Nfld. & Labrador

Wade Locke regrets Muskrat Falls involvement, says wife warned against it

Economist Wade Locke admitted Tuesday at the Muskrat Falls inquiry he should never have waded into the debate over the controversial project, but stands by his assessment.

'If anything I learned is, listen to my wife'

Memorial University economist Wade Locke testified for three hours Tuesday at the Muskrat Falls inquiry. (Terry Roberts/CBC)

The Newfoundland and Labrador economist who very publicly endorsed the controversial Muskrat Falls hydroelectric project says he never should have waded into the debate.

"If anything I learned is, listen to my wife. She said don't do it. I shouldn't have did it," Locke told the Muskrat Falls inquiry during three hours of testimony in St. John's Tuesday.

Locke is head of the economics department at Memorial University, and became a lightning rod for critics after he came out publicly in support of Muskrat Falls.

Personal attacks not OK

He said the attacks were hurtful, and took a toll on him and his family.

"I've been vilified in the public. It's had an impact on me psychological, emotionally, mentally," Locke said, adding the attacks were not just about his views, but became very personal.

"I get a lot of negative reaction about I'm an overweight guy, I'm a stupid guy, I should be fired from the university for trying to provide a … what I felt was an honestly portrayed assessment of what I felt were the benefits in terms of the least-cost options for this particular project, and that this was a good project to do."

The criticism also left him wondering how it might impact academic independence in the province.

"I'm OK with how I analyzed and presented. What I'm not OK with is the personal attacks that comes along and how that sends a message to young academics at the university so that unless you're going to be on the populist side, you're going to be attacked," said Locke.

I'm OK with how I analyzed and presented. What I'm not OK with is the personal attacks that comes along and how that sends a message to young academics at the university.- Wade Locke

"So what you should do if you're an academic at the university is address issues that will get you promoted, and get you tenured. And those are not the kinds of issues I've been spending my time on."

Locke accused of being a mouthpiece for Nalcor

Locke delivered a presentation in late 2012 — a year before the project was sanctioned — in which he concluded that Muskrat Falls was the best option for the province's electricity needs.

It came during the height of debate as the provincial government and Crown-owned Nalcor moved ever closer to sanctioning the project, which is now billions over budget and years behind schedule.

This is a recent aerial view of the Muskrat Falls project in central Labrador. The project is more than 90 per cent complete, with first power forecasted for late 2019. (Nalcor)

Locke's presentation intensified debate, and led to accusations Locke was a mouthpiece for Nalcor.

Locke also made an embarrassing mistake during his presentation by failing to include the transmission costs for Muskrat Falls power.

"Making mistakes is part and parcel of any analysis you do," Locke said when asked about the error.

That was an error I wish I had back, I would have fixed.- Wade Locke

"You shouldn't be afraid to make mistakes. You shouldn't be afraid to take risks. That was an error I wish I had back, I would have fixed."

Locke addressed this and other criticisms during his lengthy testimony Tuesday, and stood firm on his assessment of the project, saying it was based on information available to him at the time.

"If I had my time back, I would not have got involved because of the nastiness that's involved in this particular project," he said.

He denied being a hired gun for Nalcor, saying he would never do anything to damage his professional reputation.

He developed the 2012 presentation following a series of meetings with experts at Nalcor, and through research of his own.

Locke said at the time he was "not being paid by anyone to undertake this research and I do not represent anyone but myself."

'I was not under contract to Nalcor'

Inquiry co-counsel Barry Learmonth challenged Locke on this point, asking whether Locke should have disclosed at the time he was working as a consultant for government and Nalcor on various contracts, including an income and employment benefits study of Muskrat Falls.

"For this presentation and for this period of time, I was not under contract to Nalcor," Locke replied.

Locke said he was motivated to do the study because "I was trying to fulfil a need that I saw in terms of helping people get more information on Muskrat Falls in order to be better informed so they could make a better decision about whether they support or didn't support this project."

Documents show that between late 2013 and mid-2016, Locke's consulting company was paid more than $600,000 by the provincial government.

This document gives a breakdown of the consulting contracts awarded to economist Wade Locke by the provincial government and Nalcor. (Muskrat Falls inquiry)

Locke was hired by another consulting company — Strategic Concepts — that did work for the province and was paid nearly $160,000 between 2009 and 2015.

I have been honest and forthright with everybody on what I've done and how I've done it.- Wade Locke

Locke denied that his support for Muskrat Falls was influenced by this work.

"In no cases did the amount of effort and time I put into it and the remuneration I received for it, did that influence what I had to say at the Muskrat Falls presentation at the Harris Centre," Locke stated.

He added: "I have been honest and forthright with everybody on what I've done and how I've done it."

A year ago, with capital costs soaring, Locke joined those calling for an inquiry into Muskrat Falls. He stated at the time that because of the increased costs, and new estimates which lowered the forecasted demand for power, that Muskrat Falls may no longer be viable.

There were also allegations that the original costs estimates for Muskrat Falls were low-balled, and Locke said it was important to get answers.

Locke said he doesn't know what went wrong, but said lessons need to be learned if future hydro projects such as Gull Island are explored.

Locke, meanwhile, refused to speak with reporters following his testimony.

Feehan explains

Another MUN economist testified after Wade Locke finished his testimony.

Jim Feehan explained the context around his "damn the torpedoes" comment that upset former premier Danny Williams.

When Williams testified last week he defended the decision to pursue the development. 

Williams said critics accused him of having a "damn the torpedoes" approach to the project. "Nothing could be further from the truth. We turned over every stone. Explored every option," Williams told the inquiry during cross-examination by commission co-counsel Barry Learmonth.

Testifying Tuesday, Feehan said he was making a comparison to the 1969 Churchill Falls energy deal that became riddled with problems between the signing of a letter of intent and the final contract that gave the go ahead for the development. He said when he used that term he was quoting Philip Smith's book Brinco: The Story of Churchill Falls.

Feehan said that project ended up in a situation where costs escalated, there were problems with the reservoir, they had to deal with inflation and the project was running out of money.

"My point is ... once Muskrat Falls had been sanctioned, even before ... there were, in a sense, a lot of torpedos or obstacles. First, the Joint Review Panel which looked at the project I think for about three years came out in the study saying they weren't convinced it was in the long term interests of the province," Feehan said. 

"That was an obstacle or a signal. That was followed by the PUB report that said it couldn't determine that this was the lowest cost option. Then there were other — if you want — torpedos or obstacles along the way."

Feehan cited the concern raised about the North Spur and its stability, the study about methylmercury and community concerns in the protests and the 20 per cent increase to the cost of the project before any significant work was done. 

He added that shortly after sanction SNC Lavelin had done a risk assessment report and warned of potential cost overruns at $2.4 billion or more.

"And then of course in the following year there were cost overruns ... So there are a lot of, in a sense, torpedos and this is what I had in mind," Feehan said. 

"I was thinking of all the problems that beset Churchill Falls as sort of torpedoes or obstacles and I was thinking well this is sort of a parallel here."

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