Nfld. & Labrador

N.L. awarded nearly $25M in Churchill Falls settlement with Hydro-Québec

Newfoundland and Labrador and Hydro-Québec have reached a near $25 million settlement over the Churchill Falls hydroelectric power contract.

Payment is retroactive to 2016

Newfoundland and Labrador and Hydro-Québec have reached a near $25-million settlement. (Nalcor Energy)

Newfoundland and Labrador and Hydro-Québec have reached a nearly $25 million settlement over the Churchill Falls hydroelectric power contract.

The settlement — included in Newfoundland and Labrador Hydro's second-quarter financial results Tuesday and first reported by allNewfoundlandLabrador — followed a 2019 court win that saw the Quebec Court of Appeal rule that the Churchill Falls Corporation has the right to sell energy produced above a certain threshold.

Newfoundland and Labrador Hydro is a majority shareholder of the Churchill Falls Corporation.

The 2019 decision meant the corporation should have made more money since 2016, and sparked nearly two years of negotiations.

The end result is that Hydro-Québec has agreed to pay the Churchill Falls Corporation a retroactive payment of almost $25 million. Hydro-Québec retains its annual energy entitlement.

The initial contract was signed in 1969 and has since expired, but a renewed power contract, effective Sept. 1, 2016, is valid until 2041.

Hydro-Québec had successfully argued in court that the contract is valid because the utility assumed the costs and risks that came with the hydroelectric project when the contract was signed. The utility purchases a majority of the electricity generated by the central Labrador facility for less than market value.

Newfoundland and Labrador Hydro confirmed the settlement Wednesday but declined an interview request, saying only that the settlement contains commercially sensitive information and releasing it might upset Hydro-Québec.

From the signing of the contract in 1969 to 2019, Hydro-Québec made profits of close to $28 billion, compared with just $2 billion for Newfoundland and Labrador.

Read more from CBC Newfoundland and Labrador


  • A previous version of this story said that when the deal expires in 2041, full control of the hydroelectric project will be returned to the Churchill Falls Corporation. In fact, CF(L)Co has always maintained control of the project; in 2041, the obligations stipulated in the contract end.
    Aug 26, 2021 3:14 PM NT

With files from Mark Quinn


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