Hydro: Now it's Newfoundlanders who pay

Michael Johansen newsroom@thewesternstar.com
Published on June 16, 2014

Labrador may never be able to separate from Newfoundland, but suddenly the reverse has become a possibility: thanks to the province’s electricity industry Newfoundlanders might soon want to separate from Labrador.

It started almost a year ago when Newfoundland and Labrador Hydro (a wholly-owned Nalcor subsidiary, as it says) announced that in order to fund $39-million worth of industrial expansion in Labrador (justification that has since disappeared and been replaced by the need to pay down a deficit and to help subsidize remote communities) the utility wanted to start charging its Labrador customers substantially more on their monthly bills, while simultaneously lowering electricity costs for Newfoundlanders.

The rate increases were not unexpected. Since the provincial government has been pouring all available (and unavailable) funds into the construction of a dam on Labrador’s Churchill River, there’s nothing left in the public coffers to pay for maintenance, repairs, or upgrades on public facilities and services — including the electrical grid. Since the government is already borrowing to pay for day-to-day operating expenses, the money for Hydro has to come from elsewhere. In 2013 Hydro reasoned it should all come from Labrador and proposed to the Public Utilities Board that Labradorians should pay about 25 per cent more for electricity — bringing the cost up to five cents per kilowatt hour if they live on the grid and up to eight cents if they live in a coastal community.

Not well received

The proposal was not well received in Labrador. Reaction has been overwhelmingly negative. Labradorians of all stripes and position (politicians, business people, homeowners) have denounced the increase whenever they could, but with little expectation that anyone would heed their opposition. Imagine everyone’s surprise, then, when Hydro completely changed its mind and sent a new proposal to the PUB. The utility now wants to let Labradorians off the hook and make Newfoundlanders pay more instead. This is clearly a violation of the natural order. Colonies exist to enrich the colonizers, not to become a drain on the public purse. Resources and the benefits that come from exploiting them are meant to flow in one direction: from the subject territory to the capital, not the other way around.

Labrador’s hydroelectric potential, nickel, iron ore, fish and lumber are there for the island’s benefit. The minute the money seems to flow the other way, from the pockets of Newfoundlanders to the pockets of Labradorians, is the minute when Newfoundlanders are bound to reassess how the province’s finances are managed. That minute wasn’t supposed to happen for another four or five years, when Nalcor’s multi-billion-dollar bill comes due. The fact that islanders will suffer the rate increase right away for something that doesn’t seem to benefit them can only result in Newfoundlanders becoming even more irate than Labradorians have been all year.

Newfoundland and Labrador Hydro couldn’t have found a better way than this sudden about-face to make the province’s sorry political state even sorrier. Some Newfoundlanders will certainly blame Labradorians — and demand the increases go back to them — but they’ll also blame Hydro and with more cause. Furthermore, once they start receiving their higher bills Newfoundlanders will be getting a monthly reminder that because of Nalcor, those bills will keep going up forever.

Unfortunately, since no one in power is listening it’s pointless to point out that the government could still solve its energy and financial problems by cancelling the Muskrat Falls project. If the millions Nalcor spends daily on this single generating facility were reallocated to develop small-scale renewable systems all over the province, every remote community on the coast would probably be able to shut off their diesel generators within two years. Plus, decentralization would protect islanders from extended blackouts in a way that a solitary dam in a faraway location and a single transmission line to bring the power all the way to the island simply cannot. In fact, the Lower Churchill Hydroelectric Project practically guarantees them annual outages in exchange for hefty annual rate increases.

So now Labrador is not only costing island residents more money, but the Big Land is likely to periodically leave Newfoundlanders freezing in the dark. With that in mind, how could they not want to separate?

Michael Johansen is a writer living in North West River, Labrador