The construction site of the hydroelectric facility at Muskrat Falls, Newfoundland and Labrador is seen on Tuesday, July 14, 2015. As Newfoundland and Labrador Premier Andrew Furey prepares for energy talks with Quebec Premier Francois Legault, a panel recommends the two strike a new Churchill Falls energy deal. THE CANADIAN PRESS/Andrew VaughanPRESS/Andrew Vaughan
ST. JOHNS – As Newfoundland and Labrador Premier Andrew Furey prepares for energy talks this week with Quebec Premier François Legault, an expert panel is recommending the two strike a new Churchill Falls hydroelectric energy deal.
The existing agreement between the two provinces expires in 2041, and a panel assembled last year by the Newfoundland and Labrador government says the province should negotiate a new arrangement with Hydro-Québec.
Legault has made the deal’s renewal a key piece of his energy strategy as the province tries to lower greenhouse gas emissions and meet its growing electricity needs.
He is expected to travel to Newfoundland on Thursday for two days of talks with Furey.
The 1969 Churchill Falls deal allows Hydro-Québec to purchase 85 per cent of the electricity generated at the station in central Labrador — and therefore reap most of the profits. The remaining 15 per cent is used to serve customers on the Labrador system or is sold to export markets.
As of 2019, the deal has yielded close to $28 billion in profits to Quebec, compared to just $2 billion for Newfoundland and Labrador.
The panel issued a statement late Tuesday saying it is committed to protecting the interests of all Newfoundlanders and Labradorians, but it also said it would not be releasing its full report to protect the province’s commercial interests and ability to negotiate.
“Revealing the details of this analysis could compromise the province’s ability to achieve maximum value for the energy, capacity and storage of Churchill Falls,” the panel said. “It is time to get this right, and the work of this panel has started us down that road.”
Aside from a new deal with Quebec, the panel is recommending Newfoundland and Labrador increase sales of electricity both inside and outside the province.
The panel is also recommending that the province ensure Indigenous people in Labrador are properly consulted about the future of the Churchill River.
“As a tremendous source of renewable, low-carbon energy, Churchill Falls electricity offers significant potential towards the achievement of national, regional, and provincial climate change and net-zero emissions goals,” the panel said.
The Churchill Falls facility has a generating capacity of 5,400 megawatts. It produces about 34 billion kilowatt-hours annually.
The generating station and transmission equipment in Labrador is owned and operated by the Churchill Falls (Labrador) Corp. Newfoundland and Labrador Hydro, a Crown corporation owned by the government of Newfoundland and Labrador, owns 65.8 per cent of the corporation’s shares, and Hydro-Québec owns the rest.
While the existing contract expires in 2041, Hydro-Québec will keep its 34.2 per cent share of the corporation.
“Taking lessons from the past, it’s time to look to the future and make decisions that ensure the people of (Newfoundland and Labrador) get the maximum value of this unique and important asset,” the panel said. “There is more planning, consultation, decision-making, and negotiation to come.”
This report by The Canadian Press was first published Feb. 22, 2023.
Editor’s note: Churchill Falls Hydroelectric Generating Facility, with 5,428 megawatts capacity, has more power generating capacity than the entire province of Saskatchewan, combined, if every single coal and gas turbine, every wind turbine are running at 100%, and every solar panel is entirely lit at noon. If Newfoundland actually got a fair deal from its power sales over 50 years ago, it would not have been a have-not province for the last five decades. However, numerous court cases, up to the Supreme Court of Canada, have locked Newfoundland into the deal until 2041, selling power to Hydro Quebec for $2 per megawatt-hour. In New York (which buys power from Hydro Quebec), “Higher fuel costs have led to higher average wholesale electricity prices as well. In February 2022, the average year-to-date wholesale electricity cost was $118.36/Megawatt-hour (MWh), according to NYISO data.”
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