Consumer advocate should stop chasing rabbits
Long ago I learned that one should “not go off chasing rabbits when one is hunting moose” — or Muskrats.
I refer to James McLeod’s Weekend Telegram article on July 9th, “Consumer advocate defends his record.”
To demonstrate his prowess as the people’s consumer advocate, McLeod says that Tom Johnson offered as an example of his success the coming refund for electricity customers who were collectively overcharged more than $140 million.
While it is indeed commendable (and well needed) that consumers will receive a refund, customers should not lose sight of the fact that the overcharged rate was just a little over 1/3rd of a cent per kilowatt-hour.
That means, for example, that those using electric heat on average will receive a total refund of about $445 for a sixand-half-year overpayment — the “rabbit.”
No doubt, our consumer advocate spent many years and much of our money (and continues to do so) chasing this rabbit (1/3rd of a cent overpayment).
Meanwhile, over in Nalcorland, newly appointed CEO Stan Marshall reports that when Muskrat Falls (the “moose”) comes on stream, ratepayers will pay, not 1/3rd of a cent more than they do now, but 10 cents per kilowatt-hour more — 27.5 times as much as the 1/3 cent per kilowatt-hour overpayment.
But instead of consumer advocate and lawyer Tom Johnson chasing this moose (Muskrat) and instead of using his logic and reason supported by facts and law to flesh out the numerous flawed assumptions on which the Muskrat Falls project was and is based, Johnson was and is off chasing rabbits (a 1/3rd cent per kilowatt-hour over payment).
The evidence
At a 10 cent per kilowatthour rate increase (not including Muskrat’s anticipated two per cent annual increase, higher costs for transmission line problems, higher costs associated with Astaldi, and not including a significant portion of deferred costs to be paid sometime in the future by our children and grandchildren), and over an equivalent six-anda half-year period after Muskrat Falls comes on stream, the average customer using electric heat will pay, not an additional $445, but 27.5 times (10 cents divided by 0.363 cents) as much as $445 — an additional $12,237 on his or her electricity bill.
Now, keep in mind that this additional charge will not be for just the six-and-a-half years after Muskrat Falls comes on stream, but will be for the 20year period up to 2041. And over that 20-year period the average customer using electric heat will pay an additional $37,700 (3.08 times $12,237) on his or her electricity bill.
Furthermore, and even though in 2041 the near zero cost Upper Churchill power becomes available to Newfoundland and Labrador customers, the Muskrat Falls project (as it is now defined/structured) will continue to keep N.L. ratepayers locked in for a further 30 (and possibly more) years to its severely overpriced power purchase agreement.
Even if, and it won’t be, that Muskrat’s electricity rate remained stable at Stan Marshall’s estimated 10 cent per kilowatt-hour increase, the average customer using electric heat over that further 30year period will pay another $57,500 on his or her electricity bill — totally negating the long overdue benefit that Upper Churchill power would (and should) otherwise be available to ratepayers.
Come 2041, what Muskrat Falls will do is deny N.L. citizens the long anticipated and long overdue benefit from the Upper Churchill’s very low cost power.
If in 2041 N.L. ratepayers will not benefit from the return of the Upper Churchill power, who will?
Clearly, it is not good enough, it is not insightful, it is not visionary, it is not in the province’s or the people’s best interest for Dwight Ball, Stan Marshall or for the consumer advocate to be chasing rabbits, when they know or should know (as most citizens are starting to know) that they should be hunting moose.