the purposes of this article we will stick with kwh.

So, if Muskrat Falls could produce full power, full time, it would produce 4.9 billion kwh at an annual cost of $1.225 billion - to break even (remember that number). That is to Soldiers Pond. As the energy converts from DC lines to AC lines, travels under the Gulf, and does that process again, it loses about 5% (conservatively) of it's energy on each end. Then there are the transmission fees Nalcor has to pay to Emera to send power across the sub sea line, etc. I'm not even going to factor that in to keep things semi-clean.

So, the annual budget necessary to run Muskrat Falls at a break even point is $1.225 billion. That doesn't change now that the average production, according to Bennett would be 510 MW per year. What it does mean is the cost per kwh goes from $.25 per kwh to $.40 per kwh. That is bad. Very bad. Now that $.40 per kwh has to be blended into Nalcor's already existing energy production (Churchill Falls is not included - explanation later) of 1850 MW or 11 billion kwh. Right now rates differ depending on where you live in the province and whether or not you are business or residential. Based on stated gross electricity sales of $520.7 million for 2012, the average price per kwh for power is 4.7 cents per kwh ($100 million of that $520.7 million is heavily subsidized Labrador and Industrial customers). 

Blending the current rate with the Muskrat Falls rate puts the new average rate at 13 cents per kwh or 300% higher than the current average rate. Of course that number includes industrial and Labrador clients.

Here is the hitch. All the numbers above are based on the Water Management Agreement being legal/constitutional. Without the Water Management Agreement, Nalcor stated in pre-filed evidence with the PUB, that Muskrat Falls could only run at 20% capacity. This issue is before the Court in Quebec - it will be heard on January 20, 2014. It is also before the Court here with yours truly. What happens if/when the obvious happens and the Water Management Agreement is thrown out?

Well, it changes the numbers radically. That takes the average production at Muskrat Falls down to a mind blowing 102 MW - or 607,142,857 kwh. To put that number into focus, the average price per kwh for Muskrat Falls energy would have to be $2.02 per kwh - by far the most expensive power on the planet by a landslide. In 2012 Nalcor generated that $520.7 million in revenue on 1850 MW. Now it's looking to generate an additional 102 - 510 MW for $1.225 billion a year. The math is pretty clear.

Of course Nalcor is, according to the Premier and Gilbert Bennett, planning on taking 1500 MW a year from the Upper Churchill starting in 2016. Seems they have been taking additional power from the Upper Churchill since June 2012 according to Hydro-Quebec (which is apparently why they filed suit). If that plan was actually legal the additional revenue, based on an average of 6 cents per kwh (the average spot price for 2012) would give Nalcor an extra $534,600,000.00. The Government and Nalcor have been spinning the line that Muskrat Falls will make $400 million in revenue. Seems they are depending on taking that "extra" power from Hydro-Quebec. Like I said, if it was legal then it would be great. It just isn't though. Even Nalcor own 2012 Financial Report states all the power, but recall, "generated at the Upper Churchill" belongs to Hydro-Quebec.

Just one last thing. If Muskrat Falls is projected to generate 510 MW Nova Scotia wants about 300 MW of that power at spot market prices, plus the 25% of generation it gets for free. My math has that total commitment to Emera being 427.5 MW for a blended price to them of 4 cents per kwh - about the same price they have promised to Labrador mining companies. Obviously, the government is not building a dam to give all but 82.5 MW to Nova Scotia. They need that Water Management Agreement to take that additional power from Hydro-Quebec or their deal with Emera is finished. All the economics, and therefore the project, rely on the Water Management Agreement. Bad as Muskrat Falls is for the taxpayer/ratepayers of Newfoundland and Labrador, the death of the Water Management Agreement is a step into the abyss if we continue to build...

Wednesday, November 6, 2013

Harper, a Caligula for our time.

In normal times I would not write this story, but these aren't normal times. I looked forward to seeing the eyes of the people, through the media, being firmly focused on the scandal enveloping the Prime Minister, his office and the Senate. Yet it was  not to be. Instead, Toronto's Mayor Rob Ford pulled his Samurai sword out and threw himself upon it in front of the blood thirsty Toronto media.

Ford, a personal and political friend of the Prime Minister decided, that of all days, to admit to having tried crack cocaine, by stopping himself in front of the media at his office and asking them to ask him a question that was asked over a year ago: "Did you smoke crack?". That drew the attention of the national and international media for the day, including a dramatic press conference right before the Senate was to have its historic vote which was just a repeat of his earlier performance. Mission accomplished - the night of the long knives in the Senate drew barely a glance.

The fact is Prime Minister Harper, the Caligula of our times, had his guard politically execute three Senators. Senators Duffy, Wallin, and Brazeau. The Canadian public had watched this drama take place in record numbers, with about 88% engagement - a record in recent times. The central issue to Senators fighting the Prime Minister's plans was due process - were these Senators being given fair judgement before being suspended. The issue of due process struck home with Canadians as they railed against yet another arbitrary decision of their Prime Minister. After Duffy's revelations of a political conspiracy and cover up, backed by an extensive email and paperwork trail, confirmed for many their thoughts of Prime Minister Harper - he is dishonest.

The three Senators claimed they followed the rules. They produced emails from senior officials authorizing their expenses, and charged the Prime Minister with getting rid of them for to garner political favour with the Conservative Party base.

The Prime Minister, and the Conservative Party, claimed these Senators "broke the rules", were caught by the auditors, and deserved a two year suspension without pay, benefits or use of the Senate facilities and staff. The common spin being if you or I did this in our work place we would be treated no differently - at a minimum.

All these arguments aside, and they can be put aside, the one most relevant guideline that was completely ignored by Harper, the Conservative Party, the Press, and even the Senators is such a move is unconstitutional. The role of the Senate, and the guidelines for all things Senate, is the British North America Act (BNA) of 1867 - our original constitution. It was consolidated with our official constitution in 1982 - The Constitution Act. The BNA makes no provision for suspending a Senator. It does have a very specific set of criteria to fire a Senator:
Disqualification of Senators31.The Place of a Senator shall become vacant in any of the following Cases:
(1)If for Two consecutive Sessions of the Parliament he fails to give his Attendance in the Senate:
(2)If he takes an Oath or makes a Declaration or Acknowledgment of Allegiance, Obedience, or Adherence to a Foreign Power, or does an Act whereby he becomes a Subject or Citizen, or entitled to the Rights or Privileges of a Subject or Citizen, of a Foreign Power:
(3)If he is adjudged Bankrupt or Insolvent, or applies for the Benefit of any Law relating to Insolvent Debtors, or becomes a public Defaulter:
(4)If he is attainted of Treason or convicted of Felony or of any infamous Crime:
(5)If he ceases to be qualified in respect of Property or of Residence; provided, that a Senator shall not be deemed to have ceased to be qualified in respect of Residence by reason only of his residing at the Seat of the Government of Canada while holding an Office under that Government requiring his Presence there.


Not one of these criteria were met. There is the suggestion that these Senators did not reside in their province, but no finding was made to that effect by the Senate or the Courts. Even if they were found not to be residing in their province the sentence is to expelled from the Senate permanently, with a replacement to be chosen. That is a very important fact. The constitution requires that each province in confederation be represented by a specific number of Senators. It states these Senators must be "in" the Senate, and they must "represent" their province. Specifically, from the BNA Act:

Representation of Provinces in Senate22.In relation to the Constitution of the Senate Canada shall be deemed to consist of Four Divisions:
3.The Maritime Provinces, Nova Scotia and New Brunswick, and Prince Edward Island;
4.The Western Provinces of Manitoba, British Columbia, Saskatchewan, and Alberta;
which Four Divisions shall (subject to the Provisions of this Act) be equally represented in the Senate as follows: Ontario by twenty-four senators; Quebec by twenty-four senators; the Maritime Provinces and Prince Edward Island by twenty-four senators, ten thereof representing Nova Scotia, ten thereof representing New Brunswick, and four thereof representing Prince Edward Island; the Western Provinces by twenty-four senators, six thereof representing Manitoba, six thereof representing British Columbia, six thereof representing Saskatchewan, and six thereof representing Alberta; Newfoundland shall be entitled to be represented in the Senate by six members; the Yukon Territory and the Northwest Territories shall be entitled to be represented in the Senate by one member each.
In the Case of Quebec each of the Twenty-four Senators representing that Province shall be appointed for One of the Twenty-four Electoral Divisions of Lower Canada specified in Schedule A. to Chapter One of the Consolidated Statutes of Canada.

The Senate is in fact, constitutionally, not a "star chamber" of sober second thought. Constitutionally it is described to be a weighted, appointed body that's focus is to represent provincial interests against an otherwise elected House of Commons. The rise of provincial governments in that role has practically diminished that role for the Senate, but on paper that remains its purpose. The bottom line is, the provinces of Quebec, PEI and Saskatchewan are without the constitutionally required number of Senators to represent them for two years. That is unconstitutional. That is improper.

Stephen Harper, the prodigy of Preston Manning, and co-founder of the western based Reform Party of old, has become the ultimate dictator. Instead of changing Ottawa for the better, he has simply used his office as a tool to impose his will. He has abused his power, his authority, and his office. He has shown his ruthlessness, and at the same time exposed to us all that the foundations of our country are but a mere inconvenience to him. It does not make him a strong leader with a vision. It makes him the Caligula of our times here in Canada, and it needs to change immediately.

Monday, November 4, 2013

The Privatization of CFLCo 2.0

These days, the number of arguments and issues relating to the first step of the Lower Churchill development (the Muskrat Falls dam) are so numerous that it's easy to become lost in the maze for the casual observer. There is the politically mangled agreement between Emera and Nalcor that is starting to resemble the same desperation of the ill-fated Hydro-Quebec renewal clause in the 1969 Power Contract. The issues hear are primarily political, but legally could effect the federal loan guarantee. There is the North Spur controversy which questions the physical integrity of the project, with the certain possibility of a massive concrete blanket worth billions being wrapped around the Spur. There are the environmental issues. There are the five lawsuits which place the loan guarantee expiry date of December 31, 2013 out of reach. There is all of this. But there is one factor that gives this article its title - the poison pill: the Reversion Act decision by the Supreme Court of Canada in 1984.

I touched on this issue in a previous article regarding the recent Hydro-Quebec court challenge of Nalcor's decision to take more power than it's entitled to under the Power Contract. That issue is currently before the Court. That article has had a huge readership internationally, and nationally, including: every major Canadian bank; the largest US investment firms; multiple governments (including Quebec); and multinational companies from Germany to the US. In other words, it's a big concern, and so it should be to anyone doing any serious due diligence of this project.

Nalcor admitted, in its pre-filed evidence before the Public Utilities Board (PUB) in 2009, that a water management agreement was necessary in order for the Lower Churchill project to be viable (both proposed dams: Muskrat Falls and Gull Island). That part is true, and frankly just common sense. Without it, the projected cost of power delivered to the Island from Labrador would go from 25 cents a kilowatt hour (kwh), already the most expensive power in the world, to a staggering 75 cents a kwh (at a minimum). This of course would immediately put the finances, and therefore ability to survive, of all but the wealthy in the province. So, the water management agreement is the life blood of the Lower Churchill project, without which it dies.

Premier Dunderdale has, in the last two months, stated several times that the position of the government, and Nalcor (or is that the other way around), is that when the Power Contract renews in 2016 our province does not owe Hydro-Quebec the same obligations as the first term of the contract.
Their legal position is that after 2016, Hydro-Quebec is subject to an "energy allowance", which means that it has only a block of power each month, and the rest is available for Nalcor to take at the same cost Hydro-Quebec would have gotten for it (by 2016 that will be an incredibly cheap $0.0020 per kwh). Nalcor estimates, according to Vice-President Gilbert Bennett, that extra energy would be about 1500 MW per year, which would generate about $600 million in profit for Nalcor once sold. That is where any and all the "revenue" is in the Muskrat Falls dam project. That's the plan anyway.

Here's the killer:
The Supreme Court of Canada, 1984, decision on the Reversion Act, as proposed by the province's government of the day:

"the company (CFLCo) signed a contract (the Power Contract) with Hydro-Quebec whereby it agreed to supply and Hydro-Quebec agreed to purchase virtually all of the hydro-electric power produced at Churchill Falls for 65 years."

The Court then goes on to qualify what Hydro-Quebec is not entitled to:

"It is against this background that the Power Contract between CFLCo and Hydro-Quebec was signed on May 15, 1969. It is a lengthy and detailed document. Under the contract CFLCo agreed to supply and Hydro-Quebec agreed to purchase virtually all of the power produced at Churchill Falls for a term of forty years, which was renewable at the option of Hydro-Quebec for a further term of twenty-five years. The price to be paid for the electricity was to be based on the final capital cost of the project. Provision was made for CFLCo to retain a fixed amount of power for use within Labrador by its subsidiary Twin Falls Power Corporation. In addition CFLCo could recall on three years’ minimum notice up to 300 megawatts (MW) to meet the needs of the Province of Newfoundland."

The Supreme Court of Canada, the highest Court of the land, unanimously agreed that Hydro-Quebec had the right to all the power produced at the Upper Churchill until 2041 (65 years) except 300 MW of recall the province could request, and the 225 MW for Twinco. Given that the issue was decided in 1984, the question remains: How can Danny Williams as Premier, and then Kathy Dunderdale as his successor, possibly think our province can take any of the power from the Upper Churchill dam other than the 525 MW already committed to by recall and Twinco?

It is a hard question to ignore, yet our media in the province has done just that - completely ignored it. The provincial CBC has been particularly negligent given it's role as a public broadcaster paid for by the public. While the CBC as a corporation is a strong advocate, normally, of the public interest, CBC Newfoundland and Labrador seems bedeviled by personality and spin. But I digress. Bottom line is, other than the radio shows, this fundamental issue is being completely ignored, and the media is not holding these politicians, and Nalcor, to account on our behalf.

The Williams/Dunderdale approach does beg one very specific question: Is the intent of the Lower Churchill project to undermine the province, and specifically CFLCo, with the end result being a deliberate bankruptcy of CFLCo, resulting in it's privatization and/or sale? I ask this question for several reasons. First off, it's not as if privatization of CFLCo is something new. Former Premier Clyde Wells, along with his Chief of Staff Ed Hollett (now a blogger writing under "Sir Robert Bond Papers"), attempted to privatize CFLCo in the 1990's, but had to back off after huge public opposition - then headed by Sue Kelland-Dwyer (now blogging under "Sue's Blog"). 

This approach would be almost too far fetched to consider if it weren't for a few facts. One is Danny Williams. He is a lawyer. It's quite obvious to even the untrained eye that this water management agreement is not constitutional - let alone a lawyer of some experience. Secondly, the province has an entire legal department, just in case William's dropped the ball. What remains far fetched is that somehow between them the obvious flaws of their deal were not apparent. 

There is also the 1998 Shareholder's Agreement, drawn up by then Liberal Premier Brian Tobin and Dean MacDonald, which essentially gave Hydro-Quebec a veto over CFLCo's business operations, and equal rights to any shares of CFLCo if/when they become available. 

Then there is this little tidbit from the 2008 New Dawn Agreement, signed with the Innu of Labrador, to authorize building the dam. In particular, an entire section of which details how a sale of CFLCo shares would affect the Innu Nation's income:

"  2. (c) In the event that the parent company of CFLCo (Nalcor) sells any of its common shares, the Innu Nation shall be entitled to receive three percent (3%) of the proceeds received from the sale of its common shares. If a sale takes place prior to September 1, 2041, the total proceeds shall be reduced by the present value of the expected free cash flow from the common dividends from the date of sale up to and including August 31, 2041.

       (d) If CFLCo issues a new class of shares with the purpose of diluting the value of the dividends on common shares referred to in section 2(b), above, the Innu Nation's share of common dividends is to be calculated as if the new class of shares had not been issued."

It begs the question: What exactly did the Williams' government, and its then Minister of Natural Resources, and now Premier, Dunderdale, have in mind with these provisions. They are clearly forward looking and anticipate a sale of CFLCo shares. Is this in anticipation that CFLCo may have to be sold? Is it in anticipation of the bankruptcy of CFLCo as detailed in the Department of Natural Resources Report of 2012? These are questions right now without answers. You either have to believe Williams and company were so foolish as to stumble into catastrophe, or you have to think it was planned to be so. One friend of Danny Williams said to me once: "People like you and I plan on where we are going to go for lunch today. Williams plans where he will be having lunch two years from now." If that's the case, it leans to the answer being a deliberate, planned catastrophe. If it's planned then there has to be a reason.