Minister Noel says Opposition misinformed on Hydro issues

Mines and Energy Minister Walter Noel says Tory leader Williams is misleading the public about government policies, and failing to clarify his own.

"He is deliberately distorting facts," Minister Noel says. "Mr. Williams has quoted me as saying �we�re going to buy Newfoundland Light and Power.� I have never said that. No decision has been made, other than to assess the possibility, just as the people of the province have indicated they feel should be done, though Williams seems to feel we couldn�t afford it.

"The PCs also continue suggesting that Hydro�s payment of dividends to the people of the province is the reason for the latest rate increase application. That is not true. Dividend payments come from Hydro�s profits, primarily made on sales to Quebec, not from the costs on which rates are based. If Hydro retained more earnings, it would have no effect on Hydro�s application, or the Public Utilities Board�s (PUB) decision. If government did not take dividends, Hydro would use profits to pay down debt or reduce borrowing for its capital works. This would increase the equity that Newfoundlanders and Labradorians own in Hydro, and could cause rates to increase because equity is more expensive than debt.

"The Tory leader appears to believe taxpayers should not be paid for their investment in Hydro. How would he make up for the revenue government would lose from this source? Would he cut services or increase taxes? He continues criticizing without proposing solutions. Why doesn�t he say what he would do?"

Media contact: Darrell Mercer, Communications, (709) 729-5777.

2003 08 18                                       4:10 p.m.