Goug­ing 101

The Compass - - EDITORIAL -

Guess what? Your power rates are go­ing up - way up. Tell you some­thing you didn’t know, right?

Well, here’s some­thing you may or may not re­al­ize: your gov­ern­ment has been do­ing ev­ery­thing in its power to try to pre­vent that from hap­pen­ing.

Sorry, there’s a “not” miss­ing in that sen­tence. They are do­ing ev­ery­thing they can not to pre­vent it. Con­fused? You shouldn’t be. Nal­cor En­ergy and its sub­sidiary, New­found­land and Labrador Hy­dro, have been warn­ing for years that power costs will go up. The main pur­chaser of that power, New­found­land Power, is be­fore the Pub­lic Util­i­ties Board right now ar­gu­ing for yet an­other rate hike. (They’re the com­pany that de­cides what you, the con­sumer, pays.) Is Muskrat Falls to blame for this? Well, Nal­cor has al­ways main­tained our rates were go­ing up any­way. You may re­mem­ber all its graphs and charts show­ing pro­jected rates steadily climb­ing be­cause of, among other things, a con­tin­u­ing rise in fuel costs. (That didn’t quite pan out now, did it?)

But we’re build­ing Muskrat Falls any­way - the pro­jected cost of which is also con­stantly ris­ing.

The Crown cor­po­ra­tion is bor­row­ing bil­lions to com­plete this project. And it needs to pro­vide lenders with as­sur­ances the money will be paid back, with in­ter­est.

How? The only way is to make sure Hy­dro can charge as much as it needs to pay off this in­creas­ingly ex­pen­sive dam. So it def­i­nitely can’t have any com­pe­ti­tion. We can’t have any­one of­fer­ing a cheaper price.

So, who guar­an­teed this mo­nop­oly? The pro­vin­cial gov­ern­ment, at your ser­vice.

In 2012, the Tories passed Bill 61. In a nut­shell, it gives Hy­dro exclusive con­trol over the grid. No one else can gen­er­ate or im­port power and sell it whole­sale. Even per­sonal-use power gen­er­a­tion has to stay off the grid for now while net-me­ter­ing leg­is­la­tion re­mains in limbo.

And to top it off, the Pub­lic Util­i­ties Board - the ul­ti­mate pro­vin­cial au­thor­ity for de­cid­ing rates and other facets of power gen­er­a­tion - has been stripped of any say in what Muskrat Falls charges for elec­tric­ity. It can only play a role in the fi­nal rate to con­sumers.

One more thing: there’s been a lot of talk lately about putting cash from power sales out­side the prov­ince to­wards rate relief for lo­cal con­sumers.

Un­for­tu­nately, the gov­ern­ment may have shot it­self in the foot there, too. Be­cause the U.S. de­mands that any ju­ris­dic­tion sell­ing power in their mar­kets must also al­low open com­pe­ti­tion in its own.

It’s not cer­tain yet, but Bill 61 may have put the ki­bosh on that.

The drip, drip, drip of these de­vel­op­ments may have seemed log­i­cal at the time. But the fi­nal prod­uct re­sem­bles any­thing but a case of the gov­ern­ment work­ing for the peo­ple.

In­stead, it has held us hostage.

The Crown cor­po­ra­tion is bor­row­ing bil­lions to com­plete this project. And it needs to pro­vide lenders with as­sur­ances the money will be paid back, with in­ter­est.

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