POLITICS

Muskrat Falls hydro project in Labrador should be delayed, report says

01/11/2012 12:29 EST | Updated 03/12/2012 05:12 EDT
ST. JOHN'S, N.L. - A report released today by the C.D. Howe Institute says Newfoundland and Labrador should delay its plans to develop the Muskrat Falls hydroelectric project.

In the report, Memorial University economist James Feehan says the provincial government should first reform regulations that he says support excessive power consumption.

Feehan says if prices better reflect the true costs of producing electricity, then consumption will fall and the need for the Muskrat Falls project wouldn't be as great.

Nalcor Energy, the provincial Crown energy company, favours developing the Muskrat Falls site in Labrador and bringing its electricity to the island as well as the Maritime provinces via a subsea cable.

Feehan says the province should put that off until the oil-fired Holyrood, N.L., facility starts to reach the end of its life cycle.

He also says Newfoundland should proceed with a strategy to bring wind and small on-island hydro facilities onto their energy system.