Premier François Legault said on Friday that he understood “the frustration and anger” of Newfoundlanders regarding the Churchill Falls electricity supply contract.
Contrite, he said he was open to discussing new dam projects with his counterpart Andrew Furey, at the end of a two-day official visit to Saint-Jean, with a view to renewing this agreement.
The contract for this dam located in Labrador would have brought in more than $28 billion in Quebec since it was signed in 1969, compared to only $2 billion in Newfoundland and Labrador (NL). And the next round will have to include the Innus, specified the two partners.
Mr. Legault pronounced an act of contrition addressed to Newfoundlanders, which had never been done by a Premier of Quebec before.
This is in addition to its desire expressed this week to offer financial compensation to the neighboring province before the end of the agreement in 2041, in order to encourage it to renew it.
“We cannot rewrite history, but we can try, for the future, to find ways of working together for the benefit of both,” he declared Friday morning at a press conference in Saint-Jean at the side of Mr. Furey, at the end of a meeting described as “productive”.
“It’s a good sign, it’s symbolic that the Prime Minister of Quebec went here,” commented Mr. Furey, recalling that this contract is humiliating for his fellow citizens.
“It shows he has an understanding of the impact for us. »
Countdown
Even if the contract ends in 18 years, the countdown is already on, although Mr. Legault has hinted that there has been no question of a timetable.
“For the moment, it is a question of high-level talks on the art of the possible”, qualified Mr. Furey, refusing to open his game on his requests.
“I would like to say a few words to the citizens of your province,” said Mr. Legault in English. I totally understand the frustration and anger you feel about the Churchill Falls contract. »
Mr. Legault acknowledged that it had become “really a bad contract” for Newfoundlanders “over time”.
He handed them an olive branch…and a lifeline. He said he was “open to looking at other projects”, without specifying which ones. However, we know that Newfoundland is having serious financial difficulties with the Muskratt Falls dam project, also in Labrador: its bill now amounts to more than $13 billion. Quebec could thus potentially come to the rescue.
To add to the complexity, the two partners intend to discuss with the Innu. Those in Uashat mak Mani-utenam have filed a $2.2 billion lawsuit against Hydro over Churchill Falls, and those in Labrador are seeking $4 billion.
“It’s important to have discussions with the Innu peoples,” admitted the head of the Quebec government.
Fixed price
Hydro-Quebec pays a fixed rate for the electricity produced by Churchill Falls, or 0.2 cents per kilowatt-hour, but resold it on average at 8.2 cents per kilowatt-hour in 2022, the company said. status this week.
According to data from a study by a Newfoundland committee, in 2019, the agreement had brought in benefits of nearly $28 billion in Quebec, compared to only $2 billion in Newfoundland and Labrador. The committee recommended that TNL renew the contract.
The agreement allows Hydro-Quebec to buy 85% of the electricity produced at Churchill Falls and therefore to reap most of the profits. The remaining 15% block is used to supply Newfoundland grid customers in Labrador, or is sold in export markets.
Over the years, several court judgments have confirmed the validity of this commercial agreement.
Condemned to agree?
Churchill Falls is a centerpiece of Quebec’s energy strategy and generates a third of Hydro-Quebec’s profits, while the state-owned company’s electricity surpluses are melting visibly. Thus, Quebec is already considering building four or five new dams to generate the 100 terawatt-hours needed to decarbonize the economy by 2050.
For its part, Newfoundland and Labrador needs the high voltage lines of its Quebec partner if it wants to export its energy, even if Mr. Furey says he is in a “position of strength”. The province is also sinking into financial disaster with its Muskrat Falls hydroelectric dam project. The addition of a possible partner could be of great help to him.
Churchill Falls represents 15% of Hydro-Quebec’s 210 terawatt-hour capacity. The plant has an installed capacity of 5428 megawatts.