Newfoundland and Labrador Hydro announced an agreement Monday to sell electricity from the Lower Churchill megaproject to consumers in the Maritimes and the northeastern U.S.

The Crown corporation said it has signed a memorandum of understanding with Nova Scotia Power and Emera Inc. "to explore the possibility of bringing energy" to the Maritimes and New England markets.

Ed Martin, president and chief executive officer of Newfoundland and Labrador Hydro, said the utility is seeking 'the right portfolio of markets for the Lower Churchill project.'
(CBC)

Newfoundland and Labrador Hydro, which has been developing the Lower Churchill alone, has been looking for alternatives to exporting power across Quebec.

Hydro president Ed Martin said the new agreement "complements our initiatives currently underway in other jurisdictions [to ensure] we have the right portfolio of markets for the Lower Churchill project that will generate the best value for the province."

Last June, Hydro reached a similar agreement with Rhode Island. As well, it notified the New Brunswick government last February that it may want to move electricity across its territory to other markets.

The Lower Churchill project, which is under environmental review, would if fully developed generate power from two separate locations on Labrador's Churchill River, with a combined output of about 2,800 megawatts, or enough energy to supply about 1.5 million households.

The agreement with Nova Scotia Power and Emera is the latest indication that Hydro — and the Newfoundland and Labrador government — are still seriously pursuing an alternative route for moving power other than going through Quebec.

Newfoundland and Labrador and Quebec have had a contentious relationship for decades over hydroelectric power, mostly because of bitter feelings over the existing Upper Churchill project.

Under that 65-year contract, Quebec has been able to sell inexpensive Labrador-generated power at higher rates to its clients.

Although the Lower Churchill project is a priority for the Newfoundland and Labrador government, Premier Danny Williams only a few weeks ago told CBC News that he thought the project had a 50 per cent chance of success.

Emera wholly owns Nova Scotia Power, as well as Bangor Hydro-Electric Co. It also has hydroelectric investments in Massachussets.