Seven by-elections later, without success, the ruling Tories in Newfoundland and Labrador resemble the old Iraq war slogan "shock and awe". Last night it was clearly visible on the faces of the defeated candidates and the cabinet ministers that campaigned on their behalf. It's not that they don't understand what's happening to them, it's just that they don't understand what happened to them.
For the PCs all roads lead to Muskrat Falls. After previously sacred Danny Williams got his Muskrat Falls deal he resigned - mere weeks later. That shattered the "God" image so carefully crafted. The population was left unstable as if it had lost its father, and its foundation had been shaken. Such is the danger of iron man rule - all men are mortal.
Then there was the viscous battle on the airwaves and in the social media over the wisdom and value of the project. The PCs hired expensive communication firms, and stalled requests for information on the project. When that strategy appeared to crack the Tories turned to their normal practice: legislation. They created Bill 29 to amend the Access to Information Act. Typically that would be shuffled off as no big deal. It's not as if the public are filing access requests. However, the press, smelling a rat, went ballistic. Muskrat Falls opponents and the opposition parties grabbed onto the issue, backed by the press, and even forced a multi-day filibuster. More importantly the image was sealed. The PCs couldn't sell the bill as just normal legislation, and the public began seeing it as an act to cover-up Muskrat Falls dealings. That was when the trust was violated.
Thereafter the PCs, generally speaking, lost public trust in their word, but not necessarily in the project. Newly appointed leader Dunderdale and her team, which included Williams' brother, decided to attack the Muskrat Falls opponents rather than address the core public trust issue. She termed opponents as "nay-sayers, known critics of the government" etc... Her arrogance, and that of her colleagues, was so palpable the public became repulsed. When the PUB refused to give the project an unfettered endorsement, the PCs went crazy with indignation - including Williams who derided not just opponents, but also the PUB. It was war in a way. The problem for the PCs was their guns were focused in the wrong direction. As distrust grew, the people began taking opponents accusations seriously, and so an attack on the assertions of proponents began to be an attack on the people themselves.
It always was, and remained a battle for hearts and minds. The PCs refusal to alter their strategy of arrogantly attacking those opposed to their vision, and instead addressing the core issue of trust, resulted in a solidification of the view that "the PCs were out of touch". A natural result when a government can't see the core issue and instead shoots the messenger. So great was the vitriol that Dunderdale became almost detested by the public. The PC caucus decided their poll numbers were bad enough to fire Dunderdale, and they did just that. However, by this time, the public considered them, rightly so, as all infected by the same affliction - arrogance.
As if to emphasize the point the PCs, led on the outskirts by Williams, attacked leadership candidate Bill Barry (a reformist-type candidate) and coronated a pro-Muskrat Falls businessman - Frank Coleman. At one time an endorsement by Williams would have guaranteed a candidate acceptance among the public, but this time it back fired. The endorsement hung around Coleman's head like a guillotine, and in the end the blade came down. Coleman's company, HVP, was quietly released from a money losing government contract in Labrador, and the $18 million dollar performance bonds that were meant to guarantee it. After months of agony, and accusations "Danny's Man" was simply implementing "Danny's Will", Coleman resigned before he was even sworn in.
That led to another leadership race, after the first one was quietly swept under the carpet like it never happened, and Paul Davis was anointed the new PC leader. Davis immediately came under scrutiny for political ties to his old employer, the RNC provincial police. At the core of the issue were campaign donations that were banned by the RNC Act. (to this day the 2013 Political Contribution List has not been released publicly - although it has been ready for 7 months I'm aware of). Furthermore, an apparent political deal reached between himself and perennial political opportunist Steve Kent still hung in the air as Kent was appointed Deputy Premier. The public smelled the same-old Tory contempt for democracy that had its roots in the Muskrat Falls battles, and Davis was labelled. Then came consummation of another apparent political deal when Senator Manning's (a Davis leadership supporter) niece was appointed to cabinet as an unelected Justice Minister.
Every action has a reaction. Every move the PCs made over the last four years did the exact opposite of what they intended. They reinforced the perception created by the Muskrat Falls battles that secrecy and power were the poison of choice for the PCs. They never adjusted from having a front man that could sell ice to Eskimos. They never saw the effect of the 5th column that battled them at every turn over Muskrat Falls. They never realized that the core issues with Muskrat Falls would stick and become the core issues against the government. There are none so blind as those that refuse to see. So it went with the PCs. All their roads led to Muskrat Falls.
Showing posts with label Kathy Dunderdale. Show all posts
Showing posts with label Kathy Dunderdale. Show all posts
Wednesday, November 26, 2014
Friday, June 6, 2014
Frank Coleman and Lies of Omission
What to say on the Frank Coleman/Humber Valley paving story? It's a story of greed, politics and deal making. A tale that one might expect to read from yesteryear, but not in today's "transparent" world of politics. An agreement founded in such arrogance, and so contemptuous of the people of the Province, that you couldn't be blamed for having a hard time believing it could happen today - even given the murky waters of Newfoundland politics. Yet, here it is.
It starts with a sudden coup in the Premier's Office as Kathy Dunderdale is forced from office by a caucus revolt - that was January 22, 2014. The, on February 11, former premier Danny Williams stepped out of the shadows and smeared the position of PC leadership candidate Bill Barry:
"Bill Barry would definitely not have my support. Absolutely not... He indicates that he's interested in privatizing energy..Nalcor, Hydro, he has an interest in privatizing health care, and he has an interest in privatizing education. Well, he doesn't stand for anything that I support, so Bill Barry is off my list. That's probably the clearest thing I can tell you."
Barry's response was direct, but diplomatic:
"Unfortunately, he (Williams) talked about a letter I sent to caucus which, in my view, he totally mischarasterized (sic). I certainly didn't say Nalcor would be privatized and health and education would be privatized. That's not what I said at all."
Barry's response was tame, because he should have called Williams' comments outright lies, with the somewhat obvious purpose, given the context of the rest of his commentary, to destroy Barry as a PC leadership candidate. These were the first shots so to speak.
By sheer coincidence no doubt, two days later Frank Coleman is interviewed by the Telegram on "rumors" he may be running for the leadership. It's actually a most interesting and foreshadowing interview as it turns out. Coleman's comments then:
" It (running for leadership) depends on me having a fairly robust discussion with my partners in the businesses that I am involved in about if I do make a run at this.."
" I am heavily involved (in the business) and there is a bunch of things we are in the middle of, and we are trying to work our way through."
" There is a bunch of things I'm working through...if they transpire the way I hope they do, great. If they don't, it will be somebody else's mantle, not mine."
Cryptic, very cryptic words given the time and what was about to transpire. Coleman admits several things here: 1. That his running for leadership depends on "working things through" with his businesses; 2. That the conversation involves his business partners; and 3. That he is personally working these things through. A man very deeply involved. Now consider, at this very moment in time, his business Humber Valley Paving (HVP) is in trouble with its largest contract - the $19 million paving contract for the Trans Labrador highway. He is losing money, had to get a year extension to complete it, and had personally guaranteed the performance bonds to finish it. In other words, Coleman was a man in a serious bind. Can it possibly be that the words he says above do not refer to such a bind? A reasonable person would conclude they refer to the exact situation Coleman was facing with his government contract, the bonds and HVP.
Then, the very next day no less, Coleman contends he resigned as President and CEO of HVP. That's odd for a number of reasons, the least of which being: Why would the President and CEO of a company, that had just admitted he was "working things through" suddenly resign the next day? Is it reasonable to think that a man with his name on a $19 million bond, and with that company apparently unable to finish the job, would simply walk away from control of that situation on blind faith that something might come down the road to save him? Not only is that unreasonable, it simply defies imagination. The only logical conclusion is that he knew the issue would be resolved in his favour.
Then, on March 10, Coleman contends he resigned as a "director and shareholder". His words. To my knowledge, there is no way to resign as a shareholder. The only logical interpretation of that statement is he sold his shares in HVP. Considering his controlling interest in HVP, that can only mean he sold the company. That begs this question: Who would sell their control of a company if that company's performance of its work on a contract (in this case the Labrador highway) could mean being personally accountable for up to $19 million of your personal wealth? Not just that. Who would buy a controlling interest in a company that was about to default (possibly) on a $19 million contract? Then there are the issues that accompany any sale of a business like: negotiations; due diligence; legal work; and closing, etc. All of this would require much more than the month timeline that Coleman has put out there officially. Again, that defies any reasonable logic.
The obvious conclusion, of a reasonable person, would be that Coleman had full knowledge that his name would be removed from those bonds before he sold his shares - which would mean before March 10. In his words: "..if they transpire the way I hope they do." Apparently they did. Three days later, Coleman's son, apparently representing the new ownership, contacted Minister McGrath to have the contract cancelled, and thus remove the need for the bonds. Seven days later the contract was dissolved and Frank Coleman was released from his $19 million bonds.
Perhaps there is a hint of the truth when, during an interview with Fred Hutton at VOCM on May 9, 2014, Coleman made the following statement:
" I've been in this race for 6 months.."
Six months. That's an interesting statement considering at the time of the interview that would put Coleman's involvement at about the beginning of December, 2013 - or just before Dunderdale was forced to resign by her caucus. For Coleman, that means he would have had to been involved in the ouster of Dunderdale in some way. After all, how could he be involved in a leadership race that didn't exist at the time? There is only one answer for that - it was a backroom plot to dump Dunderdale, and that plot had to have involved Coleman in some way. His words, not mine - "I've been in this race for six months".
The CBC uncovered all this and broke the story. At first it was reported as a $9.5 million bond. Then it was discovered to be two $9.5 million bonds, equaling a total commitment of $19 million. Then it was discovered that Coleman had to sign for the bonds personally. All of this had to be dug up by the media. Coleman never proactively disclosed any of it, even when he knew the exposure was more than was being reported, and even though he new he had personally endorsed them.
Then, as the walls started to close in on him and McGrath, the stories started to trip themselves up. Coleman refused to be forthcoming with who the new owners were of HVP. He even refused to tell the media who he sold his own shares to. He began to trip himself up in his own lies. One such example:
" I don't believe that representatives of the company dealt directly with the Minister...My son, and other members of our company would have spoken directly to the officials. This would have been a decision by officials within the department to make the decision, and they would have made recommendations to the Minister."
As it happened, that wasn't true, and Coleman's media representative got back to the reporter:
"... (Coleman) did not intend to deny that his son, Gene, spoke to Minister McGrath."
Well, it wasn't just an intention to deny the meeting, it was a statement that there wasn't one. In fact, Coleman's son did the negotiating, and was still a director, if not a shareholder as well, of HVP.
Then, on April 30, McGrath made the following statement:
"We don't want to put a company out of business, because if you take their bonds away they would easily be put out of business for future work."
That was original excuse for dissolving the contract - to save the company and its employees. McGrath added that in order to have the job done on time and budget that it was necessary to cancel the contract as going after the bonds was unreliable. That lasted until the national association responsible for bonding agencies accused the Minister of misleading the public by giving false information regarding how bonds work. Yet McGrath still had his whole save the company and the jobs argument floating. Coleman remained silent on the issue of saving the company and the jobs. He never once said the company was in trouble. In fact, he called it "a great company". He bristled at the accusations that this "great company's" bonds were traded off for his agreement to run for leadership - May 6:
" No, I did not benefit personally from this whatsoever. It is incomprehensible to me that somebody would infer that I benefited personally from this."
That was until the media disclosed Coleman personally signed for the bonds, and would have been responsible for their having to be enforced. Then, despite not having mentioned one word of this before publicly, Coleman came out and said this:
" The option that the company would have had its bond pulled is not necessarily the right conclusion to reach. The company would have had other options, either to complete the work or to sell the work."
As usual in this saga, Coleman attempts to cover one lie with another twist. His problem though is his cover story only adds significantly to the drama. Consider his words. There was no urgency to cancel the bonds. The work could be finished or sold. Take him at his word on this for a moment. If those things are all true, then why did the Minister dissolve the contract and release Coleman from the bonds? That would only benefit one person, Frank Coleman. Not the employees. Not the company. Coleman's own defence to personally benefiting was there was no need to release him - so why did Coleman's son request it and why did McGrath do it? See, that's the problem with lies. We even tell our children this as they grow up. Lies only beget more lies, and eventually they all fall. I will leave you with this last Coleman quote, which I believe is the biggest lie of all:
"I can absolutely tell you there is nothing untoward here."
Thursday, May 8, 2014
All the King's Men - Part 1 - Derrick Dalley
All the King's Men is a new series on stories involving public officials, public dollars, and electoral donations. This story involves Derrick Dalley, the MHA for The Isles of Notre Dame, the current Minister of Natural Resources, and, back in 2011, the Minister of Business.
Dalley was a marginal MHA in the Williams' government between 2007-2010. He barely won his seat in 2007, and the worry in 2010 was that he wouldn't win it in 2011. So, on January 13, 2011 he was appointed to Cabinet as Minister of Business. He also sat on the Public Accounts Committee from 2009 on.
It was during this time that a little known company, Eastern Star Group Canada Ltd, was making its way through the environmental approval process to establish a shell fish plant in Dalley's district - which was approved on December 22, 2010. And, less than two weeks after Dalley became the Minister for Business, the government approved a $500,000.00 loan to Eastern Star Group to create the business. The press release is here http://www.releases.gov.nl.ca/releases/2011/fishaq/0126n06.htm
Dalley had this to say:
"This project is exciting for a number of reasons," said the Honourable Derrick Dalley, Minister of Business. "The processing facility is being established in rural Newfoundland which will result in new employment and other spinoff benefits for the local economy.."
What Dalley didn't say is that the project approval was great personal news for him - especially the potential spin off benefits. You see, less than 9 months after Dalley personally approved the loan to Eastern Star Group, he was apparently rewarded with some hefty political contribution for his re-election campaign by the folks from Eastern Star Group. The company itself gave Dalley $3,500.00 in reelection donations. One of the principles of Eastern Star Group, Phillip Davis, Head of the Biochemistry Department at Memorial Univerisity, and Vice-President at Eastern Star Group, donated another $3,500.00 to Dalley's reelection fund. Finally, as much as I can tell, one Rhonda White, a biology technician at MUN gave another $3,000.00 to Dalley's election fund. That's a total of $9,500.00 in political donations made directly to Dalley's campaign after he personally approved a $500,000.00 loan to the company from the taxpayers. None of the donors gave money before or after to the PC Party, or Derrick Dalley - it was a large, one-off donation.
In case that doesn't get your blood boiling, there is always the rest of the story.. After Dalley lent the taxpayer's money to Eastern Star Group the company folded and the taxpayers lost all their money.In a strange twist to the story, found after doing a bit of research, it seems we weren't really getting the whole truth on eastern Star Group to start with. The hint comes in its official name: Eastern Star Group Canada Ltd. Yes, the emphasis being on the word "Canada". You see, the Chinese gentleman that was fronting Eastern Star Group in Newfoundland, Hettinger Chang, also had an operation going on in the states called Eastern Star Group Plc, which was also known simply as "The Eastern Star Group" on their:
website
http://www.easternstargroup.com/
or on their Facebook site
https://www.facebook.com/pages/The-Eastern-Star-Group/314373741916301
or simply on their Zoominfo site
http://www.zoominfo.com/s/#!search/profile/person?personId=1584891737&targetid=profile
The fact is Mr. Chang's US business just didn't seem to exist legally in the US. There is no record of his company on any exchanges or ever being registered as a corporation in the State of New York. In fact, even the phone number given for his company in the states was fake, and actually belongs to a New York architect firm that has had it, as the lady said, "for decades". Its one claim to fame appears to be exporting a bit of coffee from Mexico to Russia in 2011 before it disappears from sight. In other words, it appears that not much due diligence was done by Minister Dalley, or his department, on Mr. Chang before the money was handed over.
Still can't believe it? Check out the registered office of Eastern Star Group Canada Inc in St. John's:
https://www.google.ca/maps/@47.597581,-52.723235,3a,75y,321.5h,90t/data=!3m4!1e1!3m2!1ss02E83ykrEVF4i-O1pPK7A!2e0
Bottom line in all this is that it stinks. It stinks bad. And Derrick Dalley, the current Minister of Natural Resources, responsible for billions upon billions of dollars in project and decisions, is up to his elbows in it. I ask myself, how does a minister explain taking personal political donations for his reelection fund from a company that he personally approved a $500,000.00 loan for on behalf of taxpayers? How is it that these three people gave a total of $9,500.00 once, and once only, in the same year they received that loan? The obvious question is: was this a reward for Dalley bringing in the dollars for the company? If it was it would be illegal. Ask yourself why a technologist from MUN who lives in St. John's, a professor in St. John's who also acts as a VP, and a company that had to borrow money from us to live, make a one-time election donation to an MHA who lives in Twillingate? This is another case where an RCMP investigation should shed some light. Dalley, just another of the King's men.
Here are some links to stories surrounding this company:
http://www.cbc.ca/news/canada/newfoundland-labrador/shuttered-plant-got-loan-from-controversial-fund-1.1179913
http://www.cbc.ca/news/canada/newfoundland-labrador/500k-at-risk-as-provincial-business-fund-recipient-folds-1.1165744
http://www.cbc.ca/news/canada/newfoundland-labrador/twillingate-shrimp-plant-remains-closed-1.1161197
Wednesday, January 22, 2014
Kathy Dunderdale - End Game
After the battle there is only tribute.
My experience with Kathy Dunderdale started at the PC convention in October 2010. I watched from 20 feet away as she nominated her choice as Vice President of the Party. It wasn't the "old boys" choice. A moment later, Danny Williams was on his feet and moving directly to his choice. He bent over and wrapped an arm around the shoulder of his choice, whispered in her ear long enough so everyone took notice, and Kathy's choice was scuttled. Symbolic really of the days to come.
When Williams suddenly chose to exit the political scene in December, 2010, Kathy became interim Premier due to her status as Deputy Premier. She claimed publicly she didn't want the job permanently, but no prominent members came forward to challenge. Suddenly there was a rah-rah for her leadership, and the taste of well-stroked ego convinced her to take it on full-time. I challenged her leadership with the required signatures and money, but the backroom boys wouldn't hear of it. A challenge and leadership race wasn't part of their plans. As Chick Chilock said to me, as left my home after spending three hours trying to brow beat me, "I am in the backroom, and we know you'll do the right thing." The right thing being: don't challenge the leadership.
In any case, Kathy took the bait of the backroom, disappeared for a few weeks, and came back a brand new woman. She had a new hair style and had shed dramatic weight in a very short period - leading some to speculate she had a surgery of some sort. She began her term with a soft, diplomatic approach, giving the doctors all they wanted and settling a large dispute with them. She hit a few bumps. Most notably the attempted appointment of Williams' girlfriend to the Offshore Petroleum Board. The attempt to cover up that mess, and the subsequent lies they got caught in, really framed the years to come - incompetence and falsehoods.
Kathy did manage to get through all that, win an election against two very weak opposition parties, and stroll on. She battled for the Muskrat Falls project, getting it through the House, but alienating many along the way with her combative, arrogant style. She pushed through Bill 29 severely limiting access to information in the province. She struck out viciously at opponents of the government as "nay-sayers" and "known critics of the government". She became framed as a sort of unfeeling tyrant.
All that being said, there is something else to be said here. There is no question, for anyone that understands how backroom politics work, that Kathy Dunderdale was set up from the very beginning. In the backroom its the "patsy" or "flak jacket". The patsy being the one that takes the fall for everything, and the flak jacket being the one to take the bullets to protect those really behind the scenes. In Kathy's case she had the unfortunate distinction of being both.
In my estimation, Kathy took the bullets for Danny Williams. Williams made every decision as premier until he left office in 2010 - some would say his decision making never ended. She took all the criticism for Muskrat Falls, Emera, the loan guarantee, etc. Most recently she took the blame for failing electrical infrastructure, crippled by $1.2 billion in cuts to upgrades and maintenance that were authorized in 2009 by her then boss - Danny Williams. She took the heat for mass layoffs in the public service, which had become bloated by massive hiring between 2004 and 2009 - by Danny Williams. She took heat for massive deficits in the public pension plans that were not paid into from 2003 to 2010 (or since) by her boss - Danny Williams. The list goes on and on.
Williams made himself out to be "good time Charlie". While he reigned it was one big party. Spend, spend, spend. During his reign the province would burn through nearly $11 billion in oil money. The massive hyper inflation raised the prices of people's homes and their wages. It was good times. Kathy then had to cut back to save up the 35% down payment needed for Williams' other pet project - Muskrat Falls. She had to put away upwards of $3 billion so the feds would put up their $5 billion loan guarantee. All a part of "Danny's plan" as one adamant PC said to me once.
Yes, the truth about Kathy is she never had a chance. She was put in as a figure head, and run by her Cabinet - all appointed by, you guessed it, Williams. She was set up for personal failure while achieving the goals of others. The ultimate "party pooper". As one friend would put it: "It's a sin". The province's first female premier gutted by the backroom. Sure her attitude and style did not help, but perhaps those were well known attributes.
Kathy Dunderdale will forever be known as Newfoundland and Labrador's first female premier. Like Kim Campbell was Canada's first female prime minister. Both were manipulated by ambition and vanity, and both suffered similar falls from grace. The difference in this province is people pile on - like a high school bully fest. I've been guilty of it myself at times. They won't leave Kathy with one shred of dignity. In the irony of all ironies, and I would argue deliberately so, some people have been crying out for Williams to come back and save them. The very man who orchestrated their pain in the first place with his decisions as premier. The biggest question out of all of this turbulence is this: "Will Newfoundlanders and Labradorians see how they are being manipulated, who is manipulating them, and change the political culture of the province -fundamentally? If the answer is no, then Kathy Dunderdale's sacrifice will have been for nothing. If the answer is yes, then hats off to Kathy Dunderdale.
My experience with Kathy Dunderdale started at the PC convention in October 2010. I watched from 20 feet away as she nominated her choice as Vice President of the Party. It wasn't the "old boys" choice. A moment later, Danny Williams was on his feet and moving directly to his choice. He bent over and wrapped an arm around the shoulder of his choice, whispered in her ear long enough so everyone took notice, and Kathy's choice was scuttled. Symbolic really of the days to come.
When Williams suddenly chose to exit the political scene in December, 2010, Kathy became interim Premier due to her status as Deputy Premier. She claimed publicly she didn't want the job permanently, but no prominent members came forward to challenge. Suddenly there was a rah-rah for her leadership, and the taste of well-stroked ego convinced her to take it on full-time. I challenged her leadership with the required signatures and money, but the backroom boys wouldn't hear of it. A challenge and leadership race wasn't part of their plans. As Chick Chilock said to me, as left my home after spending three hours trying to brow beat me, "I am in the backroom, and we know you'll do the right thing." The right thing being: don't challenge the leadership.
In any case, Kathy took the bait of the backroom, disappeared for a few weeks, and came back a brand new woman. She had a new hair style and had shed dramatic weight in a very short period - leading some to speculate she had a surgery of some sort. She began her term with a soft, diplomatic approach, giving the doctors all they wanted and settling a large dispute with them. She hit a few bumps. Most notably the attempted appointment of Williams' girlfriend to the Offshore Petroleum Board. The attempt to cover up that mess, and the subsequent lies they got caught in, really framed the years to come - incompetence and falsehoods.
Kathy did manage to get through all that, win an election against two very weak opposition parties, and stroll on. She battled for the Muskrat Falls project, getting it through the House, but alienating many along the way with her combative, arrogant style. She pushed through Bill 29 severely limiting access to information in the province. She struck out viciously at opponents of the government as "nay-sayers" and "known critics of the government". She became framed as a sort of unfeeling tyrant.
All that being said, there is something else to be said here. There is no question, for anyone that understands how backroom politics work, that Kathy Dunderdale was set up from the very beginning. In the backroom its the "patsy" or "flak jacket". The patsy being the one that takes the fall for everything, and the flak jacket being the one to take the bullets to protect those really behind the scenes. In Kathy's case she had the unfortunate distinction of being both.
In my estimation, Kathy took the bullets for Danny Williams. Williams made every decision as premier until he left office in 2010 - some would say his decision making never ended. She took all the criticism for Muskrat Falls, Emera, the loan guarantee, etc. Most recently she took the blame for failing electrical infrastructure, crippled by $1.2 billion in cuts to upgrades and maintenance that were authorized in 2009 by her then boss - Danny Williams. She took the heat for mass layoffs in the public service, which had become bloated by massive hiring between 2004 and 2009 - by Danny Williams. She took heat for massive deficits in the public pension plans that were not paid into from 2003 to 2010 (or since) by her boss - Danny Williams. The list goes on and on.
Williams made himself out to be "good time Charlie". While he reigned it was one big party. Spend, spend, spend. During his reign the province would burn through nearly $11 billion in oil money. The massive hyper inflation raised the prices of people's homes and their wages. It was good times. Kathy then had to cut back to save up the 35% down payment needed for Williams' other pet project - Muskrat Falls. She had to put away upwards of $3 billion so the feds would put up their $5 billion loan guarantee. All a part of "Danny's plan" as one adamant PC said to me once.
Yes, the truth about Kathy is she never had a chance. She was put in as a figure head, and run by her Cabinet - all appointed by, you guessed it, Williams. She was set up for personal failure while achieving the goals of others. The ultimate "party pooper". As one friend would put it: "It's a sin". The province's first female premier gutted by the backroom. Sure her attitude and style did not help, but perhaps those were well known attributes.
Kathy Dunderdale will forever be known as Newfoundland and Labrador's first female premier. Like Kim Campbell was Canada's first female prime minister. Both were manipulated by ambition and vanity, and both suffered similar falls from grace. The difference in this province is people pile on - like a high school bully fest. I've been guilty of it myself at times. They won't leave Kathy with one shred of dignity. In the irony of all ironies, and I would argue deliberately so, some people have been crying out for Williams to come back and save them. The very man who orchestrated their pain in the first place with his decisions as premier. The biggest question out of all of this turbulence is this: "Will Newfoundlanders and Labradorians see how they are being manipulated, who is manipulating them, and change the political culture of the province -fundamentally? If the answer is no, then Kathy Dunderdale's sacrifice will have been for nothing. If the answer is yes, then hats off to Kathy Dunderdale.
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:
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:
Tuesday, January 7, 2014
Ego, Arrogance, Incompetence and Crisis
The last week should have been a big eye opener for the people of Newfoundland and Labrador. It began with a stark, and sudden warning that the province would be plunged into rolling power black outs during extremely cold winter weather. People reacted with shock and disbelief when they discovered the outages were caused by "maintenance issues".
At least that was the original story. Planned maintenance on two generators and the breakdown of a third were named as the reason for the rolling black outs. Then it was the extreme weather - which wasn't that extreme. Then a switch yard blew up. Then it was the extreme weather and the maintenance. Then it was planned maintenance that had been delayed due to repairs of another generator. Then it wasn't planned maintenance, but rather maintenance caused by breakdowns. Then it was just plain repairs. As the week progressed so did the story.
The people were enraged. They've been told that the province's energy crown corp, Nalcor, was run by "world class" people, and they didn't need any uppity outsiders telling them what to do. It's a common refrain since Williams became premier here in 2003. They castigated the people who dare spoke in opposition to the obvious flaws in their power concepts and plans as "nay-sayers" and "known critics". Here, castigation is the best form of marginalization. In other words, to dare challenge the plans and actions of the government is somehow being anti-Newfoundland. Williams used to call them "traitors". Dunderdale has stuck with the "nay-sayers". A very small-minded response by very small-minded people.
Then reality hit when the rolling blackouts started happening during normal winter temperatures, and people became infuriated. They wondered out loud why their "world-class" system was not adequate. Nalcor came out with "no worries,its just planned maintenance". The government was absolutely silent. People were not satisfied. The talk talk shows lit up, and began running almost 24 hours a day. The provincial radio station VOCM began running coverage like a mix of CNN and talk-show. People's outrage escalated as a sense of betrayal, and an absence of leadership combined to fuel the fire.
The explanations kept changing, and it became very clear that, instead of being given a clear picture, spin was the order of the day. A deliberate attempt to manage the truth. Mask it. That all changed when the switch yard exploded and three quarters of the Island's population were plunged into darkness and cold. Luckily for rural Newfoundland wood burning stoves are common, and people were able to keep themselves warm. In the urban centers things were different. They suffered more rolling blackouts and the severity of the mass outage was pronounced with their reliance on electrical heating.
Sadly, at least one person, and perhaps more, died during these events as a result of carbon monoxide poisoning - trying to keep their homes warm, but not ventilating them properly. So many people were admitted to hospital for carbon monoxide poisoning that one Eastern Health doctor called it an "epidemic".
Yet, despite the collapse of the fable that the government and Nalcor was in complete control of the "manifest destiny" of the province, Ms Dunderdale and Nalcor refused to accept responsibility. There was no one to be blamed. There was no flaw in the electrical system. There is no flaw in the government's "energy plan". All was as it should be and the people needed to do their part and not use the power that had been trumpeted as "endless".
Confidence has been shaken. The propaganda-like nationalism surrounding electrical power has been severely shaken. The trust with government and Nalcor has been destroyed. After not making one appearance in the first 48 hours of the crisis, Dunderdale suffered so much criticism she held three press conferences in one day - damage control that failed. Yet the government and Nalcor clung to the myth that they can do no wrong. That the whole fiasco was not a "crisis" - even though 71% of the people believed it was in a province-wide radio poll. Dunderdale called it a "critical time" but not a "crisis".
It's all a symptom of the same thing really. Arrogance and incompetence. Too arrogant to admit incompetence, and too incompetent to admit arrogance. Media and some talk shows continuously call this a "bad PR" plan, or the government "out of control of the message". In reality, it's just the most recent example of a crisis in leadership through out the political and, in some ways, business circles of the province. Egos inflated by nationalism, bolstered by arrogance, and rooted in incompetence.
At least that was the original story. Planned maintenance on two generators and the breakdown of a third were named as the reason for the rolling black outs. Then it was the extreme weather - which wasn't that extreme. Then a switch yard blew up. Then it was the extreme weather and the maintenance. Then it was planned maintenance that had been delayed due to repairs of another generator. Then it wasn't planned maintenance, but rather maintenance caused by breakdowns. Then it was just plain repairs. As the week progressed so did the story.
The people were enraged. They've been told that the province's energy crown corp, Nalcor, was run by "world class" people, and they didn't need any uppity outsiders telling them what to do. It's a common refrain since Williams became premier here in 2003. They castigated the people who dare spoke in opposition to the obvious flaws in their power concepts and plans as "nay-sayers" and "known critics". Here, castigation is the best form of marginalization. In other words, to dare challenge the plans and actions of the government is somehow being anti-Newfoundland. Williams used to call them "traitors". Dunderdale has stuck with the "nay-sayers". A very small-minded response by very small-minded people.
Then reality hit when the rolling blackouts started happening during normal winter temperatures, and people became infuriated. They wondered out loud why their "world-class" system was not adequate. Nalcor came out with "no worries,its just planned maintenance". The government was absolutely silent. People were not satisfied. The talk talk shows lit up, and began running almost 24 hours a day. The provincial radio station VOCM began running coverage like a mix of CNN and talk-show. People's outrage escalated as a sense of betrayal, and an absence of leadership combined to fuel the fire.
The explanations kept changing, and it became very clear that, instead of being given a clear picture, spin was the order of the day. A deliberate attempt to manage the truth. Mask it. That all changed when the switch yard exploded and three quarters of the Island's population were plunged into darkness and cold. Luckily for rural Newfoundland wood burning stoves are common, and people were able to keep themselves warm. In the urban centers things were different. They suffered more rolling blackouts and the severity of the mass outage was pronounced with their reliance on electrical heating.
Sadly, at least one person, and perhaps more, died during these events as a result of carbon monoxide poisoning - trying to keep their homes warm, but not ventilating them properly. So many people were admitted to hospital for carbon monoxide poisoning that one Eastern Health doctor called it an "epidemic".
Yet, despite the collapse of the fable that the government and Nalcor was in complete control of the "manifest destiny" of the province, Ms Dunderdale and Nalcor refused to accept responsibility. There was no one to be blamed. There was no flaw in the electrical system. There is no flaw in the government's "energy plan". All was as it should be and the people needed to do their part and not use the power that had been trumpeted as "endless".
Confidence has been shaken. The propaganda-like nationalism surrounding electrical power has been severely shaken. The trust with government and Nalcor has been destroyed. After not making one appearance in the first 48 hours of the crisis, Dunderdale suffered so much criticism she held three press conferences in one day - damage control that failed. Yet the government and Nalcor clung to the myth that they can do no wrong. That the whole fiasco was not a "crisis" - even though 71% of the people believed it was in a province-wide radio poll. Dunderdale called it a "critical time" but not a "crisis".
It's all a symptom of the same thing really. Arrogance and incompetence. Too arrogant to admit incompetence, and too incompetent to admit arrogance. Media and some talk shows continuously call this a "bad PR" plan, or the government "out of control of the message". In reality, it's just the most recent example of a crisis in leadership through out the political and, in some ways, business circles of the province. Egos inflated by nationalism, bolstered by arrogance, and rooted in incompetence.
Friday, January 3, 2014
Alderon's Muskrat Falls Headache
A few weeks ago, Alderon Iron Ore Corp's Mark Morabito went "off his head" during a radio interview with VOCM during an open line radio show. He blasted the provincial government for not passing the environmental process for the Kami mining project in Labrador. He also criticized the failure of Nalcor and the government to sign a power supply agreement and build a $150 million power line system from the Upper Churchill to Lab West (and his mining project). Clearly, that line and power purchase agreement are crucial to the mine moving ahead. Here is an excerpt from Alderon's subsequent press release:
" We were informed of the status of power and various other files under review by the Provincial Government. Following our discussions with the Minister and his officials, we are confident that these matters are being pursued diligently and expeditiously, " says Tayfun Eldem, President and CEO of Alderon. " The Government's approval to build the power line is crucial to Alderon securing the previously announced debt financing and we are pleased that the Premier has expressed her support for the power line."
"Is crucial..to securing...financing." Interesting. All along the story about Alderon and Muskrat Falls has been Alderon doesn't need Muskrat Falls power unless it doubles its production down the road. Now it is suddenly necessary for financing. Of course. Alderon is calling it the "line", but the bottom line is Nalcor has no excess power to send on that line, so it would have to be power created at Muskrat Falls, and relayed through the Upper Churchill, and out to Lab West (and the mine). FYI on the environmental study issue - Alderon has to pay its Chinese partners $3 million a month for each month the approval fails to come through starting January, 2014 (which is now).
So, given the heavy weights behind Alderon, and all the dollars involved, how is it that Nalcor hasn't committed to the power line and a power supply contract to Alderon yet? According to earlier statements the price pure kilowatt hour has been agreed to. The problem is in the amount of power to be supplied. The answer lies in the Power Contract of 1969, and the Water management Agreement.
All Nalcor's, and the provincial government's plans involved implementing the WMA, which would allow Nalcor to take over the operation of the Upper Churchill. With that control, Nalcor could take power almost at whim from the Upper Churchill, and redistribute it as it wanted. For Alderon that would mean a secure power source. Whether Alderon's early founders Forbes and Manhattan were sold a bill of goods on the validity of this plan is uncertain. Who sold them on it? Williams? Altius? Both? It's hard to say right now. When push came to shove, and all the glossy pictures and back slapping were done, reality hit home.
Hydro-Quebec filed suit, which will be heard January 20, 2014. That is a suit Hydro-Quebec is going to win, and when it does, the WMA is not worth the paper it is written on. What does that mean for Nalcor? It means Nalcor will not be able to take 1 MW of power from the Upper Churchill, other than the recall they already have (and is fully consumed). Nalcor knows this. They are playing a very dangerous, and frankly stupid, game of chicken with Hydro-Quebec that we can not win.
What does that mean for Alderon? It means Nalcor can not commit to the power supply, and therefore it means there is no rationale reason to build a $150 million power line system. Unfortunately for Alderon, it has already used the credibility of Forbes and Manhattan's Chinese connections to make inroads - and promises. Now those promises are in serious doubt. Loss of face with the Chinese is a very, very bad thing.
In some ways there is a little poetic justice here. Danny Williams, the former Premier that brought in all the legislation that is now before the Court in Quebec, is also a main player in Alderon. Now his own legislation is hurting Alderon's chances of getting off the ground. Mean while, Dunderdale and company sit on the environmental application, likely as an out for them. It's all a bit of devilish karma coming to bite some people right in the arse. It begs the question: does Alderon have a Plan B to buy power from Hydro-Quebec, and if not why not? Politics is best suited divorced from the board room.
" We were informed of the status of power and various other files under review by the Provincial Government. Following our discussions with the Minister and his officials, we are confident that these matters are being pursued diligently and expeditiously, " says Tayfun Eldem, President and CEO of Alderon. " The Government's approval to build the power line is crucial to Alderon securing the previously announced debt financing and we are pleased that the Premier has expressed her support for the power line."
"Is crucial..to securing...financing." Interesting. All along the story about Alderon and Muskrat Falls has been Alderon doesn't need Muskrat Falls power unless it doubles its production down the road. Now it is suddenly necessary for financing. Of course. Alderon is calling it the "line", but the bottom line is Nalcor has no excess power to send on that line, so it would have to be power created at Muskrat Falls, and relayed through the Upper Churchill, and out to Lab West (and the mine). FYI on the environmental study issue - Alderon has to pay its Chinese partners $3 million a month for each month the approval fails to come through starting January, 2014 (which is now).
So, given the heavy weights behind Alderon, and all the dollars involved, how is it that Nalcor hasn't committed to the power line and a power supply contract to Alderon yet? According to earlier statements the price pure kilowatt hour has been agreed to. The problem is in the amount of power to be supplied. The answer lies in the Power Contract of 1969, and the Water management Agreement.
All Nalcor's, and the provincial government's plans involved implementing the WMA, which would allow Nalcor to take over the operation of the Upper Churchill. With that control, Nalcor could take power almost at whim from the Upper Churchill, and redistribute it as it wanted. For Alderon that would mean a secure power source. Whether Alderon's early founders Forbes and Manhattan were sold a bill of goods on the validity of this plan is uncertain. Who sold them on it? Williams? Altius? Both? It's hard to say right now. When push came to shove, and all the glossy pictures and back slapping were done, reality hit home.
Hydro-Quebec filed suit, which will be heard January 20, 2014. That is a suit Hydro-Quebec is going to win, and when it does, the WMA is not worth the paper it is written on. What does that mean for Nalcor? It means Nalcor will not be able to take 1 MW of power from the Upper Churchill, other than the recall they already have (and is fully consumed). Nalcor knows this. They are playing a very dangerous, and frankly stupid, game of chicken with Hydro-Quebec that we can not win.
What does that mean for Alderon? It means Nalcor can not commit to the power supply, and therefore it means there is no rationale reason to build a $150 million power line system. Unfortunately for Alderon, it has already used the credibility of Forbes and Manhattan's Chinese connections to make inroads - and promises. Now those promises are in serious doubt. Loss of face with the Chinese is a very, very bad thing.
In some ways there is a little poetic justice here. Danny Williams, the former Premier that brought in all the legislation that is now before the Court in Quebec, is also a main player in Alderon. Now his own legislation is hurting Alderon's chances of getting off the ground. Mean while, Dunderdale and company sit on the environmental application, likely as an out for them. It's all a bit of devilish karma coming to bite some people right in the arse. It begs the question: does Alderon have a Plan B to buy power from Hydro-Quebec, and if not why not? Politics is best suited divorced from the board room.
Sunday, December 22, 2013
Borrowing from Peter to Pay Paul - Nalcor, the Government of NL, and Us
The government of Newfoundland and Labrador is about to make us the laughing stock of the country - again. What's the old saying: fool me once, shame on me, fool me twice, shame on you? That is the stunning revelation written by The Telegram's reporter James MacLeod. His story, printed in this Saturday's paper http://www.thetelegram.com/News/Local/2013-12-21/article-3552189/Power-play/1 … says it all - if you read between the lines, and it's not that hard to do.
First off, Nalcor rolls out two new names as reps for the company: Greg Jones (Marketing Manager); and Rob Henderson (Vice-President of something or other). Until now the primary spokesperson from Nalcor has been Vice-President in charge of Muskrat Falls Gilbert Bennett. The other spokesman, on a less frequent basis, has been Nalcor President Ed Martin. Secondly, the announcement comes just before the Christmas holidays, and after the House of Assembly is closed until spring. The most shocking thing though is the message - we are going to be buying power from the US.
Come again you say? We are going to be buying power from the US? Wasn't the plan to be selling power into the US market? The newest twist on the Muskrat Falls fiasco is, in reality, a stunning admission that the Water Management Agreement (WMA) is unconstitutional, and here's why.
Mr. Jones and Henderson state the plan is to allow water to build up in the reservoir, and during this period the dams would be shut down. During the shut down process the province would buy power from the US market. Once the dam reservoir is full, we stop buying power from the US. Sound familiar? It should. It is a seriously bastardized version of the whole "banking" energy plan of the government and Nalcor. Under that deal, enshrined in the WMA, Nalcor would take power from the Upper Churchill when it needed the power and then send the power back during the spring when its reservoir was full, and the dam could operate past 20% firm capacity. This "new" US purchasing of power, in theory, would replace the need for the WMA.
That raises a number of very serious questions, or it should. First, its a stunning admission that the WMA is a deeply flawed document, and the government broke the law by passing it in the first place. If the WMA was legal, Nalcor could take all the power they needed at any time, and according to Nalcor's interpretation, an extra 1500 MW a year on top of that from the Upper Churchill. Obviously, in that case, there would be no need to purchase power from the US or shut a dam down to fill a reservoir. That is the first obvious conclusion. The second conclusion to be drawn is the government is trying to get ahead of the political fire storm which will be ignited when Hydro-Quebec wins their court challenge against us on January 20, 2014. With a US purchase plan they can say that the WMA is no longer of any importance, because they can use the US power to do the same thing - so no biggy.
Then there are some further obvious questions. If the link to Nova Scotia is capable of carrying only 500 MW of power, and 20% of that is being dealt to Emera free for compensation to build the link (25% in the first five years), and Emera has a further option at market rates on the remainder, how will sufficient power be transmitted back from the US on the same line? After all, in theory only, Muskrat Falls is supposed to produce 800 plus MW a year. If say only 300 MW can be transmitted back to Newfoundland from the US, what makes up the 500 MW difference? Well one answer is likely to be: "we don't need all that power now". That seems to be a familiar refrain during this save face at any cost project. A question to that answer would be:" If we don't need that power why are we spending $8-10 billion building the dam?"
The Government of Newfoundland and Labrador is quickly becoming farcical. As we say in this province "too foolish to talk about". But we must. We must talk about it, because it's our financial future on the line. In no other province would a government get away with anything close to the gross incompetence, and spiteful stupidity this government has in this province. The fact that reporter James MacLeod fails to even connect the dots outlined above gives you a hint why they have so far. In any free society, a free and critically thinking press is necessary to hold the government accountable. It's not just up to the Official Opposition. In this province our media, with a few exceptions, simply relays the government message rather than critically challenge it. It's an all too familiar refrain here. This whole issue, including the economics of it, and the impending failure of the WMA in Quebec Superior Court, will play out in the new year. What we need is a press that does not simply repeat what they are told by the government and Nalcor, but actually dissects it. The people need to be "honestly" informed about what is happening to them now and in the future. This terrible admission that we must buy power from the US and shut dams down to fill reservoirs, proves yet again that we can not trust this government.
First off, Nalcor rolls out two new names as reps for the company: Greg Jones (Marketing Manager); and Rob Henderson (Vice-President of something or other). Until now the primary spokesperson from Nalcor has been Vice-President in charge of Muskrat Falls Gilbert Bennett. The other spokesman, on a less frequent basis, has been Nalcor President Ed Martin. Secondly, the announcement comes just before the Christmas holidays, and after the House of Assembly is closed until spring. The most shocking thing though is the message - we are going to be buying power from the US.
Come again you say? We are going to be buying power from the US? Wasn't the plan to be selling power into the US market? The newest twist on the Muskrat Falls fiasco is, in reality, a stunning admission that the Water Management Agreement (WMA) is unconstitutional, and here's why.
Mr. Jones and Henderson state the plan is to allow water to build up in the reservoir, and during this period the dams would be shut down. During the shut down process the province would buy power from the US market. Once the dam reservoir is full, we stop buying power from the US. Sound familiar? It should. It is a seriously bastardized version of the whole "banking" energy plan of the government and Nalcor. Under that deal, enshrined in the WMA, Nalcor would take power from the Upper Churchill when it needed the power and then send the power back during the spring when its reservoir was full, and the dam could operate past 20% firm capacity. This "new" US purchasing of power, in theory, would replace the need for the WMA.
That raises a number of very serious questions, or it should. First, its a stunning admission that the WMA is a deeply flawed document, and the government broke the law by passing it in the first place. If the WMA was legal, Nalcor could take all the power they needed at any time, and according to Nalcor's interpretation, an extra 1500 MW a year on top of that from the Upper Churchill. Obviously, in that case, there would be no need to purchase power from the US or shut a dam down to fill a reservoir. That is the first obvious conclusion. The second conclusion to be drawn is the government is trying to get ahead of the political fire storm which will be ignited when Hydro-Quebec wins their court challenge against us on January 20, 2014. With a US purchase plan they can say that the WMA is no longer of any importance, because they can use the US power to do the same thing - so no biggy.
Then there are some further obvious questions. If the link to Nova Scotia is capable of carrying only 500 MW of power, and 20% of that is being dealt to Emera free for compensation to build the link (25% in the first five years), and Emera has a further option at market rates on the remainder, how will sufficient power be transmitted back from the US on the same line? After all, in theory only, Muskrat Falls is supposed to produce 800 plus MW a year. If say only 300 MW can be transmitted back to Newfoundland from the US, what makes up the 500 MW difference? Well one answer is likely to be: "we don't need all that power now". That seems to be a familiar refrain during this save face at any cost project. A question to that answer would be:" If we don't need that power why are we spending $8-10 billion building the dam?"
The Government of Newfoundland and Labrador is quickly becoming farcical. As we say in this province "too foolish to talk about". But we must. We must talk about it, because it's our financial future on the line. In no other province would a government get away with anything close to the gross incompetence, and spiteful stupidity this government has in this province. The fact that reporter James MacLeod fails to even connect the dots outlined above gives you a hint why they have so far. In any free society, a free and critically thinking press is necessary to hold the government accountable. It's not just up to the Official Opposition. In this province our media, with a few exceptions, simply relays the government message rather than critically challenge it. It's an all too familiar refrain here. This whole issue, including the economics of it, and the impending failure of the WMA in Quebec Superior Court, will play out in the new year. What we need is a press that does not simply repeat what they are told by the government and Nalcor, but actually dissects it. The people need to be "honestly" informed about what is happening to them now and in the future. This terrible admission that we must buy power from the US and shut dams down to fill reservoirs, proves yet again that we can not trust this government.
Monday, December 16, 2013
Nalcor Lies of Omission
What's a lie of omission? A lie of omission is defined as leaving out an important fact when putting forward a story. This is what Ed Martin, President of Nalcor did this weekend on CBC's show On Point. Frankly, I was shocked. Then I was angry - and I remain angry. Here is what was said during the interview:
President Ed Martin:
"If I can just take a brief moment to explain, as briefly as I can, what's really happening there. This is really about the Power Contract with the Upper Churchill, and the Power Contract is really the original contact for 40 years and the extension. In the original contract Hydro Quebec had negotiated the ability to really get the power when they wanted it, you know, at their say.In the renewed contract, in the second part of the contract, it is very clear and different. They get a fixed amount every month, and we've said to them you have to take that, that is what the contract says. They said we would like to have it the first way. We said, well folks, a contract is a contract in this particular case, and you are going to take it that way.
Putting that aside, that's what they are trying to argue. But from our perspective, even if we treated it like the original contract, it has no impact on Muskrat Falls flow, so either way we are fine. So we obviously expect we will win that, that court action, but assuming we didn't, either way we've run the numbers and it's not going to have an impact that's going to hurt Muskrat Falls."
Cochrane:
" So you're 100% certain that nothing Hydro-Quebec is doing in the courts right now will impact your ability to operate Muskrat Falls as intended in your business plan?"
Martin:
" That's correct. They've been operating that plant for fourty years in a certain way, and if they continue to operate that plant in that fashion for fourty years, no impact on the project."
Here is the link if you want to listen to it:
http://www.cbc.ca/news/canada/newfoundland-labrador/what-s-next-for-muskrat-falls-1.2464965
Point one is this, Quebec's lawsuit for a declaration of their rights under the Power Contract is not just solely affecting the Power Contract. Hydro-Quebec is suing, because apparently Nalcor/CFLCo have taken more MW of power from the Upper Churchill, since last June, than they are permitted to under the Power Contract. They are also suing over their right to operate the dam in accordance with their needs, which is what the Power Contract allows them to do. Now ask yourself this: If this Hydro-Quebec lawsuit has nothing to with Muskrat Falls, and especially the Water Management Agreement, then why is Hydro-Quebec suing over their right to operate the dam for only their needs (minus recall)?
It is apparent that Nalcor via CFLCo has been taking more MW than they are allowed to, so they must be doing so based on the Water management Agreement, because prior to that they had no grounds to take extra power. We have yet to be told by our government how much power was taken, and under what authority. However, it is clear that Nalcor is "being too cute" by applying the Water Management Agreement to take power, but not disclosing it to the public they are doing so, or what legal quandary that leaves us in - or expense. In other words, they are fighting a territory fight where the Supreme Court of Canada has already said they don't have territory, and we will pay for it, but they don't seem to care about that.
Martin also states that Quebec has to buy a minimum bloc of power under the renewal contract, and that is true. They have to buy what the average consumption they used over 40 years as a minimum monthly purchase. That's about 3500 MW. What he doesn't say is they take more than that now, and are by law entitled to. Essentially, Martin is not telling the truth here. Hydro-Quebec is not arguing about their minimum buy required. It's clear, spelled out, and they use more anyway. It's a completely false argument presented by Martin. There are only two points they are arguing: 1. Does Hydro-Quebec have the right to all the power created except the recall power? The Supreme Court decided that in 1984, and Nalcor has no right to take anything beyond recall. 2. Does Hydro-Quebec have the right to require the dam be operated to meet their needs, and their needs alone, other than recall power. The Power Contract says they do. In any case, Hydro-Quebec's case has nothing to do at all with how much power hydro-Quebec has to buy. This is just a blatantly false statement from Martin, and it really doesn't fit the criteria for a lie of omission - it's just straight out false.
Then Martin says he is 100% certain that Quebec's court action won't affect the flow for the Muskrat Falls dam. That is another stinker. Consider Nalcor's pre filed evidence to the PUB submitted in 2009:
"Uncoordinated production among the Churchill River facilities could result in either
15 excessive or insufficient water at the lower Churchill facilities. Excessive water will result in
16 spill. Insufficient water to meet delivery schedules will result in excessive drawdown.
17 Either case represents inefficient use of the available water. Flow regulation is therefore an
18 important factor in fulfilling the efficiency policy contained in subparagraph 3(b)(i) of the
19 EPCA...
22 The control of the rate at which water is delivered to a hydraulic generating facility
23 increases the plant’s ability to produce power on demand. The ability to regulate the flow
24 of water is a result of having adequate storage. The degree of flow regulation determines a
25 plant’s firm power and energy capability...
15 Irregular production at Churchill Falls will have different effects on the lower Churchill
16 facilities depending upon the uncontrolled natural inflows at various times of the year. In
17 many months, the lower Churchill facilities would have insufficient water for production
18 requirements during periods of reduced production at Churchill Falls. However, during the
19 spring runoff, there would be excess water, resulting in spillage, during periods of increased
20 production at Churchill Falls. These problems would be compounded if full CF(L)Co delivery
21 of Continuous Energy was scheduled early in one month followed by full production late in
22 the following month.
4 In the absence of a water management agreement, Nalcor would not even have advance
5 knowledge of expected flows from the Churchill Falls facility to enable it to take steps to
6 mitigate spillage through advance drawdown of the lower Churchill reservoirs.
President Ed Martin:
"If I can just take a brief moment to explain, as briefly as I can, what's really happening there. This is really about the Power Contract with the Upper Churchill, and the Power Contract is really the original contact for 40 years and the extension. In the original contract Hydro Quebec had negotiated the ability to really get the power when they wanted it, you know, at their say.In the renewed contract, in the second part of the contract, it is very clear and different. They get a fixed amount every month, and we've said to them you have to take that, that is what the contract says. They said we would like to have it the first way. We said, well folks, a contract is a contract in this particular case, and you are going to take it that way.
Putting that aside, that's what they are trying to argue. But from our perspective, even if we treated it like the original contract, it has no impact on Muskrat Falls flow, so either way we are fine. So we obviously expect we will win that, that court action, but assuming we didn't, either way we've run the numbers and it's not going to have an impact that's going to hurt Muskrat Falls."
Cochrane:
" So you're 100% certain that nothing Hydro-Quebec is doing in the courts right now will impact your ability to operate Muskrat Falls as intended in your business plan?"
Martin:
" That's correct. They've been operating that plant for fourty years in a certain way, and if they continue to operate that plant in that fashion for fourty years, no impact on the project."
Here is the link if you want to listen to it:
http://www.cbc.ca/news/canada/newfoundland-labrador/what-s-next-for-muskrat-falls-1.2464965
Point one is this, Quebec's lawsuit for a declaration of their rights under the Power Contract is not just solely affecting the Power Contract. Hydro-Quebec is suing, because apparently Nalcor/CFLCo have taken more MW of power from the Upper Churchill, since last June, than they are permitted to under the Power Contract. They are also suing over their right to operate the dam in accordance with their needs, which is what the Power Contract allows them to do. Now ask yourself this: If this Hydro-Quebec lawsuit has nothing to with Muskrat Falls, and especially the Water Management Agreement, then why is Hydro-Quebec suing over their right to operate the dam for only their needs (minus recall)?
It is apparent that Nalcor via CFLCo has been taking more MW than they are allowed to, so they must be doing so based on the Water management Agreement, because prior to that they had no grounds to take extra power. We have yet to be told by our government how much power was taken, and under what authority. However, it is clear that Nalcor is "being too cute" by applying the Water Management Agreement to take power, but not disclosing it to the public they are doing so, or what legal quandary that leaves us in - or expense. In other words, they are fighting a territory fight where the Supreme Court of Canada has already said they don't have territory, and we will pay for it, but they don't seem to care about that.
Martin also states that Quebec has to buy a minimum bloc of power under the renewal contract, and that is true. They have to buy what the average consumption they used over 40 years as a minimum monthly purchase. That's about 3500 MW. What he doesn't say is they take more than that now, and are by law entitled to. Essentially, Martin is not telling the truth here. Hydro-Quebec is not arguing about their minimum buy required. It's clear, spelled out, and they use more anyway. It's a completely false argument presented by Martin. There are only two points they are arguing: 1. Does Hydro-Quebec have the right to all the power created except the recall power? The Supreme Court decided that in 1984, and Nalcor has no right to take anything beyond recall. 2. Does Hydro-Quebec have the right to require the dam be operated to meet their needs, and their needs alone, other than recall power. The Power Contract says they do. In any case, Hydro-Quebec's case has nothing to do at all with how much power hydro-Quebec has to buy. This is just a blatantly false statement from Martin, and it really doesn't fit the criteria for a lie of omission - it's just straight out false.
Then Martin says he is 100% certain that Quebec's court action won't affect the flow for the Muskrat Falls dam. That is another stinker. Consider Nalcor's pre filed evidence to the PUB submitted in 2009:
"Uncoordinated production among the Churchill River facilities could result in either
15 excessive or insufficient water at the lower Churchill facilities. Excessive water will result in
16 spill. Insufficient water to meet delivery schedules will result in excessive drawdown.
17 Either case represents inefficient use of the available water. Flow regulation is therefore an
18 important factor in fulfilling the efficiency policy contained in subparagraph 3(b)(i) of the
19 EPCA...
22 The control of the rate at which water is delivered to a hydraulic generating facility
23 increases the plant’s ability to produce power on demand. The ability to regulate the flow
24 of water is a result of having adequate storage. The degree of flow regulation determines a
25 plant’s firm power and energy capability...
15 Irregular production at Churchill Falls will have different effects on the lower Churchill
16 facilities depending upon the uncontrolled natural inflows at various times of the year. In
17 many months, the lower Churchill facilities would have insufficient water for production
18 requirements during periods of reduced production at Churchill Falls. However, during the
19 spring runoff, there would be excess water, resulting in spillage, during periods of increased
20 production at Churchill Falls. These problems would be compounded if full CF(L)Co delivery
21 of Continuous Energy was scheduled early in one month followed by full production late in
22 the following month.
4 In the absence of a water management agreement, Nalcor would not even have advance
5 knowledge of expected flows from the Churchill Falls facility to enable it to take steps to
6 mitigate spillage through advance drawdown of the lower Churchill reservoirs.
11 In the absence of a water management agreement, Nalcor would be required to utilize the
12 water as it became available. Given the limited storage capacity in the Gull Island reservoir
13 (approximately three to four days of maximum flow from the upper Churchill facilities),
14 Nalcor would have to turbine the water and produce energy at the time that it was
15 available; it would be required to “chase the flows” from the upper Churchill. Spills would
16 be likely during the period of the spring runoff, resulting in wasted energy.
Water Management Agreement Application ‐ Pre‐filed Evidence
Page 14
Nalcor Energy
Table 1: Irregular CF(L)Co Production Profile
Continuous Energy – First 20 days of month 4,765 MW
Recall and Twinco 495 MW
Total – First 20 days of month 5,260 MW
Continuous Energy – Last 11 days of month 900 MW
Recall and Twinco 495 MW
Total – Last 11 days of month 1,395 MW
1 The resulting releases into the lower Churchill reservoirs would be as follows for the above
2 production values:
Table 2: Irregular CF(L)Co Production Water Release
Daily Churchill Falls Water Release – First 20 days of month 160 million m3
Daily Churchill Falls Water Release – Last 11 days of month 42 million m3
3 During the March timeframe, uncontrolled inflows into the Gull Island reservoir will be
4 minimal and under average and dry year conditions are as follows:
Table 3: Gull Island Uncontrolled Inflows March
Daily Uncontrolled Natural Inflows – Average Year 6 million m3
Daily Uncontrolled Natural Inflows – Dry Year 0.7 million m3
5 Under average conditions, the resulting production at Gull Island would be 1,519 MW for
6 the first 20 days and 443 MW during the last 11 days of March. During a dry period, this
7 scenario would require production levels of 1,471 MW during the first 20 days of March,
8 and 395 MW during the last 11 days. Consequently, without a water management
9 agreement, Nalcor would be limited to approximately 400 MW of continuous delivery in a
10 long‐term power purchase agreement for Gull Island. Such an arbitrary constraint on lower
11 Churchill delivery schedules is unnecessary and is incompatible with the concept of the
12 efficient use of the resource.
Bottom line, by Nalcor's own filed evidence, with an affidavit sworn by Nalcor's VP Gilber Bennett, the Water Management Agreement is necessary to operate Muskrat Falls at more than 20% capacity. So, when Ed Martin says that should Quebec win in court, and those two principles are ruled void, the entire Water Management Agreement is invalid, and we are screwed. Which, of course is why I have been in Court with them. Ask yourself this: Has Nalcor made Hydro-Quebec's claim or their own Statement of Defence available to the public or media?; Have they made their legal opinions available?; and if no why not? The clear answer is that Nalcor is simply not telling the truth. In some cases they are telling part truths without telling all the truths. In other cases they are simply not telling the truth. Either way, we are being deceived, to our peril, by a government and crown corporation that is meant to defend our interests, and not cripple them.
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:
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.
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.
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:
@davemccarthy707 @pauloram1 that's the premiers decision to make. She had a 4 year mandate.
- @pauloram1 Key word Paul is "Had".
- @edhollett @pauloram1 @davemccarthy707 enough is enough.
- @pauloram1 @edhollett @davemccarthy707 Enough what is enough what? #NLpoli
- @mclabradore @pauloram1 @edhollett @davemccarthy707 stay tuned folks!!!!
Plane fixr 
W McLean 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.
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