ST. JOHN'S, N.L. -- The proposed multibillion-dollar Muskrat Falls hydro project took a step forward Tuesday with the signing of 13 formal agreements between Newfoundland and Labrador and Nova Scotia.
Newfoundland Crown corporation Nalcor Energy and private Nova Scotia utility Emera (TSX:EMA) signed the deals based on a term sheet announced in November 2010.
The plan to harness power from the lower Churchill River in Labrador before transmitting it to Newfoundland and then Nova Scotia using subsea cables is expected to top $6.2 billion. But updated costs that were expected two weeks ago weren't yet complete Tuesday as the deals were signed.
Those details are now expected later this fall before politicians in Newfoundland and Labrador debate the development and the Progressive Conservative government decides whether to go ahead.
Still, Newfoundland and Labrador Natural Resources Minister Jerome Kennedy said he believes Muskrat Falls will be the cheapest solution for his province's energy needs with the added potential of selling excess power to the Maritimes and New England. He said a power gateway through Nova Scotia is also the answer to transmission blocks put up by Quebec.
"We will finally be able to escape the geographical stranglehold that Quebec has had us in for almost 50 years," Kennedy told a news conference alongside his Nova Scotia counterpart in St. John's.
"It means in addition to simply having a transmission route, we can finally secure a competitive price for our power. It means we can finally move forward with our vision of unleashing the power of Newfoundland and Labrador's energy warehouse."
Nova Scotia Energy Minister Charlie Parker called Muskrat Falls a "game-changing project" that will help wean his province off coal while creating jobs and a cleaner energy source for the future.
In exchange for funding a subsea link between Newfoundland and Nova Scotia and providing transmission rights, Parker said his province will get 20 per cent of Muskrat Falls power for 35 years. After that, Nalcor assumes ownership of the Maritime link.
Nova Scotia will get extra power from the Maritime link over the first five years of that 35-year period -- slightly less than 25 per cent of Muskrat Falls energy per year -- to reflect the project's 50-year life span, Martin said.
Overall, Nova Scotia's share of the 824 megawatts to be produced at Muskrat Falls is expected to meet between about 10 and 30 per cent of the province's needs depending on the time of year and other circumstances.
The dam and generating station on Labrador's lower Churchill River would also replace an aging oil-fired plant in Newfoundland, meaning the province would be 98-per-cent powered by renewable energy.
Nalcor and Emera signed the agreements in what they said is a necessary step toward a utility review in Nova Scotia and a decision by Newfoundland and Labrador on whether to sanction the development.
Officials say the deals allow for flexibility should those reviews raise unforeseen concerns.
They say costs for the project and the resulting price of power will be clarified later this year.
Opposition politicians raised concerns that the agreements were signed despite so many fundamental information gaps.
"Here we are today with a term sheet in place with Emera and we don't know the cost," said Dwight Ball, Newfoundland and Labrador's Liberal Opposition leader.
"We still have questions around overruns here. We still have questions around our own financing and the other commitments we've made in the province."
