Deal on term sheet to develop Muskrat Falls reached

A deal to finalize a term sheet to develop the Muskrat Falls hydroelectric project in Labrador has been reached, sources told The Canadian Press Monday. The deal to build the project, expected to cost more than $6.2 billion, is between the province’s Crown energy company Nalcor and Nova Scotia private utility Emera.

Adeal to finalize a term sheet to develop the Muskrat Falls hydroelectric project in Labrador has been reached, sources told The Canadian Press Monday.

The deal to build the project, expected to cost more than $6.2 billion, is between the province’s Crown energy company Nalcor and Nova Scotia private utility Emera.

Two sources say the governments for the two provinces are expected to announce details today.

Both governments have called news conferences to make energy announcements. A spokeswoman for Nova Scotia’s energy minister wouldn’t say if the announcement in Halifax was related to Muskrat Falls.

The two utilities have a joint plan to harness energy from the lower Churchill River in Labrador and bring it to Newfoundland and the mainland using subsea cables.

The two sides announced a term sheet in November 2010 for the complex project, but then missed a one-year deadline, and an extension, to reach a final agreement as they worked out details.

Newfoundland and Labrador is to hold a political debate in the House of Assembly this fall before deciding whether to sanction the project.

Under conditions of the term sheet, Nalcor would spend $2.9 billion to build a power generating facility at Muskrat Falls to produce 824 megawatts of electricity.

Emera would fund a 180kilometre subsea link between Cape Ray, N.L., and Lingan, N.S., at a cost of $1.2 billion.

A further $2.1 billion would be spent to build a transmission link from Labrador to Newfoundland, $600 million of which would be provided by Emera.

Nova Scotia would get 170 megawatts of energy per year, about 10 per cent of the province’s total energy needs, for 35 years.