Progressive Conservative Leader Ches Crosbie wants the Liberal government to refer the issue of how to incorporate Muskrat Falls costs into consumer power rates, keeping rates manageable, to the Public Utilities Board (PUB).
Premier Dwight Ball and Natural Resources Minister Siobhan Coady both said this week the PUB will be involved, even if it’s unclear exactly when and how that will happen. Options on rates are still being developed within government and Nalcor Energy, they’ve said.
In hearing comments coming from government this week, the Crosbie camp contacted The Telegram to say a comment from the premier needed to be corrected for the record.
Crosbie said he’d heard Ball speaking to local media, saying the PCs had not allowed the PUB to do a full review of the Muskrat Falls project.
But that started with a previous Liberal government, Crosbie contends.
“It exempted development on the Lower Churchill from any Public Utilities Board oversight. So, the premier’s remark that it’s a PC responsibility that these matters were exempted is not entirely accurate since the pattern began with a Liberal government,” he said.
Crosbie said it’s something the Tories did address while in office, in putting the project to the PUB anyway (it was given limited review, with the PUB asked to compare only two options to determine which would be the least-cost).
The PUB, under then-chair Andy Wells, reported it could not come to any recommendation without more information. The information it had was described in a final report as not detailed, complete or current enough.
“The board of the day took the position they needed more information. And the government of the day, which was a PC government, took the position that time was of the essence and given the amounts of money involved and the costs of delay, they were not content that the Public Utilities Board should hold another hearing on the matter,” Crosbie said.
“I’m not in a position to second guess that government of the day … but a PC government did decide to use the Public Utilities Board for some degree of oversight.”
Asked if he supported the approach taken, Crosbie said he wants to focus on current discussions and future power rate review.
“The original position was taken by a Liberal government in the year 2000, so it’s a shared responsibility. And I’m saying that now we have to get beyond that and correct what some people think was a wrong way of proceeding, and now ask the Public Utilities Board to be involved,” he said.
At the time Muskrat Falls was referred to the PUB for review, then Liberal leader Yvonne Jones publicly appealed to then premier Kathy Dunderdale and the PC leadership to allow the PUB greater oversight.
“I’m just saying that it was a pattern begun by a previous, Liberal regime. That’s a fact of history,” Crosbie said.
“Everybody has the right to make choices, and choices were made. Right now, I’m saying that Mr. Ball and his Liberal government should choose to make a reference to the Public Utilities Board on the question of optimum rates.”
What is on the books?
Exemptions for the Lower Churchill project have been attributed to the government of Brian Tobin. There is an Order in Council from May 2000 exempting the Labrador Hydro Project from being bound by the Public Utilities Act. Another order from the same day exempts it from the Electrical Power Control Act.
The “Labrador Hydro Project Exemption Order” — setting both into regulation — came at the end of the year, after Tobin had declared he was leaving provincial politics and fellow Liberal Beaton Tulk became premier.
And there were exemptions from full PUB oversight before the Lower Churchill project came along, as noted in an email — an internal response to questions from Premier Kathy Dunderdale — that was provided to her, her press secretary and chief of staff, around the time of the PUB’s partial review.
But you would have to look back more than 30 years to find a power project of over 45 megawatts of potential generation exempted from PUB oversight. The decisions to go ahead with Bay d’Espoir hydroelectric plant for example — still the largest power producer on the island of Newfoundland — and the decision for the Holyrood Thermal Generating Station were both cabinet decisions and did not involve review by the PUB, it noted.
Bay d’Espoir has been in service for over 50 years, beginning in 1967. Holyrood came into service in 1969.
More recent cases of exemption would include the Granite Canal project by Newfoundland and Labrador Hydro, with 41 megawatts of new generating capacity on the Bay d’Espoir hydro system.
Notably, the regulation put in place under Tobin and Tulk was not final. It was not an impassable barrier to the PCs in 2011, as new cabinet decisions could have altered how the Muskrat Falls project was handled.
Was the PUB review of Muskrat Falls appropriate? That’s something evidence at the Muskrat Falls Inquiry will speak to, with evidence already being gathered from various players involved and hearings to begin in September.
The current Liberal government says it is working on how the costs of Muskrat Falls will be handled, given that government has committed to some form of mitigation.
But the question is how much mitigation, when, and where the money will come from.
The PUB has already heard testimony suggesting some ways of mitigating rates.
But the project has yet to be completed, and Coady said this week Muskrat Falls costs will not be factored into rates until 2020.