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Guest Post by PlanetNL Planet NL15: Forensic Audit Only Scratches Surface of Sanction Costing Errors The release of the Grant Thornton report on Friday raised serious doubts about Nalcor�s pre-sanction justification for the Muskrat Falls project.   The report indicated enough areas where weakly constructed assumptions would add up to show that the Muskrat Interconnected option would not be the least cost alternative compared to the remaining Isolated Island option. Despite these very persuasive snapshots, the Inquiry may only have gotten just what it asked in terms of the forensic audit�s time and budget limitations from a team with little experience in electricity utilities.   The story is not yet complete enough and the Commission should pursue reconstruction of Nalcor�s cost models using an extensive revised set of assumptions developed by an experienced utility consultant.   It�s a significant undertaking but one that appears essential to allow the Commissioner to con...

Guest Post by Agent 13 The decision by Equinor (formerly Statoil of Norway) and Husky Oil to further assess the feasibility of developing the Bay du Nord oil field, located some 500 km offshore in the Flemish Pass region, represents good news for the province. Unfortunately, the Ball Government turned what was a good news day on July 26, 2018 into one of disappointment and disbelief.    That the provincial government thinks it is solvent enough, knowledgeable enough, or savvy enough to deal with one of those major oil companies � with their mixed portfolio of huge capital assets � is a prolongation of the same pretense that facilitated the reckless decision to sanction the Muskrat Falls project. Equinor, the lead player in the Bay du Nord development, and Husky plan to spend millions of dollars studying the field and looking at the best way to develop the structure. They will develop cost projections for both construction and operations. If the numbers are attractive enough, ...

This post co-authored with David Vardy The Forensic Auditor's main conclusion was that based upon its �findings and observations, at the time of sanctioning� a �combination of�potential misstatements may have resulted in the Interconnected Island Option (the Muskrat Falls project) no longer being considered the least cost option at the time of sanctioning.� In coming to this conclusion, Grant Thornton has confirmed long held suspicions that Nalcor planned to advance sanction of the MFP regardless of the consequences. Essentially, the Forensic Auditor chronicles a narrative that suggests recklessness on the part of Nalcor Energy. The Forensic Audit was made public by the Commission of Inquiry September 21, 2018. GT reports that there was: 1. A potential overstatement of the Cumulative Present Worth (CPW) for the Isolated Island Option; and 2. A potential understatement of the CPW for the Interconnected Island Option. Presumably GT�s use of the qualifier �may� is intended to defer f...

Guest Post by PlanetNL   PlanetNL14: Hydro Reliability This Winter - At the Mercy of the Weather The Liberty Consulting Group is a specialist frequently utilized by regulators to provide critical analysis of how utility businesses are performing, especially in the wake of major failure.   The NL PUB hired Liberty in 2014 to assess the causes of the January 2014 outage event known popularly as Dark NL and to subsequently monitor NL Hydro�s plans to upgrade the system.   Liberty has evaluated Hydro�s winter readiness every year since and is monitoring the Transition To Operations (TTO) efforts to integrate Muskrat Falls, the Labrador Island Link and the Maritime Link. The latest Liberty report, Winter 2018-19 Supply Adequacy, was filed by the PUB on September 5, 2018.   The report indicates considerable wariness and frustration with Hydro and Nalcor and tremendous concern that neither the Labrador Island Link will be a reliable source of generation this winter, and nor...

When Premier Dwight Ball kicked off the Windsor Lake byelection claiming that ratepayers and taxpayers � both � would be spared the burden of the Muskrat Falls project he wasn�t being fanciful; he was being dishonest. Hyperbole is seldom a sidebar in any election.   But this time the sheer size of the promises surely made them the main event.   Particularly disconcerting is that Ball's rate mitigation claims lacked any proof of viability.   Sincere and sensible politicians will avoid over the top promises especially when they know that they are playing a limited hand. The Premier squarely placed himself among the less disciplined. Likely, for that reason, the public seemed to treat them with something ranging from scepticism to derision.      Ball�s dark side has been exposed before. His doubtful narrative around the sacking of former CEO Ed Martin and how the latter still ended up with a multi-million-dollar severance package contains the same insincerity....