Monday, 26 February 2018

CAN MUSKRAT FLOAT AFTER A BAILOUT?

Guest Post by PlanetNL

PlanetNL7 – Can Muskrat Float After a Bailout
In prior PlanetNL postings, Muskrat economics have been shown to be unaffordable to consumers and a major threat to the solvency and survival of the Government of the Province.  Write-offs are a certainty and there may be many who think the project might look good after that.

Equity write-downs and restructuring of unmanageable debt are well known practices in the corporate world.  Does Muskrat have the potential to avail of such opportunities and would operations then make economic sense? 
………………….


Analysis, Background and Assumptions
The massive spreadsheet behind PlanetNL3 entitled "Muskrat Falls Subsidies Will Cause Gov't Debt Spiral" is employed again to create a series of charts to tell the story.  The fundamentals are the same: two Nalcor ATIPPA information releases provide cost and revenue breakdowns of the massive Power Purchase Agreement and the Nalcor forecast of Dividend and Export Revenue.

Unlike Nalcor, this analysis considers consumers ability to pay and how much power they are likely to use after massive price increases.  Nalcor predicts that electricity sales will not substantially decrease when price potentially more than doubles, but this is irrational propaganda.  Many Newfoundlanders will substitute away from electric resistance heating to something else or simply dial back their usage.  Virtually everyone will find other ways to reduce consumption of non-heating electricity as well.  This analysis assumes a near-30% drop in energy sales from 7000 GWh down to 5000 GWh.

Dissection of the Power Purchase Agreement
Shown below is the 50-year Power Purchase Agreement needed to pay for Muskrat broken down into its primary cost categories [source: Nalcor data].  The biggest slice is the heavily backloaded Return on Equity.  Depreciation is a constant 2% of capital cost per year.  

Interest costs are, as typical, high early and decreasing over time.  These 3 elements are the principal areas targeted in a “write-off” of equity and debt.
  

As step one, equity and depreciation are removed.  Keep in mind this means that the Province’s $4.0B equity contribution is a complete loss and Emera’s $800M in equity must go as well.

When an asset is written down in value, future depreciation must also be reduced.  As the conclusions will show, Muskrat will never plausibly make any money therefore the asset is worthless and there is nothing to depreciate.



The chart below still contains more PPA costs than available revenue, so the next required step is for Ottawa to assume full responsibility for the $5.0B Federal Loan Guarantee signed off by former Prime Minister Harper in 2012 and for the $2.9B approved by current Prime Minister Trudeau in 2016.  This removes interest costs.



At this point, costs are stripped down about as bare as may be reasonably possible.  The relatively small Water Power Rental costs could be construed as being ROE-like Provincial revenue, however, leaving it in does not change the analysis much and it may be argued this amount is a small contingency for unforeseen costs (for example, a source of revenue to provide electricity bill support to many low income people who are going to have serious problems with the steep rate hikes).
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Muskrat Subsidies Will Cause A Gov't Debt Spiral
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Available Revenue – Increased Ratepayer Billings and Exports
As presented in PlanetNL3, two key simple broad-stroke assumptions for estimating ratepayer contributions are (1) energy sales held flat at 5000 GWh and (2) energy price set by the Premier’s publicly stated goal in 2017 for a domestic price of 17 c/KWh in 2021. The energy price is escalated by 2% inflation annually thereafter.  After deduction of non-Muskrat NL Hydro and Newfoundland Power costs, surplus ratepayer cash flow available to pay the Muskrat PPA is calculated and shown as the main component of the chart below. 
Energy export revenues are shown exactly as specified in Nalcor projections.  While more energy is sure to be available for export, Nalcor’s export profit margins are prone to severely decrease – the two issues likely negate each other and therefore no changes to export revenue are made.



Net Earnings After Write-Offs
Finally, the net earnings are calculated by taking the Muskrat revenue and subtracting the revised PPA costs (two charts above).  The results are a mixed bag.


Some positive net earnings potential in the first 20 years indicates that the energy pricing in the model is a little too high.  This would be corrected by holding the price flat at 17 c/KWh until 2029 and only adding some inflation after that.  This spells some minor relief for consumers who will still be seriously hurting from the steep rate hike from 9.7 c/KWh in mid-2016 up to 17 c/KWh in 2021.

The growing losses in the final 20 years will demand price increases greater than the assumed 2% per year during that period to achieve breakeven.

Is This Good?
Breakeven is a generous term because heavy baggage has simply been shifted elsewhere.  The Province has to deal with its $4.0B in unrecoverable equity.  Emera must lose its $800M equity.  Ottawa has to take on $7.9B.  None of these things are good and indeed they leave considerable room for very ill after-effects.

Breakeven also depends on Nalcor’s Operation and Maintenance cost assumptions proving correct and that the quality of the assets is everything they hope it is.  If costs rise, NL consumers are asked to pay more.

The model also doesn’t consider other risks that Nalcor disavows including the strength and longevity of the North Spur, the long transmission lines designed to somewhat modest storm criteria, and a dubious Water Management Agreement contested by Hydro Quebec and still before the courts.

Also consider, this massive Newfoundland energy project isn’t turning out to be for Newfoundland energy needs after all.  Once decreased energy demand becomes a reality in this Province, Muskrat Falls may be completely unnecessary to the energy requirements of this province.  The project will prove to be all about meeting Nova Scotia’s energy needs.  What started out as an agreement where Nova Scotia would receive 20% energy for a 20% cost-share is morphing its way toward 100% energy to Nova Scotia for their 20% cost (or possibly less).

As presently constructed, the Muskrat contracts with Emera have Newfoundlanders paying nearly the entire shot for benefits that accrue exclusively to Nova Scotians.  The economics of export beyond Nova Scotia has become infeasible while Nova Scotia has the potential need for the entire output of Muskrat all by itself for most of the year to offset their dirty coal plant energy production.  Only in the summer season would there be surplus energy to possibly export to the USA and a large portion of that revenue would be lost to transmission fees.


No, none of this is good unless you live somewhere between Yarmouth and Glace Bay.  Having another province finance your future electrical energy security must be a nice feeling.  Or maybe it just feels weird.  Not only that, Newfoundland ratepayers are on the hook for 50 years of operations costs to deliver that power to you – how sweet is that.  Emera and the Nova Scotia Utility and Review Board have wrangled for Nova Scotians the one-sided deal of a lifetime but the deal may prove too one-sided for their own good if they starve the Golden Goose to death.
If Ottawa and Emera Refuse Write-Offs
Taking the Net Earnings chart above and adding back interest costs and Emera’s Return on Equity creates a serious set of losses.  Two things stop this chart from looking far worse.  First is the absence in any way of the NL Government’s $4.0B equity – this is a write-off Nalcor clearly can’t pay back.  Second is that the Province is on the hook to supply Nalcor the major funds required to retire the $7.9B in project bonds – the company won’t get the money from ratepayers therefore it must beg to Government to assume the debt.



Growing Annual Deficits
The Province will be saddled with huge Muskrat costs if Ottawa and Emera don’t participate in the write-offs.  Firstly, the Province must grapple with its $4.0B in lost equity: this failed high-risk gamble was made with borrowed money that will be festering in the Public Accounts and growing heavy interest every year.

Add to this the annual subsidy to Nalcor to cover Muskrat’s losses on operations.  Already deeply in debt, the Province must borrow that money.  Then the Government must start borrowing more money to pay interest cost on the bonds obtained to provide those subsidies. 

As debt is set to be retired inside Nalcor, massive new bonds must be taken out by Government until all $7.9B of debt is eventually transferred to the Province.  For the model, the exact schedule of bond maturity dates is replaced by a simple linear 50yr x $158M/yr rate of debt transfer – only the interest costs are shown below.

The chart below roughly predicts the growth to Government’s annual deficit due solely to Muskrat.  The burden begins at $500M annually.  We may as well forget that it rises exponentially.  The Province is no position to deal with this addition to the deficit and will be in dire straits early in the first decade.


If Ottawa and Emera participate in the full write-down, the picture is still a very problematic one for the Provincial coffers as the interest costs on the lost $4.0B equity will still be due.  Given the present state of finances, even this component alone is not realistically ever going to be paid off by the Province.

Ottawa May be Liable for $12.7B
It is essential to the survival of the Province that a financial restructuring of the Muskrat project take place as early as possible.  The Federal Loan Guarantees must result in the debt being fully taken on by Ottawa.  Emera must bow out of its equity stake.  The Province must write-off it’s project equity.  This is all just the start. 

Barring miraculous unforeseen windfalls, the Province is still mired in a debt crisis from which escape on its own appears impossible.  It is foreseeable that Ottawa will be compelled to bail out the $4.0B in debt attributable to Muskrat.

In negotiating with Emera and Nova Scotia, it is probable that Ottawa will, one way or another, fully relieve Emera for its equity losses.

This adds up to Ottawa becoming fully responsible for the entire capital cost of Muskrat simply because there is no practical alternative.  To defer action and force Newfoundland into deeper losses will make the inevitable Provincial bailout more expensive.

Ottawa and Nova Scotia Must be Held Accountable
For this province, Muskrat appears to be an entirely worthless asset.  Only to Nova Scotia and Emera, who have already completed the Maritime Link and are still dependent on coal for about half their energy, does Muskrat offer any value proposition.

If Muskrat operations are to carry forward, the existing contracts between Emera and Nalcor must be completely revised to reflect the new reality.  Forcing Newfoundland ratepayers to bear the full cost of operations to subsidize Nova Scotians is a nightmare scenario that will breed the worst contempt imaginable.

Muskrat is a complete and total financial wreck and only Ottawa has the capacity to clean it up.  Given their gatekeeper role as project enabler and strategic financier twice over, the result would appear deserving.  They could never deny that they either knew the risks and they should have fully understood that a day of reckoning could likely come straight back to their door.

The question of whether Muskrat Falls operates at all must largely depend on a major renegotiation with Emera and Nova Scotia to pay their fair share of operating costs and liabilities in proportion to the energy they intend to take.  If Nova Scotia and Emera are intent on saying a deal’s a deal and inflicting misery upon Newfoundland, this Province should simply abandon Muskrat entirely and pull the plug.  There may be nothing left to lose at that point.

The tragedy of Muskrat was a purely political act of creation.  It must be political action that corrects it.

78 comments:

  1. I feel like I'm watching a meteorite that's coming straight for us but we are naturally helpless to do anything about it.

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  2. Just how big a hole have we dug for ourselves, having failed to reassess and stop the Muskrat Falls project and with a government committed to finish the project at all costs? Would the forgiveness of provincial equity of $4 billion make the Muskrat Falls project viable? If both the province and Emera abandon any hope of recovering their equity contribution and if the federal government assumed responsibility for meeting interest and repayment obligations to bondholders could revenues cover the remaining costs?
    The Muskrat Falls project will add $800 million in annual cost to the existing $700 million cost of supplying electric power on the Island of Newfoundland. Will revenues from rates recover these costs? PlanetNL concludes that revenues from rates and from the export of power will not come close to covering the massive costs. These costs are mostly: interest on debt guaranteed by the federal government, depreciation, return on equity ($4 billion) provided by the province and by Emera ($800 million), operation and maintenance and fuel costs.
    With doubling of rates demand for power will collapse and revenues may either increase slightly or fall, depending upon how elastic is the demand for power. This is the result of substitution of other energy sources for electricity, particularly replacement of electric heat by more efficient forms of space heating. As rates are increased demand will decline further, eliminating demand for any power from Muskrat Falls and placing the need for Holyrood thermal power in question.
    Would Muskrat Falls power be affordable if all the equity were written off? The answer is no, based on the analysis done by PlanetNL.
    Would Muskrat Falls power be affordable if all equity and federally guaranteed debt were written off? The answer is murky. Revenues might cover costs for the first 15 years but costs would ultimately exceed revenues.
    If the federal government does not agree to pay the bondholders and absolve Nalcor of its debt then the province will be saddled with an annual deficit of $500 million and rising.
    How will the federal government respond? Will it remove the debt burden from the province and offer relief to Emera, who may have to walk away from its investment both in the Maritime Link ($1.6 billion) and in the Labrador Island Link ($800 million in equity)? Will the federals seek to involve Hydro Quebec as a pre-condition for removing the debt burden? What pound of flesh will HQ demand? Muskrat Falls is worth little or nothing but extension of the 65 year power contract will surely take center stage as the quid pro quo in any deal with Quebec.
    The picture painted by PlanetNL is based on data in the public domain. The stark choices presented in this post should be a trigger for an intense public debate on the fiscal solvency and democratic sovereignty of our province. Our province is on its knees and is not in a strong position to negotiate with its three partners, Quebec, Nova Scotia and the federal government.
    We must take control of our destiny. We must have a game plan. Where is the evidence that our government is up to this task? Where does the Commission of Inquiry fit into the game plan?
    Muskrat Falls compounds an existing fiscal dilemma arising from a combined operating and capital deficit of almost $2 billion. The problem is on the expenditure side. We must bring our spending in line with our revenues which are higher than the Canadian average. Before Ottawa comes to the rescue the federal government will demand retrenchment in provincial expenditures. Otherwise they will be seen to be rewarding fiscal irresponsibility. Return to equalization payments is not a realistic option for a province which continues to receive revenues higher than the provincial average. Do we have the wit to escape from this conundrum without once again resorting to colonial status?
    David Vardy

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    1. "Will the federals seek to involve Hydro Quebec as a pre-condition for removing the debt burden? What pound of flesh will HQ demand?"

      That's an excellent question, and reflects somewhat the anxiety/lack of trust NL has toward Quebec.

      I would see the situation differently. Obviously, any "imposed" solution involving HQ would backfire big time, and for your life time. Nobody wants to endure such resentments... There must be other ways.

      What are the assets NL can favorably sell? Obviously, CF. CF has a well known market value (known by both HQ and Nalcor). Maintenance costs, capacity, wheeling costs and transmission losses are well known.

      So NL may just put its 66% ownership on the block and sell it to the highest bidder (or reject the sale if a minimum price is not achieved). This way, we get the assurance that we're not being sc...ed by HQ...

      Next asset: Water rights for the Quebec rivers sourced in lower Labrador. Not sure what kind of money we can obtain here. The current depressed electricity prices, coupled with HQ surplus make it not a timely proposition. Better wait for better pricings.

      For MF, there are currently too many unknowns. If it gets completed (and the North Spur holds tight), maybe we can seek a proposal from HQ to manage it. (But here, HQ has the upper hand - so whatever the price obtained, it will be suspect/debated and politically suicidal for all involved)

      Anyways, we should look into those plan Bs before the Feds take over the administration...

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    2. Maybe that's why the Feds are making changes to the CNLOPB. Our assets are off shore oil royalties. Maybe they have their eyes there and want to get their hands into that. They can skim off the top of oil royalties, and land sales, plus other off shore oil assets. They have stripped us of the fisheries, latest example is grand bank fish pltant. They already have minimine processing requirements. But can't blame them, they have to get their pounds of flesh, in return for taking over the loan guarantees. There are people in Ottawa at the breacurate level, that have that all figured out. They just have to wait for their political masters to approve which assets....says Joe blow.

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    3. Ex-Military Engr. What annual stipend would you accept to cash in ALL of Labrador to Quebec? $1Billion/year? Solves a lot of problems. Gets rid of the white elephant. Enriches the important people on the Avalon, etc.

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    4. Lol....I say bring back Dannie .....the War with Ottawa is about to begin....that flag....and that flag is coming down...

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    5. As a Nflder, One province, Quelabland, sounds fine to me, 7 cent residential power rates will do it, once Ball and the PUB say 17 cents. In 1696 they took it by force, and then France and England fought it out, our west coast still had French rights until the 1900s. Low cost heat will do it, this time we invite them fo rtalks , like the National Convention. And Quelabland would then equal Ontario, and we have real power. Nation building.......we are just too small and inbred, run by a few townie elites, about to bankrupt us.
      My idea, so I deserve a prize, right? Is it really so crazy?
      AG

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    6. @Robert
      Wow, that's a big proposition.

      The white elephant (MF) has no value to HQ for now, too risky. Maybe later.

      Now, for the whole Labrador.

      We may compare it to Nunavik (Quebec northern part). Quebec provides its habitants (Inuits) police, school and health care. There is also a sharing of natural ressources revenues (+local employment requirements in those projects).

      Nunavik is a net financial burden to the province of Quebec. But at least, the Inuits are generally happy dealing with us, so that's all fine.

      Let's compare that to Labradorians who's been told since 1969 that Quebecers/HQ are evil... Those might not be happy campers to begin with.

      Now, take into account the political disaster that would create on the rock. Whatever the price, it would just not be enough. Even at $1B/year, it would be considered as worst than CF.

      Not very optimist here.

      Maybe NL as a whole could join Quebec. If you compare services received by English speaking Quebecers versus the situation in NL, that could be an improvement. (Surprisingly, NLers and Quebecers are pretty similar in mentallity/ values)

      We would need a detailed agreement to ensure that all expections are understood and met.

      For anonymous: we'll provide you a brand new BRP Skidoo every year if you promise us to not bulldoze thru a transmission corridor...

      (OK, don't kill the messenger here :-) )

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    7. Ex-Mil: 7 cent rates and a Skidoo, who can say no, skidoos especially for Labrador region, as Nfld going tropical, especially the Avalon.
      Now to get off on the right tone,we should not say NL join Quebec , nor Quebec join NL, we say we join each other, as equals, much like First Nations want equality. There are many things that are unequal, like we have more fish, and you more hydro power, but like marriage; we join each other.....and sounds better. And to think, when this gets concluded next year, it all started on UG.
      You and I proceed with a memorandum of understanding (MOU)? We will ask for submissions of interpretation from the public?
      AG

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    8. Contrary to trying to maintain self-governance at all costs, I say let the feds take over the admin of NL... NLers have demonstrated time after time that they are incapable of competently governing themselves.

      I for one will be cheering the day that the feds or a commission or whoever is appointed takes over this bloody mess, and those God-damned inept fools are given the boot from power.

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    9. This comment has been removed by the author.

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    10. This is addressed to David Vardy - Any evaluation of NL’s ability to support its net debt, or indeed Planet NL’s evaluation of Nalcor’s future cash-flows, ignore the fact that in 2041, two-thirds of the flows generated by the Upper Churchill cash-cow will accrue to NL. Surely the Upper Churchill represents an asset that is far too large to simply ignore don’t you think?

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  3. What does one say, or do. How can the average Joe comphrend this. Guess the only number the average Joe needs to be concerned with is 17.9 cents, personally. But what is the effect on Joe when the entire results hits the entire economy. Everything else goes up, from the church heating bill to the night club bill added to his beer and everything in between. Does Joe get a double, or a triple wammy???? There will be total reduction in power used from 7000 to 5000GWh, a 30 percent reduction, how does Joe make that cut in his heating, and how much will it cost him personally. Can't freeze in the dark 30 percent of the time. How much will a heat pump cost to install. Yep, minimum wage has to go to 15$ fast, before it is all eaten up with inflation, besides heating cost. Although, I have followed muskrat from the beginning, and knew it was a boondoggle from the beginning, this posting indicates how severe this boondoggle is, and how stupid to do this kind of thing. The best and brightest of this province, aided and abetted by the best in Ottawa, did this to us, how could that be. It wa not only politicians, but people from all aspects of our society, not even careing to take a look or understand what was happening. Too busy on the big booming party of oil money and we were a have province. Could this be called the biggest make work project in the history of mankind.......and not one cent of it paid back ..yet!!

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  4. I believe, based on what I have seen and read, that the bankruptcy of our province is inevitable. There results of this stupidity will significantly increase the number of people leaving. The people remaining will decrease their electricity use in any way possible. And the remaining people will be unable to pay for the increases. The results will be a spiral that will happen in 2020 or 2021. There is no route that provides any positive solution for NLers.

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    1. yes nalcor is unable to repay its obligations, NL govt bailout - oh yes, NL Govt is unable to pay its obligations, CDN govt Bailout. Muskrat Falls was never about economics. If Govt of NL attempts to pass on costs of the boondoogle - many NLers will choose to leave NL and many others will spend the winter in Florida - afterall the savings on electricity avoidance will pay for the 4-6 month stay in the USA. Those that stay are going to substitute and cut consumption of electricity. The fact is the problem is much much greater than predicted. The general economy of NL will be totally devastated if Govt proceeds on Nalcor assumptions.

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  5. This is Danny Williams' legacy....I doubt if Galway will over-shadow Muskrat.

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  6. Emera has a market capitalization of under $10Billion and are an important partner here. Emera Florida, Emera New Mexico, Emera Maine & Emera Caribbean all sound like viable markets. NL pension funds hold enough capital to purchases large voting block of Emera. Gov’t commitment to underfunded liability alone is over $4B. Maybe we should be thinking of holding enough Emera stock in pension funds under administration to secure a few seats on the board and look for further advantageous partnerships?
    No good will come from bailouts...the asset cost and expense to operate Muskrat have now been all but determined. The key to redemption on this project now is to drive revenue....not by increasing rates but through new customers and industry. The future is electric cars, electronic gizmos, drones and robotics all powered by electricity. We can be innovative and grow our customer base enough to get back below our 11cent/kwh? I think we can.
    Think electric ferry service including the Marine Atlantic. Think of greenhouse agriculture to replace our dented and bruised produce, think data storage facilities for giant companies that require cooler climate and air conditioned facilities....think about things that are currently only in science fiction movies like maybe the equivalent of an oil tanker that stores electricity that can go to market anywhere in the world? Maybe?

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  7. Dum da dum dum.
    Dum da dum dum.
    Dum da dum dum.

    It is too late to looking over your shoulders now, boys!
    Davis asks my questions, what are we going to do and who is going to do it?

    I know, let's start a petition to ask Ottawa to save our asses; put a bunch of guys in jail, strip a bunch more of their assets, and agree up front to whatever terms Ottawa dictates.

    Better to live under colonial oppression than die in the cold and dark.

    Isn't it?

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    Replies
    1. Better to live in Nova Scotia...

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  8. And being so cash strapped......
    Ed Martin for his f..k up, is awarded with 6 million
    The guy running the Liquor Corp is awarded , was it 250,000?, and some other undisclosed, and then i assume qualified for his pension.
    Nurses quit one division of health , collect over 200,000 and next month starts work with another division.
    And these are hard times!
    T'was a time when people took on a mortgage for 30 years and finally , after nearly a life time of work , owned their house.
    Now, when approaching retirement, they cash in, and get the value of a free house, or a mansion in Martin's case, rewarded for what/
    So, we dig the hole deeper every day......we have had it too good , too long, and incompetence reigns

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  9. Our Culture.........Liberty often commented unfavourably on Nalcor's culture.
    Now CBC reports it has been asked, what is it about Husky's culture, that if did not disconnect last March when an iceberg came about 600 feet from the rig.
    Answer>>>...money, which we all now , the love of money is the root of all evil.......cause the Bible tells me so.
    To disconnect would mean 7 to 8 weeks to reconnect. The rig had 360,000 barrels of oil on board. The govn makes 200,000 dollars a day in royalities there, so 1.4 million a week. 8 weeks....11.2 million, and huskey's loss wold be perhaps 5 times that.
    Now recently they were suspended for 8 days, for failing to disconnect. So, in the future , it is still much better financially to not disconnect, and risk loss of life and a major oil spill.
    Minister Coady is mum.And wants many more rigs out there, operating with a similar culture it seems.
    Culture....Nalcor has a problem , Husky has a problem. Our govn has a problem.
    And this it the tip of the ice berg, no pun intended.
    What of our culture for mental health? And justice? And reconsiliation with Indigenos , first Nations...etc etc.....
    Culture my man! There lies the problem. Keep the good, get rid of the bad. Culture is a learned thing.......and we take cues from the top. Think......Ed Martin, Dwight Ball, Paul Davis, etc who sets the trend for culture.
    Do we have minister for that........Culture? What is the job requirements? There is more to culture than jannies, or seal flippers.
    Can someone identify good culture and bad culture?
    PF

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  10. Is Bruno not allowed on this blog anymore or is he deliberately boycotting it?

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    Replies
    1. Not sure, but I truly miss his commentary... most of his assertions, especially about the feudal system in place in NL under the pretext of democracy, are bang-on.

      Please come back Bruno, many of us miss your insight. The feet of the powers that be have become too comfortably cool without you there to continue holding them to the fire.

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  11. Five steps to sanity (save our asses;
    1. Sever NF Hydro from Nalcor, shut down Muscrat Falls dam project.
    2. Get a 25 year contract from Hydro Quebec for 500 mega watts of power to go with NL recall power.
    3. Sell excess power to Emera/NS at a profit.
    4. Reset NL ratepayers cost to 10 cents a kwh.
    Tax any difference to go toward interest payments, call it a carbon tax
    Gerry Goodman

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  12. Does anyone believe that Ottawa is eyeing us closely, in terms of what assets they can seize, in return for saving us from ourselves by taking over loan guarantees. What assets do we have??? I don't think they want to interfere with the upper Churchill, that is too complicated, and tangled up with Quebec, and no point in owning muskrat, that's a lost cause, so the only real assets that we have is in the offshore, mainly oil, and fish. Of course not much left in fish, they have already given it all away, Europeans etc. Or such a poor job at management that is almost extinct. So leaves just oil and gas. The Feds have been fiddling around with the CNLOPB, is that in preparation to grab some assets in the offshore, or changes to tha Atlantic accord. Where are our federal mps , if our great fearless leader, shamus, ashamed to appear maybe. Too late to close the barn door when the horse has already left. Don't trust those bureaucrats in Ottawa, they would steal the coppers right off your eyes, the politicians are bad enough. Ball et al, plus mps better start tying some stuff down, before it's gone.

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    Replies
    1. NL voted "en masse" for seven liberal MP's and the SJW prime minister. For some reason you were expecting anything different?

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    2. No, I am not talking politics, I am talking reality. We got ourselves a boondoggle, mainly aided and abeited, by Harper to be exact, he had no love for us and less for Dannie, so as punishment, he gave us enough rope (4.9$ billion) to hang ourselves. So 7 little mps in nl, it doesn't matter who they are, green, red, yellow or blue Ottawa is not be holding to us to get elected in Ottawa, Dannie proved that. But, yes, I know some are blinded by color that they put their whole reason for being in the party. I hope most of us are bigger than that and can put our province first regardless of political strip.

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  13. Much to agree with in the original PlanetNL post and the ensuing discussion:
    - increasing the cost of power will decrease sales
    - a federal bailout will be required and the quantum could exceed the loan guarantee amounts
    - Nalcor needs an agreement with HQ to store capacity and energy seasonally in order to make Muskrat Madness operable
    - HQ doesn't want to own Muskrat Madness for probably 10 strong reasons but they include quick clay and history of poisoned politics in NL

    One element of the PlanetNL thesis I disagree with is the suggestion that Emera give up its equity. I don't see any justifiable reason to treat Emera unfairly in the upcoming insolvency negotiations. Nalcor willingly agreed to Emera's terms. NL has to live with that responsibility.

    When the insolvency negotiations get rolling, the transmission components of the overall Muskrat Madness plan will be important to consider. These assets have value, albeit that value is likely less than the original cost.

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    1. Tom,
      Yes the transmission components have value; Fortis and Emera are like vultures circling, Fortis CEO last year saying they have the money.....and only last year invested some 15 billion to buy transmission assets in the USA.
      And Stan Marshall pushing for completion...to what end, the transmission assets have value.
      Marshall, past CEO of Fortis, with likely 6 percent ownership of Fortis,(believe this was disclosed, but suggested no conflict of interest) the guy worth hundreds of millions I would guess,imagine his yearly dividend earnings, ( not a problem in itself, but a conflict of interest in heading up Nalcor and this project).
      the transmission assets , 5 or 6 billion to build, and will be picked up for less than 1 billion likely, all on the backs of the ratepayer, or average Joe.
      PF

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    2. I think, nalcor, emera, fortis and nl, will all be left out in the cold when negotiations begin. Ottawa, will seize the entire muskrat and transmission, in exchange for the loan guarantee. The real negotiations will be between the Feds and Quebec , and we will become innocent bystanders.

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    3. That may be the best option, that the Feds seize the whole works, but still leaves Nfld with poor reliability of power, given the present transmission arrangement. Eventually the Feds would privatize the assets, being of little value anyway, but could be an important aid to NS getting off coal, which is why this went ahead for the benefit of NS, and Feds climate change mitigation..........but Nlfers paying the entire bill, our dimwitted leaders here with their anti Quebec, and Nalcor world class engineers BS. World class BSers, I give them that.
      Maybe this is why PENG2 says to finish it?
      PF

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    4. PF...as you might note I did reply to Winston on the same or similar comment...reliable power for NL ...if we can negioate...we keep our cheap, reliable, paid for power, and let the Feds and NS take muskrat, loan, lock stock and barrel. And then charge them for their power corridor through our territory. Maybe the best we could hope for, until 2041 and hopefully we have not negioate anything away there with the upper Churchill. And we get our due there whatever it might be. And as I said before I think the Ottawa bureaucrats have this all sorted out in their minds, as most that would have an interest would be from Ottawa and Quebec, and are just waiting to convince their political bosses of the way to proceed. And as you suggest, it might be the best way to go. We would be relieved of the loan guarantee and the cost of operating and maintaining the boondoggle, as well as the power line, when it goes down, including the under water belle isle strait cable.

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    5. Tom,

      As I mentioned above to David Vardy, all of the analysis of the solvability of NL or Planet NL’s analysis of Nalcor’s cash-flows ignores the fact that as of 2041, two-thirds of the revenue from the Upper Churchill will accrue to NL. As you know, the Upper Churchill generates upwards of 7 times the capacity of Muskrat Falls. Surely this asset, one of the largest Hydro-electric generating stations in the world is far too large to be ignored.

      Delete
    6. Bernard, CF about 5400 MW, MF 824 but very short term, only 550 delivered to the Avalon on average, so CF closer to 10 times MF, it seems.
      But is there risk that Nfld would lose CF asset or part of it, as a result of this boondoggle.
      WA

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    7. Sorry Winston, I responded my further down, my bad

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  14. Ok, so that is one asset that Ottawa would be interested in for the loan guarantee, the transmission line from Churchill falls to the Avalon, not sure why, but maybe it would have some value, if power were to flow to the island, either from Churchill or muskrat. Don't think we would have much need for the power, but since the line is there, maybe they can fill it with power to the maratimes, better than nothing for Ottawa.

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    1. Anom, the line goes to the Avalon......why not direct to Cape Breton, as just as short, and they will need all of MF power, if ever operating.
      The Maritime link .....500 MW capacity
      MF only 500 MW average capacity (promoted as 824 MW)
      Existing island power , not MF power going to NS......why is this, because NS wants more reliable,not the unreliable MF power and contracts signed.
      So, with our more reliable and low cost island power going to NS, so yes, this forces us to need MF power, which of course is very expensive and less reliable.
      I think not many know the full skullduggery going on here.
      It will take a few years to see the reliability problems, and then the shit hits the fan, but Ed Martin looked after Ed Martin, and sold us out.
      The upper Churchill is a wonderful benefit in comparison.
      Look at the Nalcor map showing the DC line coming to the Avalon......and ask why, as Nfld did not need this power, NS does, but they got even better......our island power.
      So St John's and the Avalon is on a 1100kw extension cord, supported by 1100 towers, subject to ice loads and salt contamination......all better have lots of back up generators, more DARKNL to follow. Don't take my word......Liberty said the reliability was in question.......and was to be phase 2 of the PUB hearings.........what happened, this part cancelled? Guess we find out after it goes in operation, and Leblanc has filed, so he will not address that.
      Winston Adams

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    2. Agree with you totally Winston, these are all facts. But if and when Ottawa takes over in exchange for the loan guarantee, I know we won't have much negotiationing power, but if we have any at all, or someone tough there to speak for us. That is the one thing they will insist on, that the muskrat link goes directly to C. B, and leave us with our reliable paid for cheap island power. Let the Feds and NS take their chances on the boondoggle. They can take the entire shebang, loan guarantee and all. Maybe we can charge them a little for the power line running through our territority.

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    3. Fine and dandy. But who is negotiating for, and on behalf of the NL ratepayers? Can they be trusted? This is somewhat like NAFTA. Corporatist take the lead. Remember what happened? Canada gave away control of it's Natural Resources in perpetuity to the guys in the White House. Be careful what you wish for.

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    4. Lol Robert, if we don't own the boondoggle, or the loan guarantee, and have our own island paid for cheap power, then our power rates stay the same as now. Harper, and Justin allowed us to build the boondoggle, with their blessing, and in harpers case, for spite, they can have it all back now. We default on it. Let them pick up the pieces, and get what they can out of it. Mainly power for NS rather than dirty coal.

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    5. You miss my point 14:47. Are you comfortable with the negotiating team, and whether or not the "Grand idea" will emerge?

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    6. Well if this ever were to come about, the negotiators would not be the so called nalcor experts, or other traitors . I hope it would be those that have the poeople and province first, and not any self interest. I can think of several identifiable right on this blog. Maybe they would require a few advisors, like an engineer, accountant, and legal begals.

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    7. Agreed. A "Shadow Inquiry" fits the ratepayer needs and profile. Can PUB be relied on at this stage to represent ratepayers?

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  15. I missed the Stan Marshall, presentation, but read the comments of others: UG of Feb 19,: Stan Marshall Doubles Down On Bluster, and followed a link to the Independent so to what others thought, both of Muskrat and Marshall.
    Just yesterday I see the link form UG : Understanding Muskrat : Stan Marshall, I guess what they call the power point presentation.
    What struct me is the photos, as they say a picture is worth a thousand words; Go look.
    1. The photos showing the narrow strip that is the North Spur. This natural material, of sand and some quick clay, how much , no one know for sure. This seems somewhat sable at present. But this is with the water elevation at 21.5 meters. It is to go up another 17.5 meters, so another 57.5 ft higher. Look at that photo and picture the water that much higher, does it give you confidence that this will hold up? Marshall is 100 percent sure. Few share his confidence.
    2. look at the massive switchyards : Soldiers Pond on the Avalon, The one at Muskrat Falls, and another tie in at Churchill Falls.
    3. See the size of the transmission towers, and there ate thousands of them.

    Having worked on the Nfld 230 kv grid in the 1970s, and at Churchill during construction, I can see why Marshall is awestruck with the massive complexity and size of this project, so am I.
    Yet is is for a mere 550 MM on average capacity, for 12.7 billion.
    This is smaller in capacity than our plant at Bay d Espoir, And our entire 2000 MW island capacity of all generation and distribution, of both Nfld Hydro and Nfld power is valued at only 3 billion.
    Gilbert Bennett boosted that they had moved more rock at Muskrat then for the great pyramid at Egypt. (some say that was a make work project).
    So why do I lack the enthusiasm of Marshall, as to his wanting us to see the BIG PICTURE?
    Churchill's words comes to mind, that could be restated this way: "Never in the annals of history, as so much been done to so many , by so few, for so little". This project will go down in infamy. That is the big picture. The scope of the boondoggle is there in the photo presentation. The pictures are proof how big.
    Winston Adams

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  16. On a higher level of thought, when will Justin apologise on behalf of all Canadians for the upper Churchill scandal? Will it be before or after the supreme court ruling?

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    1. Hi, higher level distractor. Why try and distract. You sound like Our Brian. Are you????

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    2. Non, don't really think so .....he is not of such few words....my mistake...

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    3. Don't be ridiculous... no one held a gun to Smallwood's head over the Upper Churchill contract. It's just another lamentable example of NLers' hopeless inability to competently govern themselves.

      Indeed, the NLers that WERE involved in the Upper Churchill giveaway are all living the high life in Panama and Florida now.

      Subsequent politicians have kept alive the myth of Quebec malevolence towards NL because it serves them politically... it's politically safer to keep the Newfie suckers believing their wretched plight is directly a result of Quebec's sinister motives, rather than the chronically piss-poor, inept governance provided by dimwitted and/or dodgy NL politicians.

      Once NLers face up to that reality, they'll have taken a quantum leap towards no longer being their own worst enemy.

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    4. Guess in someways I agree with you. I have several times said on this blog, that we as a people are incapable of governing ourselves. We proved it in the early thirties, and about to prove it again, as we are nearing insolvency.

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    5. Would also add you don't talk of your self as one of us , I.e. Not a Newfoundlander, as you refer to us as ".....Newfie suckers as believing in our wretched plight...." At least I talk as being one of the people and proud do do so...as an average Newfoundland Joe...

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  17. Note that this study recognizes the potential for wind farm generation on the Burin.

    http://thechronicleherald.ca/valleyharvester/1546826-study-looks-at-money-%E2%80%98leakage%E2%80%99-on-a-community-level

    This timely, given that DFO is reducing clam processing jobs in Grand Bank. Step up Premier. Reduce dependence on bunker C power from Holyrood, retain the plant workers. Build some wind power along the wind prone Burin.

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    1. That should be "retrain" plant workers to utility jobs.

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  18. Did Premier Ball consult with his science adviser, Fortis CEO Barry Perry, who said go slow with the carbon tax issue, when announcing plans to double our offshore oil production?
    The Guardian story "Arctic warming : scientist alarmed by 'crazy' temperature rises".
    There is the little issue of the polar vortex, and the jet stream, subjects well known to Ball, a well known environmentalist.
    The polar vortex may be eroding. So what?
    It is what keeps the cold weather up north, separated from the warmer air from the south.
    Parts of Siberia has been 35C above normal lately, for extended periods, while driving the cold air into Europe. Scientists say it is "crazy, weird, and simply shocking'
    To me it is too be expected. It fits the expectation of our planet being an electrical system, right from the iron core and out to the ionosphere.
    These temperature spikes are more frequent and last longer. The question is whether this signals a weakening or collapse of the polar vortex. There is an hypothesis known as 'warm arctic, cold continents" as the polar vortex becomes less stable.
    Can it get worse? Well yes. It can trigger greater warming because of the feedback loop, and potential release of methane , a very strong green house gas.
    Is Charlene Johnson are local expert on this and feedback loops?
    Pray tell, what advise is our leaders getting on these crazy happenings, and is there a mitigation plan?

    Winston Adams

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    1. CJ ..is she one of the original authors of the boondoggle muskrat in Dannie's cabinet, minister of environment at one point, and part of the government at the time of scantion. Omg....is she taking her share of the blame for the boondoggle ???

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  19. At the risk of straying of topic, but hopefully in keeping with UG's motto "Opinions on NL politics that bite"... now here we have yet another lamentable example of the classic Gerry Byrne Bile-laced Blather, yet again enough to make even a billy goat puke… this time regarding his theatrical, over-the-top indignation at rightly being denied a seat at a DFO meeting of federal ichthyologists who are actually qualified to discuss topics related to salmonid ecology.

    http://www.thetelegram.com/news/local/fisheries-minister-gerry-byrne-denied-access-to-dfo-science-meeting-on-salmon-189185/

    Notwithstanding Byrne’s blatant attempts to use pathetically petty politics to co-opt a purposeful meeting of federal fisheries scientists with his ridiculous showboating… note how his finely-crafted, carefully seasoned bile includes the usual attempts to bait the emotions of susceptible NLers with xenophobic undertones playing to the “us against them” mentality reliably roused in NLers prone to that crafty and politically useful tactic… a tried and true method used by cynical NL politicians throughout the history of this wretched rock so as to dupe those abjectly stunned who are sucker enough to fall for it... into rallying to the latest cause d’jour that provides a publicity opportunity for hick showboaters like Byrne.

    Note also how that bile-spouting hypocrite blathers on about his oh-so-caring concern for salmon conservation… as if we’re supposed to believe that DFO’s decision to deny this un-qualified charlatan a seat at a meeting of learned federal fisheries scientists will deprive the Atlantic salmon of its only true champion and Messiahnic saviour… meanwhile the George River caribou herd teeters on the brink of extinction under the so-called “stewardship” of that bloody fool.

    http://www.cbc.ca/news/canada/newfoundland-labrador/newfoundland-government-says-no-to-listing-labrador-caribou-as-endangered-1.4510419

    Gerry Byrne… academically trained as a biologist… politically trained as a colossal bullshitter.

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    1. Just wondering why you would use the very descriptive word to describe our beloved home or "rock" as "wretched". I suspect you do not love this place, or care to call it home, or have lived here such a short period of time that you must see it as wretched. I have noticed recently you or others have called this beautiful island wretched before. I hope you would come to love it as your home, or maybe you are too colourful in your choice of words to appreciate what you are saying.

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    2. I don't suppose Rex ( Murphy) is on this blog!!! .... Or is he?????

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  20. Winston, you are correct, I was comparing actual production at CF to total potential at MF - so I was comparing apples to oranges. The point of course is that according to wiki, CF produces over 35 million MWh annually. We can quibble about how much that production will be worth in 2041 and of course I have no idea how much it would cost to maintain the Upper Churchill. However, if we assume a price of $50 a MWh that would represent revenue of close to $1.8 billion per year, two thirds of which would accrue to NL. My point is that surely Planet NL can’t simply ignore such a potentially massive cash cow when they forecast future insolvency.

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    1. 2041 is 23 years away, a long time if one is short on bread. I would expect bond holders would want to see prudent expenditures by government going forward to let us reach this light at the end of the tunnel.
      50 dollars per Mwh is 5 cents per kwh. I expect it may be worth more if fossil fuel burning is curtailed, but hard to predict that far out. But that this project proceeded when it did, leaves a valuable asset for the future, if we retain it, unlike MF.
      Might CF be part of our economic salvation?
      Winston

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    2. All good points Winston - I am simply saying that it is surprising that Planet NL would forecast spiralling deficits to 2070 with no consideration whatsoever of revenue from the Upper Churchill from 2041 onward

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    3. Bernard, if NL is insolvent in 5 years time, what good is it to claim we may have a windfall in 23 years time? Long distance hydropower transmission could be completely non-compepitive as an export commodity by then. Your implied outlook for UC earnings potential seems much too rosy. Chances are a renegotiation with HQ sees nearly all the revenue go to HQ for transmission fees just as the majority of the Recall Power total revenue does today. Post 2041 UC profit to NL could be quite lean. The plant will be 65 years old and upkeep costs on the rise. Ditto for the transmission lines. It may not be a very enticing picture.

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    4. Legal tests of the 1949 Terms of Confederation, regarding undefined ownership of offshore resources, confirmed "crown asset" attributed under Canadian law belonged to the people of Canada. We must remember that ownership of natural resources essentially rests with the Federal Government. This is being tested again in BC, with respect to pipelines from one province over another's territory. Alberta would argue that Albertans alone "Own the oil". A test case is brewing as to the ownership of Hydro crown assets in Quebec and NL. This will have major impact how the stranded asset, Muskrat, financed by the Feds, will be disposed of. Stay tuned.

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    5. Anon 10:54, I stated specifically that I have no outlook for cash-flows on the Upper Churchill. I stated specifically that I have no idea what it would cost to maintain the facility. I simply stated that it is one of the largest hydro-electric assets in the world and surely one should has to decide what it is worth before claiming NL is insolvent. However, you seem to know the answer to that question and your conclusion is that the Upper Churchill will be basically worthless in 2041. Fair enough, if it is worthless we can safely ignore it. Robert, sorry I have no idea what you are talking about. Are you saying the federal government could claim ownership of Provincial hydro assets? Hmmm that would cause a stir. Perhaps you can elaborate.

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    6. Bernard, Canadian history is fraught with determining how the politics play out when sovereignty over crown assets are the issue. In your own province, regarding the possibility of separation, it became evident that crown assets in Quebec was "owned" by the people of Canada. An accommodation or persuasion was made politically through the usual Federal money trail to avoid a nasty court fight. Same thing happened with respect to Energy East. Here in BC. the Feds have moved swiftly to take approved moneys off the table in Fed funding in efforts to get BC to back down on the opposition to pipelines. It is only a matter of time and political strategy, that the Feds must resolve the NL/Que entanglement. Muskrat will be the poison pill to swallow.

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  21. Planet NL correctly says that Nflders will substitute away from electric "resistance" heating. Resistance heaters are these that have elements: baseboard heaters, fan electric heaters, radiant heaters,electric duct heaters are all resistance heaters that are very inefficient, and of the Model T era design.
    Dave Vardy likewise says there will be a replacement of electric heat by more efficient forms.
    There is already a large uptake of minisplit heat pumps. These use about 65 percent less electricity. 650 MW of our winter peak load is for residential space heat, so this is a potential of 422 MW reduction form this alone. A ICF report for our power companies states that if all efficiency measures are used, it offers a 31 percent reduction of energy needed for the residential sector alone.
    For those that convert to wood or other non electric source,the power company loses all the space heat load from those houses. For heatpumps, which run off electricity, the power companies can retain about 35 percent of their energy sales: for that reason and for reducing peak load, other jurisdictions actively promote HPs with incentives.
    For the record, I spoke with Gilbert Bennett at one of their Holiday Inn PR events,in 2012, and he didn't have a clue about minisplit technology or their ability to heat at low ambient temperatures without resistance heater backup ( yet this on the go for decades). Nor was he interested in knowing about it. So they( Nfld Hydro and Nfld Power) continue to deny its full potential and impact as to the elasticity effect to reduce energy use and peak demand. Their heads are in the sand, and they mislead the public.

    Winston Adams

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    1. Winston if I may comment as well, as Joe, that may be our ace in the hold. Yes, we do have a problem with cash flow at the present time, so we are asking the Feds to take over the boondoggle for the present, which they helped create, and because we will not always be in this position for always, that in 2041 we will have a cash flow from UC, and will be able to pay our way out of this mess. So this situation is temporary. And by the Feds doing the right thing, and assuming their obligations under the loan guarantee, they will take ownership for both the boondoggle as well as the loan, and provide NS with their power, and that will prevent our insolvency at this time.

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    2. Seems to me that Nalcor and our govn hope for a Hail Mary from the Supreme Court of Canada on the Upper Churchill .
      Quebec says a contract is a contract, and that has held so far.
      Nlfd argues that under Quebec civil law, a unfair contract can be adjusted to make it more fair.
      Interesting , if I am right , French civil law comes from Napaloen, yet Quebec, HQ, they say British laws apply. British law says a contract is a contract, but Nfld , long tied to Britain, argues that the French civil law should apply, so we can get redress.
      If Nalcor is successful , then we are indebted to poor old Nalopeon, who seemed to have a fairer system than the British. Yet, did they not find arsenic in Napoleon's hair a decade ago, suggesting that the British poisoned him on Elba , was it?
      Oh, the shame. A win at the Supreme Court , and Ball must apologize to the French, and Quebec, and admit they have more just laws, therefore maybe more civilized, that being civil law.

      Winston

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  22. I believe it’s exactly those crazy conspiracy theories about Fortis and Stan Marshall that put us in this mess in the first place. The NL mentality and paranoia about someone getting ahead so keeps us back.

    Yes, heaven forbid a company like Fortis run this. Heaven forbid a company run by gifted, educated and experienced ppl all of whom from rural NL run this. Heaven forbid the only large cap public company to ever come out of NL run this.

    What absolute BS. Bad enough reading this stuff on the main FB page but to see it in with some pretty decent and educated Blog comments is discouraging.

    For ppl who are paranoid over Marshall: Google what CEOs of public companies earn for goodness sake. Look at their skill set, stellar educational backgrounds and sheer grit that pushed their companies forward. If a family member, a union friend, a senior,or nearly anyone has one dollar in a pension (and we all do via CPP) you rely on these ppl to build the equity. Who do you think more ept to run a company - the govt or the private sector? Look at our history. Look at this Nalcor and MF - how’s that working for us?

    Yes a few hundred thousand is a lot of money to most but peanuts for CEOs of large companies. Yes, Stan is in it for 600k. Good one. Yes it’s all a big conspiracy for Stan to make money off his Fortis shares - good one. What craziness to even try to follow that one through.

    The Nuts we put in power is just a reflection of our society. If anyone can remember, back in the early 90’s privatizing Hydro was mentioned. And the unions and open line crowd went ballistic - Not one of whom have the foggiest clue as to what that even means for the province. What it would of meant was the mess we call Nalcor would never have come into existence and by extension no MF.

    We created another Churchill Falls. Same mentality, same errors and same outcomes. The province has absolutely no business trying to run a business - hello! We haven’t learned that yet?

    And FYI - I have no connection to Fortis or Stan. Never so much as met the man.

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    1. Hear. hear.
      Keith

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    2. 1. CEO of Fortis, Barry Perry, makes about 8 million per year, including all compensation.......according to their financial statements.
      2 Stan retired of course as CEO and took this job for only 600,000.00 a year. He is making good progress, but a Strong Finish is yet to be decided.
      3. Fortis: 15 million tons of GHS per year to the environment.....is that good....
      4. Nfld Power, and Nfld Hydro; second worse in the country for customer energy efficiency and conservation program.....is that good...
      5. Yes, I have a family member who gets a little benefit from Fortis dividends, not much, and other companies pay more in dividends......
      6. Agreed , Fortis would have avoided this boondoggle, and Stan should have been very vocal to point out the many false assumptions......why did he not......
      7. Perry boasted that they have the money and seek opportunities in Nfld........
      8. Yes , Clyde Wells was once part of Nfld Power, and then wanted to take over Nfld Hydro, when he became Premier. But Nfld Hydro was well run then, no boondoggles.
      9. We created worse than CF, much worse. Whose fault.....Leblanc will tell us, will he......
      10 How does Fortis compare with Emera as a corporate citizen giving back.....
      NS took customer conservation away from the power company, and gave it to Efficiency NS, feeding back 50 million a year to customer upgrades, and bringing down peak demand about 40 MW per year. Nfld Power, has a budget of 5 million a year, one third of which goes to useful programs.
      Emera pumped in 3 million a year (30 million over 10 years), of Shareholder money , to assist customer with efficiency improvements. How much does Fortis company do for customers here.......
      Fortis, yes , like a fort, lots for the major shareholders, not so much for Nfld Power workers or the public.
      Winston Adams

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  23. Notwithstanding (and recognizing) Stan's past achievements in the private sector, Stan has since morphed into a new and improved Ed Martin. PERIOD.

    In some ways, even less transparent and a greater risk to the people and the province.

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  24. W. Adans:

    The point I was trying to make is in NL we really frown upon anyone making large salaries. This certainly extends to anyone associated with Govt or a govt dept. In the private sector, CEO’s of successful mid and large sized companies earn extremely high compensation. For some reason we celebrate altletes and entertainers when they earn the big money but frown upon men and women leading the companies that determine success or failure for the masses - including workers and investors. The ppl who become such leaders are often super smart, high IQs and EQs, gifted at organizing and talent management. Anyone with any saving or even CPP rely on these leaders to allocate and control capital. I know a lot of world class CEOs. Most possess exceptional gifts and what they do is not easy. Many burn out early. The public only ever sees the $ and the prestige - but have no idea what these ppl really do. I will say most of the successful CEO’s that I know are humble ppl and follow servant leadership. They are driven and possess the share grit to move companies along and yet are well liked by their ppl.

    I really don’t know much about Marshall other than what’s out there in the public. I will say I see the driven and focused type in him and I really don’t think he cares how the masses see him. He is focused on the task at hand. Not 1% of me believes he has this master plan to make a lot of money off this and it disheartening to see the comments. There must be some level of respect afforded to the man. My guess is he’s doing it for the challenge and to help his province. Most leaders are driven by passion and not fortune.

    I have no doubt the province should not be involved in something the private sector can do. Anyone needing assurance - just look at our history repeating itself.

    But if we are going to be H bent on the province running businesses we have to familiarize ourselves with how to attract and keep the best of the best. You pay 500k to Nalcor and give any leader grief and non stop public ridicule - careful over who you get to lead. Keep expecting them to act the politician - you are gonna get politician types leading.

    Paying 500k is middle management talent with a lot of companies. Note exclusive one off utillirs pay less because they are part monopolies.

    M. Adams:

    There is a lot of misconceptions about privatizing or enabling securitization of a utility. The PUB will control the return. The small premium must be weighted against the ability of a utility to operate more efficiently. This is not giving something away. Based on Nalcor’s moves we definitely should of privatized a long time ago. Especially when they started doing business beyond the original Hydro mandate. The world of mega projects is no place for crown corporations with politicians and civil servants playing the steward: they are just in over their heads under a big whole cloud of Hubris.

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    1. Under Stan, that cloud of Hubris has only gotten bigger (but has certainly changed colour --- from blue to red).

      Just as Ed did Danny's (PC) bidding, Stan is doing Dwight's (Liberal) bidding.

      Any CEO worth his salt would have insisted on conducting a thorough review of the project(so as to bring his or her own experience and good judgement to a course of action that would best suit the needs and be in the best interest of the province).

      Instead, Stan (lock-step in line with Dwight's, Paul's, Cathy's, and Danny's earlier decision) announced almost immediately a plan to put Muskrat back on track, to push ahead and 'finish strong'.

      Dwight changed horses, while we have ended up with the horse's ass.

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    2. An: 77. Just asking a question, not agreeing or disagreeing with you, as I am probably not in the know as much as you. Is HQ not a crown cooperation, they are big and seem to be doing really great. It is my understanding that some of the Norwegian companies, including companies that are government run, or maybe similar to crown cooperations. Of course I stand to be corrected. Are they not doing very well in competing with the private industry oil companies.

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    3. We have China state run corporations buying out senior's homes businesses in the lower mainland. All the top trickle down Tories don't seem to be able to hold back foreign state run "business". Who do you expect to step up and buy Exxon's share of Terra Nova? Ball corp? American State run enterprises, (Trump's Buddies), have control of roughly 2/3 interest in Canadian extraction biz. thanks to the dumb NAFTA, (Mulroney), deal. Enough!

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  25. I believe the largest state own company is Saudi Aramco. Even the Saudi crown prince gives the company more autonomy. Plus recognizing the private sector can run it better they are privatizing . Even the crowd operating under Sharia law gets it. We just do not have the culture, relationship with unions or political leadership to operate business. We have 48 MHAs, hundreds of un-amalgamated tiny communities - we are governed to death. Where are all the leaders suppose to come from in a province of 500k? We are governed to death. Our civil service must run the province while we nit pick over the figure head politicians.

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    1. The civil service does run the province but senior management is politically connected and almost entirely filled with incompetent sycophants. The figure heads are absolutely useless and the civil service is largely clueless. People like Dave Vardy or Des don't exist in any of the departments I've worked for and I hear from colleagues that it would be insane to take a management job and lose union protection because doing a good job in management would get you fired because you'd be at odds with the incompetence around you. Maybe the civil service was more competent many years ago but now it is a pathetic clown show. It is embarrassing to watch. There is a web site called people of walmart which is full of pathetic images that will make you cringe. Well, the performance of the senior civil service is equally cringe worthy. We are in big trouble.

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