Nfld. & Labrador

Muskrat Falls 'Danny's biggest mistake,' says Roger Grimes

Former premier Roger Grimes says consumers of electricity will spend the next 50 years or more with higher power bills and taxes to pay for a 'political' project.

Williams fires back in speech to St. John's Board of Trade

The Muskrat Falls project is estimated to cost $11.4 billion, including financing, and Grimes says that cost could go higher. (Nalcor)

Former Premier Roger Grimes is calling the Muskrat Falls project, with its $11.4-billion price tag, "the price of pride," and he says decisions made by his successor will haunt electricity consumers in Newfoundland and Labrador.

"This is the biggest mistake that Danny [Williams] ever made, by far, and will haunt all of us, unfortunately, for the rest of my life, my daughter's life, my granddaughter's life even."

"This is going to haunt us 50, 60, 70 years into the future," the former Liberal premier said Wednesday in an interview with CBC Radio's On the Go.

Williams "wanted to put it to Quebec," said Grimes, who said there were cheaper options for meeting electricity needs in Newfoundland and Labrador.  "He got sooky and spitey ... he had a complete, total blind spot when it came to Quebec."

Roger Grimes says he doesn't buy the argument that Muskrat Falls power is needed to meet future energy needs. (CBC )

Muskrat Falls power will cost 35 to 40 cents per kilowatt hour, he said, doubling power bills and increasing taxes to pay the borrowing costs.

"Your price for pride is what we're going to pay over the next 50 years."

Strategic investment, Williams says

In a speech Thursday to the St. John's Board of Trade, Williams fired back at Muskrat Falls critics, calling the project a "strategic investment" that will meet future power needs and reduce dependance on Hydro Quebec.

He said power rates were going up anyway, and the escalating costs of the project will add only three to four cents more a kilowatt hour.

"It's hard to believe that we are panicking about an overrun that pales in comparison to the big picture ... The bottom line is that this project is driving the economy," Williams told the crowd of about 350 people.

"It's providing badly needed power for the future. It's creating thousands of jobs ... It's building a valuable renewable asset that will be worth tens of billions of dollars to this province."

Danny Williams defended the Muskrat Project in a speech Thursday to the St. John's Board of Trade. (Gary Locke/CBC)

Williams said it is common for major projects to be overbudget, citing Hebron and the Vale nickel project.

He also took aim at Nalcor CEO Stan Marshall, saying his "boondoogle" comments about Muskrat Falls upon taking over at the corporation are one reason why public support for the project has slipped.

2002 deal derailed by election

Meanwhile, Grimes said his government nearly had a deal in 2002 with Hydro Quebec to develop at Gull Island, a Lower Churchill project that would have been three times as big as Muskrat Falls.

The arrangement had passed environmental scrutiny and had the endorsement of Aboriginal groups, and would see Quebec buy 2,400 megawatts of power, Grimes said.

"There was no thought of a line across the straits [of Belle Isle], because there was never any suggestion from Hydro that we were in short supply on the island."

The project never got off the ground because of an election that year which saw the Liberals lose to the Progressive Conservatives, led by Williams.

'Extension cord across the Gulf'

Grimes views the Muskrat Falls project, which has Newfoundland and Labrador Hydro buying the power, as a good deal for Nova Scotia — not Newfoundland and Labrador.

"Nova Scotia is going to pay for the extension cord across the Gulf [of St. Lawrence]," Grimes said.

"You're heating your house, and you say to your neighbour 'if you buy an extension cord, I'll let you plug into my house and you can heat your place, and when it's all over you give me back the cord .... That's the deal we have with Nova Scotia," he said.

"They're going to get free electricity for 35 years, and then if they buy any on the side, by the way, they're going to buy it for about five or six cents when it costs over 30 cents to produce it and another 10 or 12 cents to get it down here."

This is the biggest mistake that Danny ever made, by far, and will haunt all of us, unfortunately, for the rest of my life.- Roger Grimes

Grimes said he doesn't think it's too late to walk away from Muskrat Falls. He called on Nalcor to provide information on the cost of breaking contracts and potential legal battles.

The transmission line from Labrador could be completed, he said, and one option would be to buy power from Quebec and even send it to Nova Scotia to meet obligations there.

If allowed to continue, he said the Muskrat Falls project will make the vilified Upper Churchill deal, with its lack of an escalator clause, "pale by comparison."

With files from On the Go