ST. JOHN’S, N.L. — Robert MacIsaac wonders if, this time, the $9-billion Lower Churchill hydro project will go ahead.

The retired engineer and teacher is taking in display panels detailing the workings of the proposed multibillion-dollar Labrador power project at a public information meeting.

As a worker with the Lower Churchill Development Corporation in the 1970s, when the first studies of the project began, the panels tell a familiar story.

“Back then we all knew it was a great project but capital was expensive, energy was cheap and we were competing with nuclear plants in Ontario and New Brunswick. Hydro Quebec was the only option and no one wanted to deal with them, they were too inflexible.” said Mr. MacIsaac.

Inflexible might be too polite a way to put it for many on the Rock.

Quebec-Newfoundland relations have been strained since the infamous Upper Churchill contract was signed in the 1960s, giving Newfoundland and Labrador only a fraction of the revenue from power sales.

Hydro Quebec also controls the transmission lines out of Labrador and has not permitted Newfoundland to use them to move power to markets.

The Lower Churchill Project depicted on the panels — now part of daily water-cooler political discussions in St. John’s — is down river from the Churchill Falls hydro generating station in central Labrador and considered by many to be one of the last great hydroelectric projects in North America.

It’s been planned for the past 30 years and consists of two sites: Muskrat Falls (824 megawatts) and Gull Island (2,000 megawatts), generating enough power for 1.5 million homes.

Nova Scotia is hoping to tap into that power to meet its future energy needs. Power would come via subsea cable with landfall at several potential sites, including Glace Bay, Wreck Cove, Pictou and possibly Halifax.

The problem of getting power to market is still there and new obstacles, such as land claims, mean it’s not a done deal yet.

The Lower Churchill Development Corporation is owned by the province (51 per cent) and the federal government (49 per cent) and was set up to study and develop the Lower Churchill, but there is little talk of it or a federal partnership in the new plans.

James McGrath, a former Newfoundland MP, cabinet minister and lieutenant-governor, has seen the inside of federal-provincial politics for many years. He says that the primary reason the Lower Churchill has not been developed has more to do with interprovincial politics than economics.

“There is a natural tendency to avoid dealing with Quebec again. If I was advising the premier, I’d say have nothing to do with them . . . unless they are prepared to reopen the Upper Churchill contract,” says Mr. McGrath.

“There is a natural gas pipeline across the county from Alberta to Quebec and no one has a problem with that. Newfoundland moving electricity across Quebec and Ontario is no different. This is a national issue.”

But economic and environmental considerations are beginning to trump politics. The price of energy is at record levels, there are eager markets in Ontario, New York and the New England states and “clean energy” from hydro is desired to reduce pollution from burning carbon fuels.

Developing the Lower Churchill Project and the existing Churchill Falls power would generate the energy equivalent of 225,000 barrels of oil per day.

“The impact of climate change is a concern for everyone. The greenhouse gas issues alone are driving this project along. It’s good for the country.” said Ed Martin, president and CEO of Newfoundland and Labrador Hydro.

In 2005, the TD Bank said in economic outlook documents: “The proposed hydroelectricity development at Lower Churchill in Newfoundland and Labrador could go a long way toward ensuring sustainability of Canada’s electricity supply.

“Canada as a whole is in need of new sources of power, and with the nation stepping up its efforts to lower greenhouse gas emissions, big hydroelectric projects such as Lower Churchill are receiving a major shot in the arm,” said Derek Burleton, a senior economist at TD Bank.


In January 2008, a memorandum of understanding was signed between Newfoundland and Labrador Hydro, Emera Inc. and Nova Scotia Power Inc. to explore moving that electricity from Labrador to Nova Scotia.

“We had set a date for the end of April to assess if we’re to move to the next step,” said Mr. Martin.

“We’ve recently reviewed that with Emera and extended it for another two-month period. We are pretty much on schedule where we thought we would be with the discussion.

“We will explore the technical, economic, financial and regulatory aspects of exporting power from the Lower Churchill to these markets. When the assessment is done, the parties will decide if it’s a good business model to build a submarine transmission cable from the coast of Labrador to Nova Scotia,” Mr. Martin said.

“Fully assessing this opportunity is another element of Nova Scotia Power’s strategy to provide our customers more electricity from renewable sources, as well as an important example of co-operation among the provinces,” said Ralph Tedesco, president and CEO of NSP.

Emera CEO Chris Huskilson says, “We’re in a feasibility mode with the people in Newfoundland to see whether or not their project . . . will go ahead.”

The group is considering three options to bring the energy to the Maritimes: a subsea cable to New Brunswick, one to Nova Scotia and a direct route to the United States across the Scotian Shelf.


That co-operation between the provinces could mean a lot to the Lower Churchill Project, considering Newfoundland’s history and relationship with Hydro Quebec.

But Mr. Martin says all options are still open. “We are certainly willing to sell power to anyone . . . at the right price.”

NL Hydro is still focused on moving power through Quebec, and in January 2006 filed two applications to Hydro Quebec to gain access to its transmission lines.

“We have heard back on the first and we have gone back with a series of questions on technical issues. The second is pending them completing a request from somewhere else,” said Mr. Martin.

“We are putting together a good business case and looking at all options. We are trying to find out what works from a business perspective. We’ll take those options and present them to the province and they are going to have to make a decision,” he said.

The Newfoundland government has spent $247 million since the 1970s on studies and planning.

Newfoundland’s energy minister, Kathy Dunderdale, said recently that the province expects to update the progress of the project by the end of 2008, have a final decision in 2009, with possible construction beginning in 2010. The first power would flow in 2015.

And that won’t by too soon for Robert MacIsaac.

’The impact of climate change is a concern for everyone. The greenhouse gas issues alone are driving this project along. It’s good for the country.’