Newfoundland and Labrador has reached a tentative deal┬аwith Quebec over power flowing from the Churchill Falls hydroelectric plant that could reap hundreds of billions of dollars over the next five decades.
Newfoundland and Labrador Premier Andrew Furey and Quebec Premier Fran├зois Legault are announcing the terms of a memorandum of understanding at a news conference in St. John’s this afternoon.
In a sweeping agreement that not only replaces a contentious 65-year contract that generations of N.L.┬аpoliticians have loathed,┬аFurey and Legault also announced plans to develop Gull Island, one of the last great hydroelectric projects in North America.┬а
“тАЛToday, everything changes for Newfoundland and Labrador,” Furey told a crowded audience.
тАЛтАЛ”We are ripping up the 1969 contract. Not in 2041, when it expires, but today.”┬а
The MOU is expected to be formalized by 2026.┬а
Under the current contract, which would have had┬а17 years left until its expiration, N.L. received┬а0.2 cents/kWh. Under the new proposed agreement, that’s increased by no less than┬а30 times to 5.9 cents/kWh.
Over the next of 50 years, N.L. is expecting to reap billions of dollars.
In the next 17 years, it will earn $1 billion a year. Starting in 2041, that will double to $2 billion a year, then double again to $4 billion per year in 2056. Escalating clauses will mean increases beyond that point.┬а
New Labrador hydro developments
The second part of the MOU relates to hydro developments that will significantly boost Labrador’s power capacity up to 1,990 megawatts.
The long-discussed Gull Island hydroelectric project тАФ a separate undeveloped project┬аdownstream on the Churchill River тАФ┬а is also on the table.
The project, which received an environmental assessment in 2012, could generate 2,250 MW.
Hydro-Qu├йbec┬аwould be the project lead and manage its construction, which would also mean it will have to absorb any cost overrun.┬аN.L. Hydro would operate the facility and get access to 225 MW.
The Gull Island project would be a new entity, owned 60 per cent by N.L. Hydro and 40 per cent by Hydro-Qu├йbec.┬а
The target date for commissioning Gull Island is 2035,┬а11 years from now.
N.L. Hydro and Hydro-Qu├йbec also want to partner in boosting┬аhydro electric production at the Churchill Falls plant with a second underground powerhouse┬аbuilt near the existing reservoir. It would┬аgenerate 1,110 MW.
An environmental assessment will still need to be done. Hydro-Qu├йbec would┬аmanage the construction, with N.L. Hydro operating it once it is completed. N.L. Hydro would also get access to 135 MW.
This expansion will be owned by the Churchill Falls (Labrador) Corporation, with 65.8 per cent owned by N.L. Hydro and 34.2 per cent Hydro-Qu├йbec.
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