Electricity report bolsters Muskrat case

The Newfoundland and Labrador government says another document backs up its claim that Muskrat Falls is the most sensible solution for the province's long-term energy needs.

Natural Resources Minister Jerome Kennedy and Nalcor CEO Ed Martin released the discussion paper, titled Electricity Rates Forecasting, at a news conference on Tuesday.

The paper shows that forecasts under every available energy option call for power to become more expensive. [Read the full document here.]

Kennedy said the increases will be the lowest, and slowest, under Muskrat Falls, the $7.4-billion plan to tap hydroelectric power on Labrador's Churchill River, and then move much of it to Newfoundland, Nova Scotia and potentially other markets.

"It outlines our government's position that Muskrat Falls will result in lower and stabilized electricity rates compared to the isolated island option, being Holyrood," said Kennedy, referring to the oil-burning station in Conception Bay that the government wants to decommission in the coming years.

Under the forecast, the average ratepayer could expect to see energy costs climb by about 18 per cent between 2016 and 2030 if Muskrat Falls comes onstream as planned in 2017. That would amount to an an additional $38 per month.

By contrast, if Muskrat is not sanctioned and the Holyrood plant stays in service, average ratepayer costs are forecast to jump by 38 per cent over the same period. The paper says that translates into an extra monthly cost of $82.

The discussion paper was released the same day talks collapsed on holding a special Muskrat Falls debate in the house of assembly.

The Opposition parties believe the cost projections outlined in the discussion paper would be too low if overall demand for electricity does not increase as much as the government expects.

Another paper on demand is expected to be released Wednesday.