Stan Marshall says Muskrat Falls was always trouble
On May 6, 2011, Fortis president and CEO Stan Marshall was at an annual shareholders meeting when he was asked what was then a 6.2-billion-dollar-question. Why wasn’t his international utilities company interested in getting in on the province’s ambitious plan to unleash the hydroelectric potential of the Lower Churchill?
Marshall’s answer guarded.
“We will not get involved in minority situations with governments. That is an absolute rule I have observed…” he said. “Simply, when things go wrong we’d like to be able to rectify them. If you’re going to go in with a partner you’ve got to know that partner very, very well; have a lot of commonality.
“Governments ... their agenda can be very, very different than a private enterprise.”
So imagine how bizarre it must have been for Marshall, five years later, to find his brief attempt at retirement thwarted as he accepted Premier Dwight Ball’s request (plea?) to become the new CEO of Nalcor Energy and the person in charge of Muskrat Falls. It wasn’t a position he’d ever wanted to find himself in.
I reminded Marshall of the answer he gave shareholders when I spoke to him Aug. 16.
“You were being diplomatic,” I suggested.
“It was suffice was explanation at the time,” he said with a wry smile.
I asked him if Fortis had also not been interested because he recognized from the start that Muskrat Falls wasn’t viable.
“I knew it would be trouble,” Marshall said. “It was never going to come in on budget. … Technology has improved a lot, but the fundamentals didn’t change over time. The cost of (power) generation is fairly attractive, but you’ve got to spend the money getting it to Newfoundland.”
When he’d first gotten wind of Muskrat Falls, someone asked him to ballpark the cost.
“$10 billion to $12 billion,” he said.
Now it’s his bailiwick — a boondoggle by his own admission — with the cost pegged at $12.7 billion thus far.
It’s telling that Marshall could see it for what it was from the get-go even as the Progressive Conservative government of the day and Nalcor officials were touting the project’s grand vision. Governments and private enterprise, as Marshall observed, can have very different agendas.
In August 2011, just three months after that Fortis shareholders meeting, Nalcor’s Muskrat Falls persuasion tour was in full swing — no doubt as directed — with visits to local media outlets to advance the argument that the project was the only alternative to meet the province’s energy needs.
“We feel comfortable with the project and the business case,” Nalcor corporate communications manager Dawn Dalley assured Telegram editors and reporters.
Nalcor VP Gilbert Bennett played the pocketbook card: “I guess the most fundamental question is, if we don’t want to build the project, then we want to pay more (for power),” he said, stressing the need to replace the oilguzzling Holyrood generating plant.
The province needed an alternate energy source, no question. But the oversized scope of Muskrat Falls compared to the province’s requirements, the risk taken on energy prices and demand, the concerns about cost overruns — these were questionable, but alternative ideas and critics were summarily dismissed.
Marshall knows many people want the project halted.
“There’s a lot of mistrust and we’re trying very hard to dissipate that,” he said, but added it would be foolhardy to stop now, given how much of the project is complete and the amount of money spent and committed.
He doesn’t have much time for politics or looking back, but in a speech to engineers last fall, Marshall said of the province’s determination to push ahead with Muskrat Falls: “We speculated and lost. Rather than being an answer to the problem, Muskrat Falls became the problem.”
I find it appalling that the people we entrusted with our future were willing to speculate, and heeded no warnings, no matter how sound.
Instead, they tried to brainwash the public via Kathy Dunderdale’s incessant messaging: “It has been demonstrated time and time again that the Muskrat Falls project is the lowest-cost option to meet the long-term energy needs of the province.”