Executive Council
June 27, 2007

Province Signs MOU with Rhode Island for
Possible Purchase of Lower Churchill Power

The merits of a long-term purchase and sale agreement for the export of Lower Churchill power to Rhode Island will be assessed with the signing today of a Memorandum of Understanding (MOU) between Newfoundland and Labrador and the State of Rhode Island.

The MOU was announced by the Honourable Danny Williams, Premier of Newfoundland and Labrador, and Donald L. Carcieri, Governor of Rhode Island, during the Conference of New England Governors and Eastern Canadian Premiers in Prince Edward Island.

"Our jurisdictions have entered into an MOU to explore the merits of exporting our hydro power to meet their energy needs. This is a mutually beneficial arrangement for our two jurisdictions," Premier Williams said. "It is clear that our clean, renewable hydro power is a sought after commodity for a continent in need of environmentally-friendly power sources to help reduce greenhouse gases emissions. Rhode Island is a leader among the New England states in this area and they have recognized the potential of our hydro resource in assisting them meet their goals."

The MOU provides for the analysis and assessment of a potential power purchase of up to 200 megawatts of electricity by the year 2015. Newfoundland and Labrador Hydro, on behalf of the Government of Newfoundland and Labrador, will enter into discussions with the State of Rhode Island.

"The State of Rhode Island is interested in exploring new supplies of clean and renewable power to meet the energy needs of our residents," Governor Carcieri said. "We have taken a significant step today toward securing a new source of power that is in step with our Five-Point Energy Agenda. I thank Premier Williams for his personal commitment to making this happen."

The MOU institutes a two-phase process to explore a possible arrangement for the sale and purchase of power. The first part of the process is a six-month mutual assessment of the merits of long-term sale and purchase agreement, as well as the development of an action plan to address any technical, regulatory and statutory requirements of the transaction. Upon completion of Phase I, the parties may enter Phase 2 negotiations for a binding agreement on the sale and purchase of power.

"Today marks another significant step in the development of the Lower Churchill Project," Premier Williams said. "Identifying markets for Lower Churchill power will strengthen our position in securing the financing for the project. The signing of the MOU with our friends from Rhode Island is part of our commitment to ensuring long-term benefit from our resources for the people of Labrador and Newfoundland."

The Lower Churchill Project includes the development of two hydroelectric sites on the lower Churchill River � Gull Island and Muskrat Falls. The potential energy to be generated from the proposed 2,824 MW development is enough electricity to power close to 1.5 million homes and could displace over 16 mega tonnes of carbon dioxide emissions every year, equivalent to the annual greenhouse gas emissions from 3.2 million automobiles.


Media contacts:

Elizabeth Matthews
Director of Communications
Office of the Premier
709-729-3960, 351-1227
Jeff Neal
Press Secretary Governor�s Office
Rhode Island

2007 06 27                                                         2:15 p.m.


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