NLIS 11
June 22, 2000 
(Mines and Energy)

Minister responds to Opposition critic's claims

Mines and Energy Minister Paul Dicks says the province is not in a "crunch" when it comes to accessing electric power to meet industrial development requirements. "The issues surrounding energy supply options are complex," said Minister Dicks. "All future supply options are being considered in the government's current energy policy review." The policy review report is expected to be completed at the end of the summer, coincidental with finalization of the natural gas studies and further discussions with respect to the Churchill River Project.

"There are several alternative sources of energy available," said Minister Dicks. "It's a matter of selecting the appropriate mix of projects to provide power in a way that is cost-effective, addresses environmental and technological concerns and at the same time meets the island's overall energy needs." The province must be prudent in considering investment in future supply options to meet both consumer and industrial energy requirements.

The minister added that it is not in the interests of the province, in particular the rate payers, to build significantly excess generating capacity for uncertain future industrial demand. "With respect to the Voisey's Bay development, negotiations are suspended, the province was prepared to participate in a pilot project, but Inco could not guarantee processing on the island beyond a pilot project" said Minister Dicks. "In addition, the energy requirements of a traditional smelter and refinery are significantly greater than those required for the hydrometallurgical processing option. These factors must be considered during the planning phase for any industrial development." 

Newfoundland and Labrador Hydro anticipates that between now and the years 2006/7, it will have a requirement for approximately 100 megawatts of additional generation. On May 16, the province gave Newfoundland and Labrador Hydro the approval to proceed with the 40 megawatt Granite Canal hydroelectric project. This project will meet requirements up to 2003. 

In addition, Minister Dicks reiterated the premier's comments in May of this year that Newfoundland and Labrador Hydro is in active discussions with Corner Brook Pulp and Paper for additional power from a 15 megawatt co-generation project and Abitibi Consolidated for additional power. Both of these initiatives are consistent with the objectives of the energy policy review. 

"The province is also actively exploring wind power as a potential future source as this technology becomes more reliable and cost-effective," said Minister Dicks. The outcome of this work is anticipated over the next few months. 

In addition, the minister says the Churchill River Power Project remains a very competitive, environmentally acceptable supply option particularly for industrial development in Labrador and the export markets. "Alternative development options for the Lower Churchill Project are being studied, environmental work and negotiations with Innu groups are ongoing. Premiers Bouchard and Tobin will meet at the end of the summer to re-assess the status of negotiations with Hydro-Qu�bec.

"In the long-term, the infeed remains a potential solution to supplying the island's power needs. However, federal financing is not forthcoming at this time and the burden of financing the $2.2 billion project it too onerous for the province," said the minister. 

A year ago the premier challenged the oil and gas industry to develop this province's natural gas potential. Significant progress has been made this year towards achieving that objective. Government is actively encouraging the private sector in the development of this resource. The timeframe for implementation of natural gas development and the Churchill Falls hydroelectric development are approximately the same- a decade. Government is continuing with its planning efforts to meet power needs over the next decade.

Media contact: Gary Callahan, (709) 729-4890.

2000 06 22 5:10 p.m.