Emera Inc. and Nalcor Energy have signed final legal agreements governing the Muskrat Falls power project, formalizing a tentative deal first announced in 2010 and moving it closer to becoming a reality.
Newfoundland and Labrador Natural Resources Minister Jerome Kennedy called it "another important milestone" towards a decision on whether to proceed with the Labrador hydroelectricity megaproject.
Kennedy, flanked by his counterpart from Nova Scotia, took swipes at Quebec, which has long had a contentious relationship with Newfoundland and Labrador on energy issues.
"We’ve been frustrated by them since the days of the Upper Churchill," he said, referring to a disastrous power deal with Quebec dating back to the 1960s.
"Premier after premier, government after government, has tried. So what we’re saying to Quebec is that we are, as a province, willing to work towards a national energy policy and working with Nova Scotia is part of this nation-building exercise."
Kennedy said Newfoundland and Labrador is open to dialogue with Quebec in the future.
"What this is an example of today is how two provinces working together can achieve a result that benefits both," he said.
Nova Scotia Energy Minister Charlie Parker, meanwhile, called the potential project a "game-changing opportunity for the Atlantic region."
It took 20 months to hammer out the 1,500 pages of contract detail in 13 formal agreements governing various components of the project.
All 1,500 pages will be made public, and should be posted online within days.
The final legal documents remain subject to a final decision on sanction, expected this fall, and other regulatory approvals.
Questions remain, including the cost of the project, which was initially set at $6.2 billion, and how much the electricity will cost consumers in Newfoundland and Labrador and Nova Scotia.
Updated figures on estimated construction costs are expected this summer.
More information on costs to Nova Scotia consumers will come in regulatory hearings later this year.
Nalcor CEO Ed Martin said the final legal agreements closely follow the term sheet signed in 2010.
There are some new details, however.
Nova Scotia will get more power in the early years of production — a block of roughly 25 per cent in the first five years, compared to 20 per cent afterwards.
And there is more information on who will pay for any cost overruns.
Nalcor will cover 100 per cent of any overruns related to construction of the dam and transmission lines in Labrador and Newfoundland.
Emera will own a minority share of about 30 per cent of those transmission assets linking Muskrat Falls to the island’s power grid.
Overruns on the maritime link between Cape Breton and Newfoundland, if not approved by Nova Scotia’s utilities regulator, will be split between Emera and Nalcor.
Emera will pick up the first five per cent, Nalcor the next five per cent, with costs split 50-50 after that.
The original term sheet announcement was made at a splashy press conference in St. John’s in November 2010.
Both sides initially gave themselves a year to reach a final deal.
That first deadline passed at the end of November. So did a second, set for Jan. 31.
Nalcor CEO Ed Martin said it was more important to get the work done properly.
"Clearly, it’s been ensuring we have a quality result," he said.
Emera CEO Chris Huskilson called the legal agreements "a step along the way, and something that was a critical next step."
Martin called the Muskrat Falls arrangement "foundational," setting the stage for more future co-operation between the two sides.
"We’re seeing these things as not the end of an arrangement, this is an absolute pure beginning of the development of Newfoundland and Labrador’s resources," Martin said.
One block of Muskrat Falls power, about 20 per cent after the first five years, is reserved for Emera’s use.
In return, the Nova Scotia company is building the maritime subsea link between the two provinces.
Another 40 per cent block is reserved for power needs on the island of Newfoundland.
The remainder can be sold to other markets — Nalcor has reached a pay-as-you-go agreement for access to Emera transmission lines into other Maritime provinces and beyond.
If the project is sanctioned, power is still expected to flow by the end of 2017.