“If this (agreement) dies….Gull Island dies.”
Former President and CEO of Fortis, and lead negotiator on the Churchill Falls agreement, warned yesterday about what will happen if the province waits until the current 1969 Churchill Falls agreement runs out in 2041.
Barry Perry says the new deal will bring $8 billion in new value to the province over the previous 2024 deal, and access to 2,750 MW – up from about 2,000 in the last MOU.
He says the new Power Purchase Agreements have built-in escalation.
Proposed Gull Island project, courtesy Nalcor.
“Out to 2041, on average, each year, the price goes up 14 per cent. Every year. Beyond 2041, for every year to the end of the contract, the price goes up 2.6 per cent. That is an impressive piece of escalation.”
Perry told the special sitting of the House of Assembly that waiting until 2041 to negotiate a “better deal” would be an “emotionally-driven decision” and not one based on economics. He says if a deal isn’t reached, “Quebec will move on,” and he believes, Canada will withdraw its support.
“It is very clear that Quebec has a big plan. They’re spending $200 billion over the next decade to expand their electricity resources, and they need certainty.
“This would be the second time that we don’t move forward, so they’re not going to trust us again. So from my perspective, they move on (and) Gull Island remains undeveloped.” He says now that the province is on the cusp of finally getting Gull Island developed, “if this (deal) dies, I think Gull Island dies with it.”
In the meantime, on the question of the length of the 50-year deal. Perry revealed that Quebec was seeking a 65-year contract, to which NL said “no.”
