Churchill River Power Project|
Negotiations between Newfoundland and Labrador Hydro (NLH) and Hydro Québec (HQ) on the Churchill River
Power Project resumed in the fall of 2000, following a pause during the summer. Since it was originally
announced in 1998, the project has evolved into one with a reduced scope and a less complex commercial
arrangement. These refinements have occurred as a result of commercial negotiations, and increased
knowledge resulting from economic analysis, engineering, and environmental work. The Gull Island
development remains the cornerstone of the project. With a remarkably small flooding footprint of 85 sq.
km, Gull Island is one of the best undeveloped hydroelectric sites in North America.
The current proposal involves Newfoundland and Labrador ownership and operation of a new generation
station at Gull Island and two 735 kv transmission lines in Labrador (Gull Island to Churchill Falls,
and Gull Island to Québec). Negotiations are currently underway to sell the energy to HQ, but do not
involve HQ as an equity partner in the Labrador development. It is proposed that HQ would be
responsible for any new transmission capacity required in Québec.
|Source: Newfoundland & Labrador Hydro|
Gull Island Development—Artist’s Rendition
With an estimated capital investment of approximately $4 billion in Labrador and production capacity of
approximately 2,000 MW, this renewable energy development has the potential to contribute significantly
to the provincial economy during both the development (proposed for 2004-2010) and production
phases (anticipated to commence in 2010) of the project.
Progress has also been made in negotiations between NLH and the Innu Nation on an Impact and Benefits
Agreement. The Province is committed to ongoing discussion and consultation with the Innu on the
Upper Churchill (Recall/GWAC)
In 1998, the Province exercised its right to recall the remaining 130 MW of power of the 300 MW
available under the original Upper Churchill contract. Since 1998, NLH has realized approximately
$68.5 million in profit from the sale of this power back to HQ. A new three year contract has recently
been signed with HQ which will provide NLH with an estimated profit of $80 million over this term. NLH
retains unlimited rights to recall the power to meet new domestic demand in Labrador.
In 1999, the Churchill Falls (Labrador) Corporation (CF(L)Co) and HQ executed the Guaranteed Winter
Availability Contract (GWAC) to use an additional 680 MW of capacity from the Upper Churchill plant.
As of January 31, 2001, CF(L)Co has earned revenues of $14.5 million from the GWAC contract. Total CF
(L)Co revenues over the term of this contract (which expires in 2041) are estimated to be $1.5
billion. Newfoundland and Labrador’s share of this total is estimated to be approximately $1 billion.