SYDNEY, N.S. - The governments of Nova Scotia and Newfoundland and Labrador have finalized a memorandum of understanding that helps outline how contracts will be awarded for the proposed Muskrat Falls hydroelectric project.
The deal announced Monday gives preference for Newfoundland and Labrador businesses on contracts for the Muskrat Falls generating facility and the transmission link between Labrador and Newfoundland. It also gives businesses in Nova Scotia equal opportunity to bid for contracts for construction of the Maritime link.
"This means that along with Newfoundland and Labrador, Nova Scotia companies will receive full and fair access to participate on a competitive basis for opportunities associated with the Lower Churchill project," Nova Scotia Premier Darrell Dexter told a news conference at Cape Breton University in Sydney.
The 180-kilometre subsea link would help transmit power from Cape Ray, N.L., to Lingan, N.S. It would be funded by Nova Scotia private utility Emera (TSX:EMA), which estimates it will cost $1.2 billion.
Work on the link will begin in 2014 and power should start flowing to the province in 2017, Dexter said.
Emera president Rick Janega said information sessions for contractors and suppliers will begin early next year.
Under conditions of a term sheet announced a year ago, Newfoundland and Labrador's Crown energy company would spend $2.9 billion to build a power generating facility at Muskrat Falls capable of producing 824 megawatts of electricity.
A further $2.1 billion would be spent to build a transmission link from Labrador to Newfoundland, $600 million of which would be provided by Emera.
Under the agreement, Nova Scotia would get 170 megawatts of energy a year -- about 10 per cent of the province's total energy needs -- for 35 years.
