Monday, April 6, 2009

Pick Your Partner

For all the prattle about going it alone and self-reliance, the 2 April press release makes it clear that Dangovt is not talking about developing Hydro power all by itself.

In fact, Dangovt is highlighting its new partnership. This partnership is not with Ottawa, Quebec, or any other province or state but, rather, a corporation: Emera.

The press release makes it clear that this deal is being touted as the beginning of a longer-term business relationship. For all the rhetoric about a "historic and momentous occasion for the people of our province," it was framed in terms of two businesses (both of which operate monopolies) forming a strategic partnership.

To make sure that this special relationship was lost on no one, Emera was cut a slice of the publicity pie. “This is an exciting opportunity for both Nalcor and Emera Energy,” said Wayne O'Connor Chief Operating Officer of Emera Energy. “We are proud to play a part and look forward to working together to bring this valuable resource to markets across northeast North America.”

“At the present time, we are working with Emera Energy to have our power get to these markets,” said Premier Williams. “In other words, we have concluded a sale agreement with them so that with their considerable expertise in the industry, this power, originating from our province may be sold into markets. Obviously, this is something entirely new for us as a province and so we retained the best expertise possible in these early days. Our goal is to eventually develop the expertise at Nalcor so that we can act as seller into final markets. We understand from Emera that power from Labrador today is being sold directly into the United States; destination – New York. Newfoundland and Labrador is taking a bite out of the big apple.” See

To certify that this is, in fact, an authentic Dangovt proclamation, it contains a nonsensical code sentence: "Having assessed all options, Nalcor Energy determined the most strategic and valuable decision moving forward is this arrangement as opposed to entering another power purchase agreement with Quebec at this time." When you see such Danspeak, you know that you're dealing with an important Dannouncement.

Now that we've been told that Emera is going to be such a bold part of such a historic arrangement, it might be helpful to know a thing or two about this company and its operations in the Maritimes:

With Emera comes a Maritimes connection that has been overlooked in NL, but not in NS. The announcement has already fueled speculation about the role NS will play in the hypothetical Labrador-Newfoundland-Maritimes transmission line. With Graham already talking tough about the prospect of wheeling power through NB, speculation has turned to how NS faces a "squeeze play":

While NL was in the frenzy of its initial Hydro spin, trash talk was already breaking out in the NS media, with one Chronicle Herald story headlined, "Premier zaps N.B.’s Graham: If you don’t want to be part of the Churchill power project, then you can be bypassed, N.B. premier told." At least the reporters managed to point out that no decision has been made about the hypothetical transmission lines, and the projected cost of the hypothetical project could top $9 billion:

In Nova Scotia, Emera is known for providing, via Nova Scotia Power, inferior service for inflated prices. Here's a sampling from CBC's coverage:

As any Nova Scotian can tell you, at length, mixing a public monopoly with private business can give you the worst of both worlds. NALCO loves to present itself as a savy business, but nothing -- repeat, nothing -- will happen with the Lower Churchill without gobs and gobs of taxpayers' money.

And nothing will happen until the music stops in the pick-your-partner Hydro dance. Perhaps that's the point.

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