Executive Council
Natural Resources
June 26, 2014
Investing in Reliable Hydroelectricity for Future Generations
Muskrat Falls Project Provides Long-term Value to the Province
The Provincial Government today welcomed the update from Nalcor on the overall value of the Muskrat Falls Project. As outlined by Nalcor, over $30 billion will be returned to the province over the life of the project from sales of excess power and other revenue streams associated with the project.
“From the beginning, the Muskrat Falls project has been about providing the people of the province with clean, reliable electricity at the least cost. The project will also provide a return of more than $30 billion over the life of the project that will benefit Newfoundlanders and Labradorians for decades to come.”
- The Honourable Tom Marshall, Premier of Newfoundland and Labrador
As announced by Nalcor today, the value of the Muskrat Falls project has benefitted since Decision Gate 3 (DG3) numbers were released in October 2012. This is a result of an additional $300 million by negotiating better terms for financing the project, and an additional $100 million in revenues from market agreements for the sale of export energy.
With detailed engineering for the Muskrat Falls Project now 98 per cent complete, capital costs are $6.990 billion. At the time of the DG3 release, the capital cost of the project was estimated to be $6.202 billion and the engineering design was approximately 50 per cent complete.
Through our investment in the Muskrat Falls project, we are stabilizing electricity rates by removing the volatility that we experience today due to a reliance on foreign fuel. As a result of the new capital costs, rates up to 2023 on the Island may be seven per cent (between 1.1 to 1.3 cents per kilowatt hour) above what was projected at the time of sanction in 2012. Rates in Newfoundland and Labrador remain some of the lowest in the country.
“The ratepayers of the province have always been the primary focus for this government in pursuing the Muskrat Falls Project. Our government has recognized that when first power comes from the project and rates are affected, the government at the time would decide what to do with the return coming from the project. We maintain that position. If first power were flowing today, our government would use money from the project’s revenue streams to offset the increases in electricity rates over and above what we anticipated at sanction. We have remained committed to doing what is in the best interest of ratepayers.”
- Premier Marshall
During the construction phase of the project, business, income and employment benefits, as well as taxation revenue, will account for an additional $3 billion in value to the province.
“Before construction began, a decade of extensive research and planning was undertaken to verify that the Muskrat Falls Project was a reliable, least cost source of energy that would result in long-term stable rates. With today’s update from Nalcor, it is clear that we are continuing to head in the right direction − a least cost project providing reliable power, stable rates, substantial economic and employment benefits, and returns to the province for future generations.”
- The Honourable Derrick Dalley, Minister of Natural Resources
Also released today was the power purchase agreement between Hydro and Muskrat Falls Corporation available at https://muskratfalls.nalcorenergy.com/newsroom/reports/
The Provincial Government will continue to undertake prudent oversight of the Muskrat Falls project as it moves into the construction and operation stages. The oversight committee will be providing an update to the public in July.
QUICK FACTS- The Provincial Government today welcomed the update from Nalcor about the overall value of the Muskrat Falls Project which will return over $30 billion to the province from sales of excess power and other revenue streams associated with the project.
- The overall value to the province takes into account many factors including revenue, costs, reliable power and stable rates.
- As of April 2014, substantial employment and economic benefits from the Muskrat Falls project have already been realized across the province, with approximately 85 per cent of the project’s workforce from Newfoundland and Labrador and more than $455 million invested in businesses in the province since the start of construction in January 2013.
- Decision Gate 3 (DG3) cost estimate for the Muskrat Falls project was announced on October 30, 2012. More information is available at //www.releases.gov.nl.ca/releases/2012/exec/1030n01.htm.
- Sanction of the Muskrat Falls project was announced on December 17, 2012. More information is available at //www.releases.gov.nl.ca/releases/2012/exec/1217n11.htm.
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Media contacts:
| Milly Brown Director of Communications Office of the Premier 709-729-3960 MillyBrown@gov.nl.ca |
James Sheppard Press Secretary Office of the Premier 709-729-4304, 727-0850 jamessheppard@gov.nl.ca |
| Diana Quinton Director of Communications Department of Natural Resources 709-729-5282, 631-8155 dianaquinton@gov.nl.ca |
2014 06 26 3:50 p.m.