He who pays the piper …

Russell Wangersky
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The devil is clearly in the details. And those details, well, they can sure take a long time to surface.

Right in the midst of the provincial election, the provincial government and its energy company, Nalcor, got a shot in the arm for the Muskrat Falls project following the release of a $250,000 report from Navigant Consulting supporting the project.

“We were happy about getting it at this time because we knew we probably weren’t going to get the PUB report until later in the year or until early spring. And I really wanted the people to have something that was independent of all of us for them to consider before we went to the election, so I’m really glad we have it,” Premier Kathy Dunderdale said at the time.

At the time, there was criticism of the project because Navigant used Nalcor’s own material to undertake the review, and didn’t do extensive outside research. The report even carried its own disclaimer: “‘This independent report was prepared by Navigant Consulting Ltd. (Navigant) for Nalcor Energy based upon information provided by Nalcor Energy and from other sources. Use of this report by any third party for whatever purpose should not, and does not, absolve such third party from using due diligence in verifying the report's contents.’”

The fact is, though, for at least some of that material, Navigant may well have been very familiar with the information involved.


Lower Churchill power projects have been a healthy source of contracts for consultants and lawyers for decades — close to $400 million has been spent on a variety of attempts to bring such projects to fruition.

What’s interesting is that, as well as the September review of Nalcor’s work, Navigant has undertaken some 30 contracts for this province’s provincial energy firm. They are a trusted adviser, regularly called upon for work.

This comes from a PUB request for information, document No. 100, breaking down all the work already done for Nalcor or Newfoundland Hydro by Navigant or by its corporate predecessor, Reed Consulting. Nalcor’s notes describe the 31 separate projects this way: “As can be observed in the table below, Navigant has completed a number of assignments for Nalcor on a variety of electricity market related matters.”

‰    September 2011 — Independent supply decision review (DG2) prepared for Nalcor Energy

‰    May 2011 — Lower Churchill Ontario Market Update and Strategy Advice Report

‰    September 2010 — Support for Joint Review Panel Hearings and Preparations

‰    May to June 2010 — Advice and assessment of market potential in Eastern Canada & North Eastern U.S.

‰    December 2008 to present — Provide ongoing advice related to the ON electricity market in support of negotiations with OPA

‰    March 2008 to September 2008 — Estimate of Ontario’s avoided capital and operating expenses during the 2015-2035 time frame under various LCP import scenarios

‰    November 2007 to October 2008 — Advice on pricing elements and principles for long-term PPAs with OPA, NSPI and NB Power

‰    February 2008 — Eastern Market Assessment Report

‰    May to August 2007 — Eastern Canadian market report and update

‰    October 2006 — Ontario Capacity Prices

‰    August 2006 — 2006 Ontario Wholesale Power Market Assessment (Multi-Client Study)

‰    July 2006 — U.S. Northeast Market Plan for Lower Churchill Project

‰    June 2006 —Review of ON Supply Mix Directive

‰    April 2006 — Review of New England Ph1/11 HVDC facilities and identification of parties holding transmission rights

‰    March 2006 — Ontario Market Developments Report — March 2006 update

‰    2006 — Review of IESO Reliability report

‰    March 2006 — Review of OPA Supply Mix Report

‰    February 2006 — Eastern Canadian Market Assessment Report

‰    November 2005 — Quebec Transmission issues

‰    June 2004 — Overview of Ontario, Quebec and Maritime Electricity markets

‰    December 2002 — Gull Island Contract Analysis

‰    October 2002 — Ontario summer 2002 wholesale market assessment and market price forecast

‰    January 2002 — Summary of Northeast Transmission Projects

‰    December 2001 — Presentation for LCP on export market assessment

‰    December 2001 — Ontario wholesale market assessment

‰    December 2001 — Overview of New England Power Market

‰    February to March 2000 — Reference Pricing Issues: Review of Reference Pricing, Hedging and Market Influence Issues

‰    October 1999 — Labrador Hydro Project export market price forecast update

‰    May 1999 — Average pricing forecast

‰    October 1998 to January 1999 — Assessment of market pricing mechanisms for LCP

‰    May 1998 — Churchill River Project export market study

Some of the contracts are more interesting than others — like, for example, the fact that Navigant was hired to help Nalcor prepare to put the Muskrat Falls project forward to the joint federal-provincial environmental panel.

Another interesting facet? At least 10 of the projects specifically mention work on Lower Churchill power projects.

And how did Navigant get the job as “independent reviewer” of the project?

Here’s Nalcor’s explanation, from PUB document No. 96: “Navigant submitted a proposal to Nalcor on May 20, 2011 to undertake the Independent Supply Decision Review. The contract between Nalcor and Navigant was executed June 30, 2011.”

Dates are an interesting thing, so I asked for a copy of Nalcor’s request for proposals for the work. Haven’t heard back yet.

Was it a truly independent analysis? OK: Nalcor certainly believes that it was. Here’s Nalcor boss Ed Martin, talking to The Canadian Press news service last September: “I think for anyone to believe that a company like Navigant would not give an independent assessment — that’s what they do. They’re one of the biggest. They’re one of the best and they’ve given us a report that we can stand by.”


Now, that might be a whole different kind of question.

Russell Wangersky is editorial page editor of the St. John’s Telegram. He can be reached by email at rwanger@thetelegram.com.

Organizations: Navigant Consulting Ltd., Nalcor Energy, NB Power Ontario Wholesale Power Market Assessment Canadian Press

Geographic location: Ontario, U.S. Northeast, Canadian Market Quebec Northeast Transmission Projects Labrador Churchill River

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