Muskrat Falls rate-mitigation deal to likely miss Sept. 30 deadline, says N.L. government

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An aerial photo of the powerhouse on the Muskrat Falls project site, including the spillway and the project's north dam. The hydroelectric dam is expected to begin producing power for Newfoundland in November. (Nalcor Energy - image credit)
An aerial photo of the powerhouse on the Muskrat Falls project site, including the spillway and the project's north dam. The hydroelectric dam is expected to begin producing power for Newfoundland in November. (Nalcor Energy - image credit)

Finalization of a deal to stave off imminent power bills surges in Newfoundland is taking longer than first expected, the provincial government confirmed Monday.

When the $5.2-billion agreement-in-principle between the federal government and Newfoundland and Labrador was announced on July 28, government officials said they hoped to have the deal finalized by the end of September.

But it now seems unlikely the deal will be completed by Thursday.

"Work is continuing on the definitive agreements. Things are progressing; however, it appears it may take a little longer," says a statement from the Department of Industry, Energy and Technology sent to CBC News on Monday.

"The deadline was intended to ensure people continued to work diligently. The fact it will likely pass does not affect the work and the conclusion of the definitive agreements."

Sharp hikes to electricity bills for the island portion of the province, as a consequence of the overbudget and behind-schedule Muskrat Falls project, have loomed over the province for years.

In July, Trudeau said the deal would "ensure financial sustainability of the project, while protecting people from major electricity increases."

Innu court injunction application

After the agreement-in-principle was announced, the Innu Nation initiated a court action seeking an injunction on talks to finalize it.

Submitted by Greg Locke
Submitted by Greg Locke

The Innu Nation signed an impact benefits agreement with Muskrat Falls operator Nalcor in exchange for their consent to develop the hydroelectric dam on traditional Innu land.

In a statement of claim filed in court, the Innu Nation says it was not consulted on the rate mitigation agreement-in-principle, and says the deal will dramatically reduce the benefits the Innu receive from Muskrat Falls.

The Innu Nation's lawsuit argues the federal and provincial governments have a duty to consult with them on any rate-mitigation deal. It also seeks damages for any money lost because of the deal.

Newfoundland Supreme Court Justice Alexander MacDonald said he would hand down a decision on the Innu application during the week of Sept. 20.

But on Friday Sept. 24, the provincial, federal and Innu Nation governments issued a joint statement saying all three parties have "requested the Court defer releasing a decision on the injunction application to provide an opportunity for discussions to take place."

The statement also said that the parties "will not be commenting further at this time."

No deal?

It's expected the Muskrat Falls project will be commissioned in late November. Without a deal, the cost of power for electricity ratepayers is expected to increase from 13 cents per kilowatt-hour to just under 23 cents.

Under the agreement-in-principle, rates would rise to 14.7 cents, about a 10 per cent increase.

Government officials anticipate further rate increases of about 2.25 per cent annually.

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