POLITICS
04/03/2012 12:00 EDT | Updated 06/03/2012 05:12 EDT

Former premier Danny Williams blasts regulatory board over Muskrat Falls review

ST. JOHN'S, N.L. - The Newfoundland and Labrador Public Utilities Board showed bias when it issued an inconclusive report on the Muskrat Falls hydroelectric megaproject, former premier Danny Williams charged Tuesday.

Williams has championed the proposed $6.2-billion development that was announced just before he retired from politics in the fall of 2010.

On Monday the Public Utilities Board said it couldn't assess whether the Muskrat Falls plan to bring electricity from Labrador to Newfoundland would cost less than if the island generates its own energy. The board said it didn't have enough information and cited gaps in the reliability of the development.

Williams says past comments by board members indicate that judgments about the project had already been made.

Board chairman Andy Wells, the former St. John's mayor who was appointed by Williams, has described efforts to get Muskrat Falls documentation from Nalcor as "torturous."

Nalcor and Nova Scotia's private utility Emera (TSX:EMA) are working on a deal to jointly fund the venture.

"I have never before seen a quasi-judicial body make such negative and prejudicial statements in the middle of a review," Williams said in a statement emailed to media Tuesday.

"It concerned me greatly at the time, but I had hoped those careless comments would not have carried over into the final report. Clearly, those opinions formed the basis of the final document as the board had backed itself into a corner several months ago with such strong statements."

Premier Kathy Dunderdale said Monday that she's also disappointed and puzzled by the board's failure to make a recommendation, calling it a waste of nine months and $2 million.

Both Dunderdale and Williams said it's especially baffling because others, including Manitoba Hydro International and the province's consumer advocate, concluded Muskrat Falls is the cheapest option using the same data that was available to the board.

Its refusal to endorse the project prompted Dunderdale to announce another review by Manitoba Hydro International of more updated cost projections, along with new reports on natural gas and wind options. She said those documents will be tabled in the legislature, and she agreed to a special debate and vote on Muskrat Falls — as opposition parties have long demanded.

The Progressive Conservative government, which holds a large majority in the legislature, had hoped to decide this spring on whether to sanction the development. Dunderdale says the most current costs won't be available until at least June.

She plans to recall the legislature from summer recess if necessary to debate whether Muskrat Falls should go ahead.

Nalcor CEO Ed Martin said in an interview that his team is focused on getting updated costs to the government as soon as possible. He stressed that Manitoba Hydro International found that Muskrat Falls would be about $2.2 billion cheaper through 2067 than if Newfoundland generates its own power — although it warned of construction costs and other risks that could throw those numbers.

Engineering and other prep work continues as Nalcor spends between $12 million and $15 million a month on Muskrat Falls, Nalcor confirmed Tuesday. Total money spent specifically on the project up to Dec. 31 is $178.9 million, according to Nalcor figures.

Cash spent on efforts to develop the Gull Island section of the Churchill River, along with lower Churchill River work done in previous decades, adds up to a total of $447.5 million, said Nalcor spokeswoman Karen O'Neill.

"This includes $118.7 million spent by prior administrations between the 1970s up to 2003 which has been written off," she said in an emailed response.