Federal Government, Muskrat Falls, Newfoundland discussed on As It Happens from CBC Radio
The muskrat falls hydro-electric project has been called a boondoggle a poorly planned project. whose original six billion dollar price tag has more than doubled but today people in Newfoundland and Labrador got a ray of hope that power will not be as expensive as they feared at least for now this morning? The federal and provincial mentioned governments announced a plan to reduce the projects short term costs a plan that aims to protect hydro users from absorbing the projects cost overruns. Here's Premier Dwight Ball. No government since confederation as faced a tougher challenge. How is it the province that is an energy? Powerhouse could become a province where people are scared to turn the lights on. Thanks to our partnership with the Federal Government. We now have a sustainable long-term solution. Your rates will not go up as a result of Muskrat falls. That's Dwight Ball Premier of Newfoundland and Labrador Ron. Penny isn't celebrating just yet. He's a lawyer lawyer. In the chair of the Muskrat falls concerned citizens coalition. We reached him in Saint. John's Mr Penny. You were there when Premier Ball and the federal natural resources. This Minister Shameless Oregon. Made this announcement today. Does it seem to you like it has good news for new Finland in Labrador. I think the press conference was actually premature. You're essentially what this press. Conference was about was announcing that they were going to enter into negotiations on the financial underpinnings muskrat falls so. We don't know a lot more now than we did before. I think the prisoner held a political necessity because he had promised to make an announcement A The federal provincial deal and they didn't have it so this was an offense away of him. Meeting is political commitment without really telling us very much. The other thing that's happened is that our public utilities board has just answered a serious questions on rate mitigation. And that's just come down so so there's a lot of pressure on the government to to both respond to that and to bring the federal government side as well and that report came out on Friday suggested that it was going to cost a lot more for electricity. Yeah the our interest rates now around thirty cents and this is going to go up to Traumas twenty-three cents so it's roughly seventy percent increase that's projected. It's a real problem for For Newfoundland consumers we have a lot of low income families here and it's going to be very very very tough and along with all of that is. Our fiscal situation is really desperate running a a billion dollar deficit this year and people are rightfully very very worried. You know you. You mentioned this potential. Seventy five percent increase in the premier did say today that hydro users won't see the rates rise because of Muskrat falls so does that not at least provide some relief to hydro users in the province. Will the problem with that is a lot of this is in smoke and mirrors where are transferring Some of the the expenditures that or the requirements revenue requirements back to the taxpayer but the tax payer the ratepayer one on the same mm-hmm so I'm not at all confident that We've arrived at the answer yet and I think the general public of Newfoundland. It's not confident either. And and people have no confidence that rates are not going to go up tremendously. So they're making decisions now as to how they can meet that and one of the ways that people people are acting. And I've done this myself that we're we're all out buying heat pumps mini split heat pumps so he comes very very efficient But the result of that is that the demand for an atrocity. In fact it's going down now and it's going to go down even more and that poses a problem because the revenue requirements is still there so we're in what some people call this a death spiral because if demand goes down you have to increase rates more and as rates go op. Demand goes down even more. So it's IT'S A it's a big big problem. It's also it's a big problem for the for the people of Canada because the federal government and its wisdom Richard we're lack thereof has guaranteed so almost eight billion dollars in loans for the Muskrat falls project So if we can't meet the the revenue requirements and the governor candidates have to step in. Well I wanted to. Maybe you can help us understand that because as I see it. The government of Newfoundland was always going to be on the hook for any cost overruns on Muskrat falls and they've ballooned more than doubled. So what does it mean to the province and its finances if you the federal government is going to perhaps step in one of the thoughts is that they might be able to to extend the financing period. I was very long as it is now but I don't see that the people of the province can actually afford this four to pay for this project and that's why. I say that the people of Canada should be concerned because If we can't the lenders for the project They're fully protected. But the tax payers of Canada aren't it sounds like you're suggesting this is going to be a white elephant. It's already a white elephant. Will question is who's white elephant is going to be. You Know I. I remember there was so much excitement when this thing was announced at least among its proponents thinking this is going to be a great thing for the province and over time public sentiment has definitely soured has. Has the problems have added up. It's interesting you were never as I understand it a believer in this. You're never on side. I WANNA know why we in a few others yes We were great lonely at the time we were opposed from the very beginning. We were concerned about costs. And I had a personal experience because my senior public service both at the provincial and the municipal level and we did a number of alaric projects. Nothing nothing compared to the size of Muskrat falls so I saw what happened with. He's probably checks and I doubt very much that we have the capacity to bring this project in on time dodgers and regrettably I was I right so now the province is is going to be going into further negotiations. It seems with the federal government. Is there anything substantial -sential that can be done to serve reduce the economic impact on Newfoundland and Labrador. So one thing the federal government could do they could take an equity equity position take fifty percent of the equity because the governor of Newfoundland has borrowed almost four billion dollars in order to meet the equity requirements for the approach and that money has got to be paid back so if we can have that and the and the federal government takes half that that would be a big help but even with that. There's not enough money there to bring rates down to the target rate which I think is thirty five cents so big problem and I don't see anything today. That brought us closer to a solution. Mr Penny thank you very much for talking with us. We appreciate it. You're very welcome. bye-bye Ron Penny is a lawyer. A former public servant and the chair of the Muskrat falls concerned citizens coalition. We reached him in Saint John's.