On Feb. 10, Premier Dwight Ball held a flashy news conference to say not very much about how the provincial government was going to keep electrical rates from rising dramatically.
Just about the only thing he did says was to repeat his mantra that rates will somehow not rise — that the Muskrat Falls chickens, huge chickens that they are, won’t be coming home to roost. (You can’t help but wonder if Premier Ball believes that if he says it often enough, it will simply come true.)
On Feb. 12, two days later, energy giant Fortis didn’t hold a news conference to release its annual information report to shareholders, outlining what it sees ahead in the next year for its subsidiaries.
Newfoundland Power used to be Fortis’ main asset — it isn’t anymore. A company that began here now is far, far more than this province’s main electricity distributor.
To reiterate: the province’s most experienced electrical supplier has significant questions about Muskrat Falls, including the supply of electricity and the reliability of the new system and, despite any pronouncements by the Ball government, also expressed uncertainty about the size and timing of rate increases.
Fortis has expanded and prospered across North America into everything from natural gas to solar power to hydroelectric development. One thing it wasn’t interested in? Ever getting involved with the provincial government in the Muskrat Falls project.
But all that growth doesn’t mean Newfoundland Power wasn’t mentioned in this year’s information report.
It was — and the mention was a cautionary one.
“Nalcor Energy’s Muskrat Falls hydroelectric generation development and associated transmission assets are scheduled to be commissioned by the end of 2020. Energy from the Muskrat Falls project is expected to supply a significant portion of NL Hydro’s, and in turn, Newfoundland Power’s, electricity requirements,” the report said.
“Significant uncertainty remains regarding supply adequacy and reliability of the province of Newfoundland and Labrador’s electrical system after commissioning. The amount and timing of future wholesale electricity rate changes, including those associated with the Muskrat Falls project, are uncertain; however, future increases in supply costs from NL Hydro are expected to increase electricity rates that Newfoundland Power charges to its customers.”
To reiterate: the province’s most experienced electrical supplier has significant questions about Muskrat Falls, including the supply of electricity and the reliability of the new system and, despite any pronouncements by the Ball government, also expressed uncertainty about the size and timing of rate increases. But power rates are expected to rise.
There are obviously significant differences between running a provincial government and running a successful, integrated energy company that now has $53 billion in assets. After all, with revenues of $8.8 billion last year, Fortis brought in significantly more money than the entire provincial government did. (The last provincial budget estimates listed revenues from all sources of $6.2 billion.)
So, if you were looking for solid, pragmatic analysis about the current status of what might be happening with your electricity rates when Muskrat Falls comes on stream, would you pick Option Fortis, or Option Ball?
