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REFLECTIONS ON THE MUSKRAT FALLS PROJECT

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Guest Post by David Vardy Introduction The sanctioning of the Muskrat Falls project in December of 2012 was a huge mistake, one which has spiralled into a major economic and environmental catastrophe.  The warnings of the joint federal provincial panel were ignored, as were those of the Public Utilities Board. These warnings relate to the lack of a business case for the project, the high risk for a small province, the adverse demographic factors, the lack of export markets and the high unit cost. A Gamble that failed In a Telegram article dated May 25, 2013 the Honourable John Crosbie said that �Muskrat Falls is worth the risk�, quoting T. S. Eliot on the subject of risk: Only those who would risk going too far can possibly find out how far you can go. Since then we have sailed on a sea of risk and reaped the whirlwind.  David A. Vardy The challenge now is to prevent the risks from destabilizing the provincial economy. The risks of operating the project may prove to be just as...
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WILL MUSKRAT FALLS PAY DIVIDENDS? (PART I)

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Guest Post by David Vardy Part 1: Is the PPA another Churchill Falls Contract? Russell Wangersky was right when he said in the Telegram on October 27, 2018 that Muskrat Falls is �a win for investors but the risk�s on us�, the ratepayers.   �The fundamental assumption in the financing of the project is that the revenues charged to island ratepayers for the generation and transmission of Muskrat Falls power will flow unfettered to the lenders to satisfy debt payments.�   In this post I examine the underpinnings of this �fundamental assumption�, beginning with the take-or-pay power purchase agreement (PPA), the role of equity and the concept of freedom of choice. Does the PPA lock us in to an abusive relationship, not for 65 years but for 50? Is it another Churchill Falls Agreement which strips us of our rights? In my next post I will ask if the PPA makes Muskrat Falls self-supporting and whether revenues from rates will cover all costs and generate dividends for the government...
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NOT JUST EDDIE JOYCE; KIRBY AND THE PREMIER SHOULD GO, TOO

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On Saturday the Tories elected a new Party leader. That�s nice. But will he lead? There has been no effective Opposition for at least a decade. Nor has leadership come from the Government benches over the same period, either. When the economy is going well, business is booming and employment rates are high, leadership of all kinds � especially political leadership � is a commodity taken for granted. Governments play an important role in this economy, even if far too often it is with a negative effect.  Perhaps it is in the nature of societies to think that things happen for no particular reason.  Truth is, that�s rarely the case.  The inability to lead, to be proactive, to have a nose for crisis, and to be willing to undergo the stress of intervention, is at the heart of the Liberal Government�s latest crisis, too. The Eddie Joyce affair is simply another manifestation of a Dwight Ball Government in perennial crisis.  Joyce is gone. Dale Kirby should be gone. The Pr...
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