François Legault is enthusiastic about the idea of negotiating the supply of hydroelectricity with Newfoundland and Labrador. His opposite, Andrew Furey, is less so.
Meeting with his counterparts from the Atlantic provinces and governors of the New England region on Monday in Quebec, Mr. Legault expressed his great ambitions for the future of the energy partnership with the neighboring province. “What we want is more capacity, which comes from the possible increase [du barrage] of Churchill Falls and the construction [du barrage] of Gull Island” in Labrador, he said at the end of a day of discussion on the themes of energy and the reduction of greenhouse gases.
Not so fast, Mr. Furey replied. To reopen negotiations, Quebec will first have to “correct” the historical imbalance created by Hydro-Québec’s contract with Churchill Falls.
The message to the Legault government is simple: prepare to empty its piggy bank. “ Show us the money! » launched the Newfoundland premier on Monday morning.
The Churchill Falls electricity supply contract with Hydro-Québec allows the Quebec state-owned company to purchase energy from the Labrador dam at a fixed rate of 0.2 cents per kilowatt hour, and has done so for years 1960. In 2022, Hydro resold this hydroelectricity at 8.2 cents per kilowatt hour on average.
Mr. Furey intends at all costs to avoid such an imbalance from happening again. “We are open to suggestions and proposals, but we will not fall into the traps of the past,” he said on Monday during a press conference where he was seated just a few meters from Mr. Legault. .
act of contrition
Last February, during an official visit to Saint-Jean, the Premier of Quebec said he understood the “frustration and anger” of Newfoundlanders regarding the agreement that is more than 50 years old. He also mentioned the idea of offering financial compensation to the neighboring province before the end of the agreement in 2041.
However, Quebec is not alone in coveting the electricity produced at Churchill Falls. Nor the possible one that could come from the Gull Island dam project, to the east. “It’s not exclusively Hydro-Québec. There are other customers who are interested in [ces projets] “, indicated Mr. Furey on Monday.
Be careful, however: Quebec has an ace up its sleeve. “To get electricity out of Newfoundland and Labrador, you need a transmission line,” Prime Minister Legault reminded his counterpart.
Monday’s press conference was marked by a series of small disagreements between the CAQ elected official and his Newfoundland Liberal counterpart. Mr. Legault expects to be able to find a “win-win” agreement and is even moving forward on the Gull Island site, saying he is “very open” to participating in the financial arrangement of the possible dam. Mr. Furey, for his part, refrains from showing his hand.
” The Prime Minister [Legault] went a little further than I would have gone. I don’t think it’s appropriate to negotiate in the public arena,” he said.
Lucrative contract
The Churchill Falls dam currently represents some 15% of Hydro-Québec’s energy needs. Without this contract, the state-owned company, which has seen its electricity surpluses disappear at great speed in recent years, would be deprived of an important source of income. In 2019, Churchill Falls had brought in more than $28 billion in Quebec since its signing.
There is still electricity produced in Quebec, but the avenues are rare. Prime Minister Legault closed the door to nuclear energy last week. The addition of dams in Quebec — on the Magpie or Petit Mécatina rivers, for example — is only at the analysis stage.
François Legault believes he is at the stage of “putting numbers on the table” to renegotiate the Churchill Falls agreement. The new president and CEO of Hydro-Québec, Michael Sabia, should hold “physical meetings” on this subject “in the coming weeks,” he said Monday.
With The Canadian Press