Muskrat Falls cost update hinges on loan guarantee, arm's length report: premier

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ST. JOHN'S, N.L. — New cost estimates for the Muskrat Falls hydro megaproject won't be made public until a federal loan guarantee is final and an arm's-length report is complete, says Newfoundland and Labrador Premier Kathy Dunderdale.

New price projections for the proposed development that will top $6.2 billion were expected in mid-July.

But Dunderdale told reporters Wednesday that those figures are now bound for closed-door meetings with negotiators working out the last details of a promised federal loan guarantee.

After that, Manitoba Hydro International (MHI) will use the latest cost estimates to assess the plan to harness power from Labrador's Lower Churchill River and send it to Newfoundland and Labrador, and Nova Scotia using subsea cables.

The Manitoba analysis along with reports on wind and natural gas options will then be released to the public and opposition parties before a week-long debate in the legislature on whether Muskrat Falls should go ahead.

The timeline?

``I expect all of that to be in play before the month of October is done,'' Dunderdale said.

``I'm hopeful,'' she later added. ``We need to get this loan guarantee business done so that MHI can complete its report, that I can get it in a timely fashion to the people of the province and the opposition parties so they've got some time to see what's in it and do some further analysis. And then we'll go to the house.''

Opposition New Democrats, who've said they'll need about three weeks to review Muskrat Falls reports, cast doubt on that schedule.

And other critics raised questions about the format of the debate.

The 2041 Group, a collection of lawyers and Muskrat Falls skeptics of all political stripes, called Wednesday for a fully informed process that will include expert witnesses who can be questioned in the legislature.

Liberal Leader Dwight Ball has requested similar terms.

But Dunderdale said Wednesday she wants the debate to follow the template for the 2002 special debate on the Voisey's Bay mining project. It did not include questioning of witnesses and was the format preferred by the Liberal government of the day, she noted.

Members of the 2041 Group say Muskrat Falls, unlike Voisey's Bay, is a high-risk prospect and that the province should consider incremental projects or other options to meet power needs.

``It's particularly troubling that in the case of Muskrat Falls, the proponent and the government are one and the same,'' said Dennis Browne, a St. John's lawyer, former consumer advocate and co-founder of the 2041 Group.

Browne said the Dunderdale government and its Crown corporation, Nalcor Energy, have shrugged off reports from both the Public Utilities Board and a joint federal-provincial environmental review panel that Muskrat Falls has not been proven to be a least-cost or even necessary option.

Dunderdale said opposition members will have all the updated information needed to ask informed questions.

``There has been no other project in the history of this province that's ever gotten this kind of scrutiny,'' she said. ``Ever.''

The 2041 Group name refers to the year that the province's contentious Upper Churchill power deal with Quebec comes to an end. The 1969 agreement to ship power from Labrador to Quebec for sale did not reflect rising energy values and has reaped about $20 billion in profits for Quebec, versus $1 billion for Newfoundland and Labrador.

The federal loan guarantee for Muskrat Falls was first promised back in March 2011 when Dunderdale appeared alongside Stephen Harper as he campaigned for re-election as prime minister.

Related talks have dragged on ever since.

``Sometimes when you get negotiators at a table for a certain length of time it requires a push from above to get negotiations concluded,'' Dunderdale said Wednesday.

She said a 40-minute meeting Monday with Harper in Ottawa was ``frank and open'' and that he reaffirmed his support for the loan guarantee. The long wait for confirmation has been fodder for Dunderdale's political rivals who've accused her of muting criticism on a range of federal-provincial issues while negotiations continue.

Organizations: Manitoba Hydro International, Public Utilities Board

Geographic location: Newfoundland and Labrador, ST. JOHN'S, Lower Churchill River Nova Scotia Manitoba Quebec Ottawa

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