Hydro-Québec suing over Churchill Falls contract rights

Hydro-Québec is going to court over its rights under the Churchill Falls power deal, saying recent positions taken by CF(L)Co are "ill-founded."

The hydro company is seeking a judgment from the Quebec Superior Court, which it says has exclusive jurisdiction on contract disputes.

In a press release, Hydro-Québec says the 1969 Churchill Falls power deal gives the company "certain essential rights."

Those include the exclusive right to purchase virtually all of the power produced by the generating station until 2041, and the right to benefit from "operational flexibility."

But Hydro-Québec claims recent positions taken by CF(L)Co, which operates the facility, will deprive them of that flexibility, by forcing the company to take only fixed monthly blocks of energy from 2016 onwards.

Hydro-Québec wants the court to confirm that its requests for energy won’t be constrained to those fixed monthly blocks.

As well, Hydro-Québec wants the court to block sales of Churchill Falls power of more than 300 megawatts to third parties, including Newfoundland and Labrador Hydro.

Ed Martin, CEO of Newfoundland and Labrador’s Crown-owned Nalcor Energy, said late Monday afternoon that he just became aware of the court action.

"I've really got to find out what they're saying," Martin told reporters at an unrelated briefing on the Nova Scotia regulator’s review of the Maritime Link for the Muskrat Falls hydro project.

"I have no idea...  I really don't know what the content is at this moment."

CF(L)Co, which runs the Churchill Falls power plant, is a subsidiary of Newfoundland and Labrador Hydro. It is 65.8 per cent owned by parent company Nalcor, and 34.2 per cent by Hydro-Québec.