Newfoundland and Labrador Hydro’s CEO, Jennifer Williams, assures that the recent memorandum of understanding (MOU) regarding Churchill River power will not result in agreements similar to the 1969 Churchill Falls (Labrador) Corporation (CFLCo) power purchase deal. Williams expressed her satisfaction with the current arrangement in an interview with CBC’s Carolyn Stokes.
The 1969 contract, which remains in effect, provided low power rates for Hydro-Québec for many years, with minimal benefits for CFLCo as electricity prices surged. The new three-way MOU, involving the province’s utilities and CFLCo, was unveiled on Aug. 17, outlining a potential new sales contract, along with significant capital projects and power sales linked to the river.
Prime Minister Mark Carney, accompanied by then-Quebec premier Christine Fréchette and N.L. Premier Tony Wakeham, hailed the agreement as “the biggest green energy initiative in North American history.” Williams, although initially reserved in her comments post-announcement, elaborated on the proposed 50-year sales contract for Churchill Falls power, emphasizing a substantial price increase compared to the 1969 agreement.
Under the new terms, Newfoundland and Labrador will sell a maximum power capacity to Quebec at an escalating premium rate, reaching 11.5 cents per kilowatt-hour until 2041. The price will rise by an average of 14% annually until 2041, with further increases tied to the Consumer Price Index. Williams highlighted that without the new agreement, Hydro-Québec would continue paying a mere 0.2 cents per kilowatt-hour until 2041.
The extended sales agreement and increased price reflect Hydro-Québec’s willingness to terminate the existing contract prematurely. Williams emphasized that the deal presents an opportunity for additional power generation on the river to support N.L. Hydro’s objectives and industrial growth in Labrador.
The MOU also paves the way for potential contracts related to the Gull Island development and a new transmission line in Labrador, along with commitments for exploring additional energy projects. The agreement addresses the challenge of N.L. Hydro’s inability to directly sell power beyond Quebec, instead outlining arrangements for selling excess electricity to Hydro-Québec for resale.
Williams underscored the importance of considering the power’s location and the associated infrastructure challenges. The deal signifies a shift in Newfoundland and Labrador’s power policy, with Williams endorsing the changes as beneficial for all stakeholders involved. The province aims to finalize the agreement’s terms by the year-end, with a special debate scheduled in the House of Assembly on September 14.
