Power Projects

  • Partial diversion of Romaine River and increased utilization of the 11 existing generators at Upper Churchill.
  • Gull Island - new generating station (2,264 MW).
  • Transmission lines - two 735 kv lines - Gull Island to Churchill Falls and Gull Island to Québec.
  • Muskrat Falls - feasibility study completed. Not economically feasible at this time.
  • Infeed to Island - subject to negotiations with federal government.
  • Estimated cost between $7 and $10 billion.

  • Sign inter-utility Memorandum of Understanding.
  • Award environment and engineering contracts worth about $30 million.
  • Complete Environmental Assessment Memorandum of Understanding.
  • Appointment of Environmental Assessment Panel.
  • Establishment of joint project office in the Province.
  • Conclusion of Impact Benefits Agreements negotiations with Innu groups.

CHURCHILL RIVER POWER

Newfoundland and Labrador Hydro and Hydro-Québec have made significant progress on major issues and are finalizing legal and technical agreements with respect to completing a Memorandum of Understanding on developing the Lower Churchill. Progress in 1998 and 1999 includes the following:

Recall/GWAC
In December 1998, the utilities signed a three-year agreement worth almost $80 million, which allowed the Province to recall 130 MW of power from the Upper Churchill and re-sell it to Hydro-Québec at current market prices. To date, the Province has received about $68 million in additional revenues. In addition, the Guaranteed Winter Availability Contract (GWAC) was ratified by both utilities in June 1999. The GWAC increases Newfoundland’s take on the 1969 power contract by ensuring maximum capacity is available for sale to Hydro-Québec during winter months: it will provide over $1 billion to the Province between 1998 and 2041.

Project Optimization
The original development plan, announced in March 1998, proposed to partially divert two Québec rivers (Romaine and St. Jean) into Labrador and to install additional generating capacity on the Upper Churchill River. In June 1999, following detailed engineering studies, the utilities agreed to partially divert only the Romaine River into the Smallwood Reservoir and to increase the utilization rate of the 11 generators at the existing Upper Churchill facility, rather than construct a new generating plant. Almost the same amount of energy can be produced at a significantly reduced cost, which means increased profits, with fewer environmental effects.

Economic Benefits
Power Purchase Agreements will be based on market prices with a price floor for energy sold to the U.S. and Canadian markets (outside Québec). This will ensure that, no matter how low prices go, the project will have sufficient revenues to cover debt incurred during construction. A progressive royalty regime and project management agreements are also being negotiated. Benefits for Newfoundland and Labrador will be maximized. The head office for the project will be based in Newfoundland and Labrador, and engineering and procurement will also be based out of this province. 


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