There are signs a massive power project that has been the centrepiece of the Nova Scotia NDP’s re-election bid may be in serious trouble.
A document prepared for the New England governors and obtained by CTV News indicates Emera’s $1.5-billion plan to build a subsea cable between Newfoundland and Nova Scotia is in jeopardy.
The Bank of Montreal says there’s a 50/50 chance the project will fail and officials with Nalcor Energy, the power company in Newfoundland and Labrador, won’t say what they are being told by Emera, which owns Nova Scotia Power.
Work has already begun on the $7.5-billion Muskrat Falls project in Labrador and a key component of the project is the $1.5-billion Maritime Link that would bring electricity to Nova Scotia and other markets.
It is also the principle energy plank in Nova Scotia Premier Darrell Dexter’s re-election platform.
“In fact, the case that they have made, I think, is a really excellent one,” says Dexter. “It shows that this is the lowest cost power for people over the long term.”
However, serious doubts are emerging about whether Emera intends to proceed with the Maritime Link.
A Bank of Montreal research report dealing with the company’s stock prices and the subsea cable was released in August. The report concluded that the Maritime Link has only a 50/50 chance of being sanctioned, based on conditions imposed by the Nova Scotia Utility and Review Board.
Analyst Ben Pham told CTV News in an email that “there remains outstanding headwinds/risks to removing those conditions.”
A whitepaper just released by the six New England states on hydropower imports from Canada also dealt with the Muskrat Falls project and observed that “there is no reference to contracts for power from the Muskrat facility.”
It also indicated that a Quebec lawsuit against Churchill Falls puts the Muskrat Falls project in jeopardy.
“The parties are working towards a solution and to be able to file one that will meet the conditions of the board,” says Dexter.
Emera spokesperson Sasha Irving says the company does not comment on speculation and that work continues on the subsea cable and UARB conditions.
“It means very clearly that the Utility and Review Board laid out conditions that the premier of Newfoundland and Labrador is not prepared to meet, and Emera is not prepared to build the link and take all the risk,” says Nova Scotia Liberal Leader Stephen McNeil.
Calls to the office of Newfoundland and Labrador Premier Kathy Dunderdale, to Nalcor and to the Newfoundland and Labrador Department of Energy were not returned.
After contacting Nalcor board members, asking if they has been informed by Emera that the Nova Scotia company is pulling out, a Nalcor public relations officer sent a brief email stating the company would not be “providing any comment at this time.”
If the link proceeds, Emera and Nova Scotia Power would be entitled to 20 per cent of the power produced – a little over 160 megawatts – but the UARB’s principle condition is that the company must get another 20 per cent from the project, or elsewhere, at market prices.
In August, Emera bought three power plants in the U.S. for a third of the price of the link. The power plants will produce a total of 1050 megawatts of power – more than six times what it would receive from Muskrat Falls.
With files from CTV Atlantic's Rick Grant
