Nfld. & Labrador

Long-long-long-term planning: Panel of experts tasked to explore future of Churchill Falls

A panel of experts will map potential paths forward for Churchill Falls assets ahead of the 2041 expiry of the contract between Churchill Falls (Labrador) Corp. and Hydro-Québec.

2041 contract expiration nearly 20 years away but premier says it's not too early to consider options

Energy, Industry and Technology Minister Andrew Parsons, Premier Andrew Furey and N.L. Hydro CEO Jennifer Williams announced a panel of experts will explore how the provincial government can approach the future of Churchill Falls. (Darrell Roberts/CBC)

A panel of experts has been tasked to map potential paths forward for Churchill Falls assets with nearly two decades to go before the contract between Churchill Falls (Labrador) Corp. and Hydro-Québec expires in 2041.

At a media briefing Wednesday, Premier Andrew Furey said the panel will recommend potential approaches to ensure "maximum long-term benefits" from the Upper Churchill Project for Newfoundland and Labrador.

"The panel will educate the public and government on the current contract's implications for Newfoundland and Labrador," Furey said.

Furey wouldn't say if the government is looking at any options in particular or if contract negotiations will begin with Hydro-Québec. He said the panel isn't "commercial" but could lead to commercial options.

The panel, promised last year, will include 12 members with backgrounds in areas like law, hydroelectric projects and economics. The panel will be chaired by Karl Smith, the former chief financial officer of Fortis Inc. The Innu Nation, the Nunatsiavut government and the NunatuKavut community council have each appointed an expert to the panel.

The Churchill River in Labrador is one of the world’s most significant sources of hydroelectric power. The massive underground power station at Churchill Falls is carved out of solid granite and has a generating capacity of more than 5,400 megawatts. (Nalcor Energy)

The Innu Nation chose Camerado Energy director Rick Hendricks, the NunatuKavut community council chose energy security researcher Nick Mercer, and the Nunatsiavut government chose its deputy finance minister, Rexanne Crawford.

Furey said members of the panel will not be paid but the government has provided some assistance to Indigenous groups.

Panel comes from Muskrat Falls inquiry recommendation

Currently, almost all of the 5,428 megawatts generated by the Upper Churchill project are sold to Hydro-Québec at an price stipulated by the 1969 contract between Churchill Falls Corp. and Hydro-Québec. That contract lasts until Aug. 31, 2041; until then, Hydro-Québec will continue to buy Churchill Falls electricity at $2 per megawatt-hour — barely above free.

The Newfoundland and Labrador government has unsuccessfully sued to reopen the contract, arguing the energy market has changed dramatically since the agreement was signed in 1969.

The panel of experts comes out of a recommendation from the Muskrat Falls public inquiry. Commissioner Richard LeBlanc said the panel should focus on the technical and commercial considerations for potential contract negotiations.

"I suggest that [the Newfoundland and Labrador government] should start to plan for 2041 sooner rather than later," LeBlanc wrote in 2020.

Interim PC Leader David Brazil says he's in favour of establishing the panel. (Mark Quinn/CBC)

The Churchill Falls (Labrador) Corp. is a subsidiary of Newfoundland and Labrador Hydro, which owns 65.8 per cent of it; the other 34.2 percent of the company is owned by Hydro-Québec.

The panel could look at options for renegotiating the contract once it expires in 2041, or for expanding the facility itself, said Furey.

Blink of an eye

The contract won't end for nearly two decades, but Furey said that's a relatively short period of time for a hydroelectric project.

"It's a blink of an eye. These projects are designed for 80- or 100-year timelines," he said.

He said the work of the panel should conclude by September, though he said that timeline could be extended. He said part of the purpose of the panel is to inform the public, though "commercially sensitive" information would not be shared.

Earlier this month, the provincial government reaffirmed its refusal to release any portion of the report on the review of public assets by Rothschild and Co., also citing concerns about commercial sensitivity.

The panel will meet at least four times, but Nalcor CEO Jennifer Williams, who is a member of the panel, said there will likely be more work involved as work gets underway.

Interim Progressive Conservative Leader David Brazil said Wednesday he's in favour of the panel but it should've been established earlier.

"This has to stand on the merits to rectify what was a bad deal in the late '60s that didn't benefit the people of Newfoundland Labrador the way it should have, and that has benefited Hydro-Québec," he said.

Read more from CBC Newfoundland and Labrador

With files from Terry Roberts

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