Friday, March 25, 2011

Poor ol' Hydro-Québec

“And by 2041, just three decades from now, Newfoundland and Labrador will be released from the draconian provisions of the infamous Upper Churchill Contract and able to turn that energy to our own advantage.”
— Lieutenant-governor John Crosbie in his Monday, March 21st Speech from the Throne.
Hydro-Québec's profits dropped more than 12 per cent to $2.52-billion in 2010 due to lower water levels and reduced exports.

Most of that profit came from the Upper Churchill contract, which, in the words of former premier Danny Williams, sees Hydro-Quebec reap “extraordinary and unconscionable profits from our province’s resources.”

In 2008 alone, Quebec made $1.7 billion from the Upper Churchill while NL made approximately $63 million.

Hydro-Quebec buys power from NL for a quarter of a cent per kilowatt hour and then flips it, selling the power for as high as 36 times more than what they pay for it.

The Upper Churchill contract is set to expire in 2016, at which time an automatic 25-year renewal clause kicks in.

Memorial University professors James Feehan and Melvin Baker wrote a 2007 paper on that renewal clause titled Origins of a Coming Crisis, Renewal of the Churchill Falls Contact.

“The findings raise questions of conflict-of-interest, economic duress, and business ethics,” reads the report’s conclusion.

“As the renewal date approaches, both the manner in which the renewal clause came about and the one-sided outcome of that clause ensure that the Churchill Falls Contract will again be a matter of serious dispute involving political and legal dimensions.”

In his speech from the throne earlier this week, Lieut-Gov. John Crosbie said NL will be released from the Upper Churchill contract in 2041.

Let’s hope it’s a hell of a lot sooner than that.

Ideally, the automatic renewal clause is chucked over the falls in 2016.

No comments: