Monday, 25 September 2017

SOCIAL PROGRAMS TO BE CRUSHED BY MUSKRAT SUBSIDIES

Guest Post by PlanetNL

PlanetNL2 – Muskrat Will Cause Monumental Government Debt and Social Pressure
In last week’s inaugural PlanetNL, the post-Muskrat rate hike was predicted to rise quickly into the 30-35 c/kWh range and then to continue to spiral upward as the market continually fails to deliver required revenue.  This pricing model should be considered theoretical because it’s too insane to think the Government would actually allow rate runaway to happen and not attempt to intervene with a better alternative that can preserve stability of the market and the survival of the utilities that serve it.

Logically, Government must limit rates to some sustainable level that ratepayers can bear.  They must also not allow the bankruptcy of NL Hydro and the Nalcor companies as this would lead to the evisceration of core Government assets to outside interests.

Government has little choice but to lean heavily on the public purse of the taxpayer to make up the shortfall in utility revenue.


Government on the Hook
Government has the exclusive authority to decide what rate the market might reasonably bear and then accept that the difference must be provided by an operating subsidy.  Two months ago, Premier Ball indicated in an article published by The Telegram that his Government is aiming for a domestic rate of 17 c/kWh and he acknowledges a $400M deficit that Government will have to pay.  A link to the article is provided below in the References section.

The 17 c/kWh level is still 70% higher than rates of recent years and sure to cause substantial energy sales contraction as consumers of all types adapt by reducing consumption and fleeing to non-electric or highly efficient electric heating options.  As explained in PlanetNL1, NL Hydro production and sales would likely plunge from 7000GWh to 5000GWh thereby eliminating any domestic demand for Muskrat Falls power. 

Allowing that industrial customers will get negligible increases on their already deeply discounted rates, the total island system utility revenue will rise from $700 M to about $800M.  

This increase of merely $100M will come into effect with the proposed 13% Hydro rate increases in 2018 and 2019.  Revenue growth from rate increases will be effectively exhausted before Muskrat start-up in 2020.  Muskrat payback shall evidently be allocated 100% to Government.

Measuring the Revenue Chasm
The required utility revenue inclusive of Muskrat payback was shown in PlanetNL1 to be at least $1350 and possibly up to $1550M even with Holyrood fuel savings factored in.  Choosing a value in the middle at $1450M and then subtracting the maximum realistic ratepayer revenue amount of $800M leaves an annual shortfall of $650M. 

To reduce this deficit, the NL Hydro and Nalcor electricity lines of business will be asked to look inside their operations for opportunities to reduce costs or raise revenues in their other markets.  Labour costs will be the biggest target with possible tactics including a salary freeze, wage rollbacks and some layoffs or attrition through retirements.  As over 90% of Hydro revenue occurs in the Newfoundland island market, little will be gained by attempting to raise rates elsewhere.

In total, Hydro and Nalcor could scrape together at most a few tens of millions in operational savings and revenue adjustments leaving Government to face a minimum subsidy in 2021 of $600M.  How then does Premier Ball have it measured at $400M?



Giving Up Dividends
Nalcor has a formal 50-year Muskrat operations cash flow forecast of all dividend income anticipated to be delivered to Government as return on equity: this document, updated by Nalcor since the June 23, 2017 Muskrat project update, was recently obtained through a Request For Information (ATIPP) - a link is provided below.

Before assessing the expected dividends, recall that the Muskrat project was initially promoted to the public as a project ratepayers would affordably pay the entire cost of through reasonable and fair rates while the export cash flows were supposed to be the gravy that would make Government rich.

In the first instance, ratepayers will not find 17 c/kWh affordable and fair.  It will be the highest electricity rate in the country.  In the second instance, in the first year in which payback is required, 2021, the total dividend estimate of $185M is not especially rich.  It’s barely 1.5% on total capital and just 4.6% on the Government’s $4.0B in equity.  These are unimpressive returns.

What’s worse is that Premier Ball seems to be indicating that his Government will decline to accept the dividends – this appears to be how he limits the required subsidy to $400M.  Reading deeper between the lines, if no earnings are returned from the project, there will never be payback on equity: Premier Ball is tacitly acknowledging that Government’s $4.0B equity investment is going to be a complete loss.

Readers are cautioned that while the forecast of dividends does show substantial earnings increases over time, which may encourage them to think the subsidy is temporary, be aware that the Muskrat Power Purchase Agreement (PPA) payments are rigidly set to escalate at a near identical rate.  If electricity rates are to be held to inflation to protect ratepayers, the higher dividends are needed to meet the higher PPA payments.  The $400M subsidy is likely a permanent requirement.


Mega-Debt: The True Cost of Muskrat
The Province’s $4.0B equity investment has bigger problems than just being written off without payback, as terrible as that is.

Government is already deeply in debt and the Muskrat equity has been issued by increasing government long-term debt.  During the project construction period, this debt adds new interest costs on itself – more money is then borrowed to cover these interest costs.  By the Muskrat start date in 2020, the cumulative interest cost on the Muskrat equity is likely to be in the neighbourhood of $500M. 

This $0.5B extra cost within the Treasury is a nasty hit but there are far more costly burdens waiting to happen.  Absent dividend income to pay back the equity investment, a complacent Government will simply borrow more money to pay the subsidies and the growing annual interest costs.  
Long-term financing interest cost sensitivity is huge. The difference between the interest and inflation rate is key to estimating overall present value costs and while presently the Province’s credit rating may allow it to borrow at the low end of the interest spectrum shown, the premium over inflation  will rise substantially if the credit rating declines as it surely will.
The chart following summarizes the estimated present value of the subsidy and the lost equity.  The low end 2% interest premium range is not truly credible for the long haul.  A net loss of $50B or greater would be quite possible.

Severe Societal Consequences
The impact on the Province and all citizens of a $50B loss is largely beyond the scope of this analysis.  One thing is for sure: other program spending in all Government line departments will be severely squeezed. 

Government can’t go on as the big spender and the big borrower.  The Muskrat PPA and contracts are entirely inflexible – Government must contribute whatever subsidy is required or else default and lose everything.  A Government committed to subsidy will instead look at its spending and would be compelled to slash and burn everything else and raise taxes and fees to untested levels.

The implications are overwhelming and public consideration of such a severe worst-case scenario is rare.  Attempts were made to write about it here but deleted – the consequences are inconceivably terrible and there would be better authors to prepare such an overview.  As it is not the recommendation of PlanetNL to go down the road of operating subsidies, it makes little sense to write about how terrible that might be anyway. 

As very capably detailed by a recent report of MUN’s Harris Centre, the province already faces tremendous challenges with aging demographics and the expected population decline of rural regions (both will contribute to energy sales decline by the way).  Those challenges multiply under the weight of long-term Muskrat subsidy and loss even if not to the magnitude of $50B if a loss-saving intervention should occur to the project.

The Harris Centre researchers might wish to consider revisiting its models in their next revision to include a considerably harsher economic scenario than they have allowed for.  One key area to explore is the effect on the Avalon where presently they presently predict modest growth in the next two decades.  As the center of Government and the principal economic region it stands to reason that it would have the most to lose when Government is forced to enact harsh budget austerity measures to slow the growth of debt.  The Avalon region could conceivably suffer the worst impact of all if the researchers input the appropriate variables into their model.

Final Scene
Completion and operation of the Muskrat project ends in two alternative outcomes. 

The first is overwhelming pressure on ratepayers leading to the bankruptcy and loss of NL Hydro and all Nalcor-LCP subsidiaries and their assets – a terrifying prospect in itself. 

The second is long term operating subsidy leading to the horrifying financial ruin of the Province and many of its people.

Neither can be allowed to happen.

The real alternative needing urgent consideration is how to end this useless nightmare of a public utility project.

Next Post
The complete financial write-off and cancellation of the project is presented.  It’s no free ride but it’s the least worst alternative.

References and Reading Material
Muskrat Falls Project, Sources and Uses of Funds, Issued by Nalcor, August, 2017 (see image file below)
ATIPP RFI Dividend Forecast, Issued by Nalcor, Aug.31, 2017 (see Response to ATIPP Request PB/555/2017 file below)

58 comments:

  1. Why is this all hush-hush by government. Should this not be in the wide ranging public domain, especially through the brave media. Is the train rushing to a a steep canyon, with no one at the throttle and no breaks. All on board are told to shut their eyes, cover their ears and be prepared to enter a black hole and beyond that it's anyone's guess. Everyone should be screaming for public debate to try and figure out alternatives, if it's not already too late. But what the heck does ball care he will finish in 2019, and then it becomes a new governments problem. Kick the can down the road as far as possible, be the happy province, play God guard thee...as in the titantic that went down off our shores, the unsinkable best and most expensive technology available in it's time. So it is with muskrat, the unsinkable, most expensive white elephant of it's time, and we are still singing it's praises. Yes, I have said it before, we as a people are incapable of governing ourselves as in 1934. Can Ottawa save us again from our own demise.

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    1. Thank you for the grim but realistic appraisal of the financial implications of the horrendous Muskrat Falls project.

      It was apparent even to a financial neophyte that the finances of the MF project would crush a small ratepayer base, even at the proposed 5.2 billion. It required eviscerating the regulatory function of the PUB and JRP, neither of which were given a financial overview to be able to determine the financial viability of the project.

      It has become clear that both the Consumer Advocate and Auditor General are captured by their political masters and do not perform their public function. They act to exclude evidence on reliability issues and delay an audit and investigation into this disaster. Rather than protecting the ratepayer and taxpayer they protect the authors of this 57 year nightmare.

      It has been most shocking to me that the operating loss for 57 years will probably dwarf the 15 billion (or more) capital costs. To date this has not been considered. Thank you for making this clear.

      I congratulate your clear eyed vision that to abandon this project is the only way to save NL from untold misery. The alternatives as you point out is a Nalcor fire sale and slashed social programs and crushing energy cost.

      I wonder how this will happen with a complicit government, a whipped civil service afraid to speak and a dysfunctional media. Who will charge the feudal mountain and restore democratic government?

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  3. Don't forget everybody all of this investment in the lives of all the workforce and those downstream sit atop QUICK CLAY! Maybe we should have an analysis of what will it will cost if that does not work

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  4. Interesting and alarming article for sure. There is no link to the ATIPPA document at the end of the article as described, however. I would very much like to see that.

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  5. I suggest that we get very persistent with giving out Promissory Note, for I do not and will NOT be paying for MF. http://michaeltellinger.com/promissory-notes/ Also We need to start making POLLIES and take liability-action upon them. I sent an email to ALL MHA's and the next day Steve Kent Stepped down and Earle Mccurdy is now gone. I'm not 100% sure if this was from me sending the email. " I called MP Scott Simms and the Fed Finance minister today. You may want to look into this for the TERMS of UNION are NON-VOID.

    MY FB POST TODAY! 2019!! First Step New INDEPENDENT for Bi-Election MPN!

    "Our Gov can not do anything for we do not have a country, called Canada.

    It's called "Turtle Island" and Canada is a Corporation and we are ALL Shareholders, who do not get divides from the Profits of Canada Corporation creates.

    Even the Terms of Union with NL contract is non-void for we did not join Canada the country, we join Canada the CORPORATION which was unbeknown to ALL the Citizens of NL back in 1949.

    Anyone born in the Corporation of Canada was forced to be there, for our Parents were FORCED to Sign into the Corporation with the false pretense that we would be Citizens of the Country of Canada.

    Yet as Babies, we did not give consent, and unbeknown to our parents, or ourselves that we are not Canadians.

    Country of Canada, ok NOT!

    If you look at any Gov ID Doc you will see that your name is in CAPITAL LETTERS. This is the Artificial Person.

    It IS NOT YOU, you are a Natural Person. YOU NEED TO KNOW THIS when GOING to COURT.

    For if you go representing, the Artificial Person, you will fall under the LAWS of the Corporation of Canada.

    If you go as your Natural Person, your law is ABOVE the LAWS of a Corporation, you have State Law, you have Merchants or Admiralty Law and you have Spiritual or GOD's LAW.

    This is why we swear on the Bible when in court out taking the OATH of OFFICE.

    We are the Beneficiaries, Civil Servants are Trustees.

    We can NO LONGER Trust the Trustees to manage Our Resources, Our Lands. Our waters, and Our Citizens

    https://inpowermovement.com/

    Is Canada a CORPORATION? Canada is a CORPORATION PROOF
    https://www.youtube.com/watch?v=1sJtQDzxX7g"

    PS Search for Canada under filing www.sec.gov
    Hint click on the 8888 and see what other Counties and provinces are Corps as well. CANADA HAS been SOLD OUT the USA PPP's are good for we, NOT!

    Craig G. Lewis"

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    1. Craig this sounds like nativist propaganda and has been dismissed repeatedly by the courts.

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  6. The issue with all of this is that the Government were planning on 400 million from Nalcor to help manage a balanced books in 2021. If the dividend is not there, and there is expectation of another annual subsidy from the tax dollars, we will be running 1 Billion plus deficits for many years to come.

    Lower oil prices will be here for a long time.

    We in this province need to tackle many issues. We must lower our operating costs of running government, by doing things smarter. We must hold those responsible for Muskrat to account, and we need to attract some business.

    We are in desparate times in this province.

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  7. Muskrat Falls is the great redistribution of our oil wealth, to Nova Scotia.

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    1. How does it compare to the stupid "tuition freeze" policy, which has also redistributed wealth to Nova Scotia?

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  8. At least a few million in Hydro cost-savings will come from downsizing the Churchill Falls townsite operations.

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  9. Whats kind of special fools is it that squanders billions endangers human lives while destroying a sustainable source of fish that has been providing for thousands of years?

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    1. A townie lawyer that's who

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  10. I'd still like to know who's really at the helm of this monstrous boondoggle!

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    1. Would that not be a good question to pose to the principles, Stan and Dwight and that guy that wants a free roundabout, every time they appear in public?

      Which one of these jokers is premier? The one that won't show the confidential employees contracts? The one that engineered the whole affair with a reign of terror? Surely not the one that refuses to look under the Nalcor hood and will not honour the agreement with the Labrador indigenous leaders on water levels on the Churchill.

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    2. I see Stan's appointment as strategic in the sense of his background with Fortis. Upon completion of Muskrat, the plan will probably be to transfer the "Asset" at minimal cost, (Remember Atomic Energy transfer to SNC Lavelin?), to a consortium, including Fortis, Hydro Quebec, Emera, etc. This usually is how Goverments make themselves clean and whole, ready to solicit votes for the the next century boondoggle of mega projects. By the way how many workers actually have jobs at Churchill Falls?

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  11. This also applies to the NALCOR assets and power policy for NL

    https://thetyee.ca/Opinion/2017/09/25/Site-C-White-Elephant/

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    1. Great story Robert, thanks. The age of the remote mega project for energy is over. The infrastructure costs to produce and deliver the energy make MF and Site C obsolete.

      In 2013 The Edison Institute an energy industry think tank warned utilities not to build new capacity because of the disruption in production, storage and generation of renewable energy.

      https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0ahUKEwiNjafr-8DWAhUJzxQKHZpyASMQFgg1MAI&url=http%3A%2F%2Froedel.faculty.asu.edu%2FPVGdocs%2FEEI-2013-report.pdf&usg=AFQjCNGfHHAFY4tJvYJU5YroKHgAM95QYA

      Disruptive Challenges:
      Financial Implications and Strategic
      Responses to a Changing Retail
      Electric Business

      Unfortunately these "monstrous hybrids" as Jane Jacobs calls them them, loot the public treasury to meet short term political agendas and no longer have providing a service as their goal. MF and Site C result. I bet there are still politicians with a gleam in their eye wanting to promote Gull Island as the salvation of NL.

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  12. NL ratepayers cannot bear this burden. It is far too much on the shoulders of far too few. A levy may be the only solution, in my opinion. A hydro levy deducted from the income of every working person in the province, if not every PERSON in this province (sorry parents, you'll have to pay for your kids share), but it would amount to a few hundred dollars a month instead of 1000+ for the ratepayer. 13 billion, divided amongst approx. 500K people, over 50 years - this is not including the corporate contributions. I'm not an economist and these are rough numbers, but the 60 or 70 thousand current ratepayers simply cannot do it on their own. We all use the electricity, so we should all pay - unless the whole project/province collapses - I'll hightail it out of this province with my young family WAY before by power bill gets to 1500 a month, which is what it would roughly be by the time is 30 - 35 cents/KWH.

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  13. I don't dispute the fact that Muskrat Falls will have serious economic consequences but there seems to be some double counting here. How can a project costing 13-15 billion generate a present value of debt of $50B? Last time I checked, the present value of $15B in debt is ... $15B. What am I missing?

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    1. You are missing the 57 year operating loss outlined above. Miss that or are you trolling us Bernard?

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    1. Good catch Bernard! We were all sleepy I guess

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    2. I spent my career in finance - this paragraph makes no sense to me

      Beginning in 2021, absent dividend income, Government will have to continue paying the ongoing annual interest on its failed $4.5B equity investment. As in recent years, a complacent Government will simply borrow more money to meet these interest costs. Using a net present value formula to compute this series of escalating payments as a one-time cost (just like the total value of a loan), the public debt is threatened to grow by $15B.

      the present value of $4B in debt is $15B - call that Trolling Bruno. Also, the $400 M is not operating cost, it is what the author calls an annual subsidy - in any event the present value of a 50 year annuity of $400M starting in 2021 is about $20B. And of course the author seems to assume that the project will not generate any revenue over 50 years. Whatever ...

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    3. the present value of $4B in debt is $15B - sorry that was meant as a question, as in , how could that possibly be?

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    4. Is the "revenue" you mention the LOSS for 57 years on ALL the power produced. If it costs 60 to produce a KwH and you sell it for 17, or 23 or 4 to NS, how much "revenue" do you generate?

      Would you call this negative income a (de)generat(e) plan?

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    5. It must be moi who simply has trouble understanding this. My bad. I don't understand how the present value of $4B in debt can total $15B. Also, the future value of $400 M over 50 years is $20B so I don't understand how the present value can total over $30B. But hey, I must be missing something.

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    6. Suppose the final cost of MF is $15B and suppose NL makes Emera whole by paying the $2B for the Maritime Link.. I would assume that NL would not continue operating if revenue does not exceed variable costs - à pretty basic assumption. That would represent an a increase in net debt of $17B. It seems to me that represents a disastrous outcome: but a far cry from $50 B. Moreover, surely the transmission assets have some value - at least to the extent that it would provide access to recall power from Churchill and, heaven forbid, allow the purchase of additional power from Churchill and pave the way for an integrated grid in 2041.

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    7. Bernard, does your idea of an integrated grid provide for an East/West/South feed of Muskrat power to the North American grid? This makes sense to me. It provides for a better resolution of past acrimonius dealings, plus opportunity to better revenue flow. Would this not be a better overall solution to the NL debt laid on the people on the island?

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    8. No I am not referring to anything like that. I am trying to make a very very simple point. I can't possibly understand how the author's calculations. Maybe it's my arteries that are hardening. But how does the present value of $4B in debt become $15B? How does the present value of a 50y annuity of $400 M become over $30B? In other words, how does a project that will cost, you tell me, 15B? $20B? Become a present value burden of $50B? This projects a disaster that will squeeze the budget for a generation but I don't know where the $50B figure comes from. $50B amounts to almost 150% of NL GDP - add that to current net debt of about 50% of GDP and one should conclude that the Province is already insolvent. Like I said, just cuz I don't get it, doesnt make it untrue.

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    9. Fear mongering does not require a proper accurate analysis but rather half truths etc.

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    10. Using Cost Engineering principles; the writer is factoring in very large operating deficits over say 50 years, discounted a say 10%, Present Worth calculations. Order of magnitude of $20B PW suggests about $500M annualized estimated deficit . This becomes the challenge for the operator, (HQ/Fortis/Emera consortium). Similar to the landlocked bitumin in Alberta, Muskrat power will have to find a lucrative market, hence my comments that the existing HQ grid connection from Churchill represents an option. The Northern Peninsula Grid seems to me to be a higher risk; (Storm outages, etc.).

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    11. Agree with Bernard, if someone is asking a legimate question that they do not understand then the onus is on Planetnl or someone else in the know to respond for clarification, if not then the blog contributors become the same as NALCOR and the government, DOES NOT REQUIREA PROPER ACCURATE ANALYSIS BUT RATHER LIES AND HALF TRUTHS ETC...that NALCOR is famous for. As 12:40 might be alluding to.....

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    12. Robert, the Quebec feed has no capacity. A new line would be required.

      Bernard, your "basic assumption" is wrong. NL will HAVE to operate MF at a loss for 57 years. Back loaded I might add to make the late victims of this 57 year fraud pay a disproportionate amount of the bill. This was another SNC Lavalin accounting "novelty" that helped justify the 5.2 billion cost. Imagine the economics at 15 billion.

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    13. So the Muskrat is a stranded asset so to speak, on completion Bruno.

      Better find an industrial complex for Goose Bay to utilize the surplus power.

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    14. Robert, it isn't clear to me that he is talking about annual operating costs. He refers to an annual subsidy of $400M per year for 50 years. The total sum of those payments equals "only" $20B so how could the present value be $30B. What can I say the numbers don't add up in my humble opinion. This project is still a disaster at a total cost of $13B but I don't understand how this project could result in an increase in net debt of $50B.

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    15. Yes Robert local demand is the only way to offset the losses. If they offer mining interests (like ones connected to past premiers) at bargain basement prices more will have to be squeezed from rate/taxpayers. The discount rate for Labrador domestic consumers will be jacked up. It will be the final insult to Labrador.

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    16. Bernard, the author stated the figures included "adjusting for borrowing costs". If you don't keep adding borrowing costs every year, then you are appear quite right on the simpler straight line sums. But if the government goes on to borrow more and more to cover interest costs, then a 50 year financing term has exponential added interest costs that would increase net present value wouldn't it? If interest only equalled inflation (we all want to borrow from that bank) then you could fully discount it. Wouldn't it be a mistake to exclude interest costs - especially if/when the credit rating goes slides into the sewer.

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    17. I am inclined to agree with Bernard that better clarification on this is needed.
      And finding markets for power as Robert says will be useful to avoid the worst demand reductions: how about the grid replacing diesel power on all of coastal Labrador.....perhaps needing Federal help, and beneficial to reduce emissions from fossil fuel. And how about promoting electric cars on the island, to counter the efficient heat pumps energy reductions.
      But not convinced that completing the project makes sense.

      As a side note: this is efficiency week in Nfld and the Take Charge group ( Nfld Power engineeer, Wayne Upshall was on NTV) promoting LED lights as saving 75 percent on energy compared to regular bulbs.
      1. Lighting is such a small fraction of energy used in electric heated homes.
      2. While true that they save 75 percent, compared to regular lights,and more on actual power bills in southern climates....yet it is also true that for Nfld`s climate the LED lights save very little on the actual power bill of electric heat homes.... no more than 20 percent of that expected by using such lights, and may save nothing at all on the yearly overall energy bill.
      While their statement is true,This is a gross misrepresentation by Nfld Power and Nfld Hydro, by stating only part of the story, as to why there is little if any savings. They prey on the ignorance of the customers, as the full truth is not readily apparent.
      If any reader doubts my assertion, I will clarify it. Shame of the power companies to keep up this charade.
      Winston Adams

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    18. PlanetNL here:

      In response to the shock and disbelief on the potential value of the long term borrowing costs, an amendment was submitted today with a graphic representation of possible NPV outcomes. The section hopefully satisfies those who understand NPV best - you are a rare breed. The revision was reviewed in detail with Dave Vardy and Des Sullivan as being quite reasonable.

      Whether the potential is on the low end at $37B loss or the top end at $80B might not matter one bit. For a Province already mired in long term debt, this additional burden is not survivable.

      See you with #3 hopefully next week.

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  16. Well, if the reduction in energy sales on the island is about right, which seems likely, then this suggest a reduction in winter peakload from about 1750 MW to 1225, so about 525 Mw reduction. Holyrood only has a net output of about 460MW and only now averages 350 MW in wintertime..........so Holyrood is unneeded just by having prices at 17 cent power, and 15 billion saved.
    With winter peak of 1225 ,we have about 1100 Mw of island hydro and 54 MW of wind now.
    17 cent power would have been a windfall for big dividends to government from Nlfd Hydro each year, and allowing modest efficiency incentives and moderate wind and island hydro addition.
    In reality of what ifs.........power rates could have increased to only 12 cents and yearly bills stable if proper alternatives were followed.
    Why was there no outrage when told initially that power would be 16.4 cents. That should have been shock enough.......now we have the added billions in MF cost and maintenance and ongoing losses that shock only a few of us yet.
    Our debt appears to be heading to 3 times that of troubled Porta Rico per person basis (73 US billion for 3.5 billion people)
    Meanwhile Porta Rico built a 305 MW hydro project , started in 2010 and completed in 2016 for 1.4 billion US. Muskrat can deliver about 500 MW to the Avalon for about 15 billion Canadian funds, so 3 billion for Muskrat may have been economic, suggesting a 5 fold boondoggle factor.
    Winston Adams

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    1. We could have avoided all this mess with a 25% increase!

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    2. If wishes were fishes you could have quite a scoff Con. What are you doing to expose the ongoing fraud at MF?

      Is it not the role of minstrels in feudal courts to make fun of the emperor?

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    3. Bruno has been a long time posting comments on MF citing our excuse for democracy. Sometimes his comments were deleted or reposted, and of course Patty at VOCM banned him I guess. Danny Williams sued him, I believe.
      His comments are less edgy that original, but, I think still on the mark for the most part.
      I knew first hand of serious concerns of our government systems workings and of what I have read of historic problems, but still considered, at first, that Bruno`s descriptions such as FEUDAL were a stretch........but as time goes on, it seems he is more on the mark than one might have originally thought. It suggests a VERY BACKWARD system, and appears true.
      The recent Democracy Cookbook may have some value, but most from MUN refused to even express in writing a viewpoint on the subject, when asked. And the book itself, some suggest, a feeble attempt on the subject ,from quilt, perhaps, now that we may be about to repeat the situation of 1934,when we agreed to suspend democracy ......that lasted 15 years..... and in recent years MUN stayed silent while this mess of MF was allowed to proceed.......enabled likely by MUN.
      Sad, given that MUN was supposed to be a memorial to the many young men that died in WW1 that we may enjoy freedom and democracy. Makes me wonder whether that memorial has failed it`s purpose........seems so, if we operate as a feudal system.

      Winston Adams

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  17. All of the oil revenues from the offshore of Nl will have to go to pay for this boondoggle. Right now that is a bit a edgy also since Hibernia-the largest field on the Grand Banks-is well over have gone and there haven't been any significant discoveries since the 1980's with the exception of a minor field in the Flemish pass. Unless prices for oil shoot up to the $120 per barrel range, revenues from the offshore won't even fix this problem so we are stuck with it. It is time that we started to lower our expectations around the economies in NL. The lifestyle we are living now is not sustainable with government intervention everywhere. We may have to implement mass layoffs in the civil service and privatization of certain services such as education and healthcare with a hard look into sharing services with the other Atlantic provinces. I don't know but this mess isn't going to clear up itself quickly and to prevent another 1932, there has to be cooperation.

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    1. Ask Danny. He should be able to give a good explanation.

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  18. To Con O`Brien at 7:50
    Power rates go up about 2 percent for each 100 million expenditure by the power companies.......so the 100 million new gas turbine added about 2 percent to rates.
    So 12.7 billion on blended rates is about 23 cent kwh power.
    The what ifs.......
    In 2012, 80 MW of island hydro was identified and about 150 MW of wind could have been added, total in the range of 1-1.5 billion, so adding 1 to 1.5 cents per kwh to the 10 cent rate, so 11 to 11.5 cents.
    This would be insufficient to eliminate fully the oil burning at Holyrood, so robust energy efficiency and conservation by customers could achieve the balance.
    Such efficiency comes slowing if rates are only at 11.5 cents. They happen quickly if rates are 17 cents or more.
    For this to happen in a reasonable time frame,while keeping rates at 12.5 cents, incentives to customers are needed. A 1 cent rate premium , so 12.5 cents, gives about 60 million a year for incentives to customers ( now 3 or 4 million is spent on this, the second worst in Canada).
    This one cent per kwh is our money fed back to ourselves to assist with energy reduction, the normal formula being a 33 percent payment of the costs via incentives........ this reduces peak demand by about 40-50 MW per year. If started in 2012, Holyrood use would be down now to about 150 MW instead of 350, and would be down to zero in about 3 years time.
    This is not pie in the sky, as Nova Scotia has followed this formula and doing such achievements.
    But here is the beautiful part of this method: energy saved per household is about 30-35 percent. So , even with rates at 12.5 cents your yearly bill( for electric heated houses) is reduced 30-35 percent, ........so no increase at all, equivalent to power being only about 9 cents.
    Given the power companies are also upgrading our grid,even with these costs the end result would have been equivalnet to about 10 cent power, so yearly bills unchanged from present.
    Such prudent measuresa and assessments were never formally done........as Ed Martin said Nflders were not interested in energy efficiency and conservation! We will see if that holds.
    Meanwhile in a few days , by the end of Sept, I will have 6 month monitoring of my efficient electric heap pump , heating plus AC from April 1 to Sept 30 should be below 100.00 total. Expecting not more than 300.00 for a full year, for 1000 Sq feet of heating ( and I already know this from past less formal power bill data, as the system is now operating for 7 years.
    Most all house will use these within 10 years, driving demand down , as predicted.
    Winston Adams

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  19. Land Protectors have blocked access to Nalcor Bldg , St Johns, according to VOCM

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  20. Don't you sense a fading of the "Old Guard" politicians? Ches, Andy, Baker, Foote,Earle.

    This is as good a time as any for Millenials and Gen X/Y to fill the void. Focus on the 30yr goals; 50% electric vehicles, LEED Silver zero net energy buildings, heat pumps solar/thermal CHPs, etc. Our Grand Children deserve the best from proven Technologies. Life after Muskrat can be grand. Step up young folks!

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  21. http://roguebayman.blogspot.ca

    See what I mean?

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    1. Yeah, tell Bruno that our Dan boy should get his free roundabout now that his Danny boy is elected. What is it they say, ...he that pays the piper calls the tune.

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    2. That sounds disgusting but you are probably right.

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  22. Ches Crosbie now thinks a forensic audit is a good idea.......today at the Muskrat protest at Nalcor bldg......
    Didn`t he previously say a house committee to discuss MF was sufficient..........some leader......almost the last in the province to see the need for that.......after some 7 billion spent more than budgeted.
    Anyone remember the John Crosbie outbursts at the Smallwood schemes wasting mere tens of millions.
    Is Ches angry.......sure do not appear to be.
    Ches always wanted to be James Bond type figure he says...........007
    We once had a Premier Bond, a good man, who helped save this country in it`s hour of need.
    Ches ......How about 7,000,000,000.....the cost overrun for MF.
    Now if Ches did a class action for us all, at 30 percent commission, he could rake in over 2 billion! Of course, unless against Emera and Fortis or the Feds,or Danny then we are just suing ourselves.
    If he did this probono......he might earn the title Chesley Bond Crosbie.....the 7 billion dollar man, and a lasting legacy.
    But first has to show some anger.....real anger .......like when his father said `I never stole the god damm fish`
    Second, find out who stole the 7 billion.
    Third, get it back, or die trying.
    Ches admires Churchill. I fear Ches is no Churchill. Ches is more likely a chicken.........afraid to challenge the clique who is sinking this province. At least Dwight goes by the mane of Ball, but seems to be missing the parts.
    Bond......Robert or James..........go for it Ches, but if the vital parts are not working, and you demonstrate some real passion for the injustice being done, it seems you, too, just represent the status quo......the `Old Guard` as Robert Holmes says.
    PF

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    1. Remember the CBC skit, where Rick Mercer was chased around the house by John Crosbie with a shotgun?

      Come on Rick bye, show me the button to push. You'd stir the water, and make a fine figure, standing for the progressives, and getting the Province back on track.

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  23. I once admired Rick Mercer, taking on this guy Lynch, and much more.
    To mock those in power,( the elites) has value and takes guts...take Ray Guy .......the giant killer.
    But Mercer, on his show became just a stunt man. I tuned out after the first few shows. Maybe CBC wanted to keep him where he did little harm and not rock the boat.
    Not aware that he has ever said a word on Muskrat Falls......a Rat Rant, by him ,as his home province is about to go under, is long overdue.
    Maybe he can reignite that fire in his belly. But we need more than a comedian........and he has said politics is not for him.Yet his rants, locally may go a long way.
    PF

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  24. I refer readers, especially Bernard, to PlanetNL clarification above at time 21:56, least you miss it.
    WA

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