Operations of Nalcor Energy to be absorbed by Newfoundland and Labrador Hydro: Furey

Newfoundland and Labrador Premier Andrew Furey at a press conference in the lobby of the Confederation Building in St. John’s on Friday, January 15, 2021 where he announced a February 13, 2021 provincial election. THE CANADIAN PRESS/Paul Daly

ST. JOHN'S, N.L. — The government of Newfoundland and Labrador is absorbing the operations of Crown-owned Nalcor Energy, which is overseeing the troubled Muskrat Falls hydroelectric project, into the province's hydro utility.

"Our government committed to immediately begin analysis and reorganization of Nalcor to streamline, remove duplication and to save Newfoundland and Labrador taxpayer money," Premier Andrew Furey told reporters Wednesday in St. John's.

"The action today is another step toward fulfilling this commitment -- the first of many," he said.

Both Furey and Energy Minister Andrew Parsons said no estimates or targets have been set for cost savings.

"There is no set number," Parsons said at the news conference. "There is no set target, but there's been enough indications from the work that we've done already that there will be savings. It is hard to quantify at this point because we have so much work left to do."

The provincial government recently appointed Jennifer Williams, president and CEO of Newfoundland and Labrador Hydro, as interim CEO of Nalcor. Williams said the analysis has not been done yet, so it's too early to say how much money can be saved.

Parsons said staff at Nalcor and at the utility can rest assured there won't be mass layoffs. "We recognize their expertise," he said. "We recognize their experience and this is not about any kind of mass layoff. That is not happening."

But Williams said there is room for attrition. "There is opportunity for attrition for us to do things differently, to do work differently and to do some work that we can reprioritize and delay," she said.

Abolishing Nalcor was a recommendation in a report on the province's economy released in early May. Moya Greene, who chaired the team behind the report, said at the time that Nalcor was far too large and complicated for a small province.

Nalcor Energy has overseen the troubled Muskrat Falls hydroelectric project in Labrador, which has roughly doubled in cost to $13.1 billion. A yearlong public inquiry into what went wrong with the project began in 2018, and the final, blistering report blamed Nalcor's top managers at the time.

In April, the government announced it would end the big bonuses regularly paid to executives at Nalcor. On Wednesday, Williams said that also applies to Newfoundland and Labrador Hydro.

Furey said moving Nalcor's operations into the hydro utility is the first of many steps in dissolving the energy company and it will take some time.

This report by The Canadian Press was first published June 23, 2021.