Muskrat Falls was once touted as a wonderful thing for ensuring stable energy costs for the people of NL. Put simply: hydro power is stable – a waterfall will always fall at a stable rate, generating power with a predictable cost, whereas the ancient Holyrood station is susceptible to the fickle cost of oil.
And Holyrood really does need to be replaced with a new, ideally clean and renewable source of power like Muskrat. Not only because the Trudeau government isn’t likely to allot federal loan guarantees to fossil fuel based power sources, but because rumour has it Holyrood soon won’t be able to meet our growing demand for power. Remember darkNL?
But because we chose Muskrat Falls as that new source of power, and more accurately, because that megaproject is incurring cost over-runs in harsh economic times, and delays, the province might have to as-much-as double power rates to make up for it.
Muskrat is going to cost way more than predicted, and will not be pumping out first power until later than expected. Despite Nalcor’s new CEO vowing to reduce the resulting spike in people’s power bills, a spike in electricity rates seems a likely way we’ll be compensating for the delays and costs of the megaproject.
Newfoundland and Labrador’s consumer advocate Tom Johnson says if government can’t cap Muskrat’s rising costs soon, we’ll be paying twice as much for power in 5-6 years time. Johnson is still an advocate of the megaproject, but feels such a dramatic increase in power bills for the people is unreasonable.
The hope now is that the delays to first power from Muskrat will grant the powers that be time to come up with ways to mitigate the issue. Tom Johnson, for instance, recommended, in a CBC radio interview, that government should “trim back” its own return as a shareholder in Nalcor so the people of the province aren’t paying for the Muskrat debacle.