'It created some danger for me': Kathy Dunderdale says Muskrat debate got very personal

Former Newfoundland and Labrador premier Kathy Dunderdale reflected Wednesday on the intensity of the public debate about Muskrat Falls during her time in politics, telling the inquiry investigating the controversial project that "it created some danger for me."

The revelation came during her third consecutive day of testimony, with Dunderdale continuing to tread lightly when it came to any criticism of government-owned Nalcor Energy, the politicians and bureaucrats she worked with during her 11 years in politics, and the massively over-budget and delayed project.

That's despite evidence that information about some risks related to the project was not disclosed to her, including a report just prior to sanctioning six years ago that gave the chances of delivering first power on schedule in mid-2017 at just one per cent.

The report by an external risk consultant was delivered to Nalcor on the eve of project approval, and if it materialized, would mean significant delays and increased costs for the publicly funded project.

But that information was not conveyed to Dunderdale by Ed Martin, the former CEO and architect of Muskrat Falls, and she said she would have delayed sanctioning if she knew there was merit to the report.

If the schedule would put the project behind significantly and would cost billions of dollars overrun, I could tell him most assuredly it wouldn't have been approved.- Kathy Dunderdale

"If the schedule would put the project behind significantly and would cost billions of dollars overrun, I could tell him most assuredly it wouldn't have been approved," she said.

It was the closest Dunderdale came to condemning Martin or the team leading the project, but she quickly added she was told all the schedule risks were under control, and was assured by Martin that the $6.2-billion capital cost estimate was a good one, with the possibility of it growing by up to $500 million if some things went wrong.

"You have to be able to rely on the information that you're given. And the information we were given at sanction was that these numbers are pretty reliable, as much as humanly possible," she stated.

But construction costs have since soared to $10.1 billion, first power from Muskrat is delayed until at least next year, and an inquiry is now underway to find out what went wrong.

No review of strategic risk

The independent review by consultants with Manitoba Hydro International also featured heavily during Wednesday's testimony.

MHI was hired by government in April 2012 to scrutinize the project, but it was not permitted to do a risk analysis of the final cost estimates or examine what strategic risks the project might be exposed to.

MHI eventually concluded that a new power supply for Newfoundland was needed, and that Muskrat was the least-cost option. But evidence brought out at the inquiry, including examples that the report was heavily edited, have raised questions about its credibility.

Dunderdale could not recall if she knew about the limitations on the review, and when asked if she was briefed by her senior staff about this, Dunderdale said: "I can't say one way or another."

She again appeared to express complete confidence in Nalcor that all the risks had been mitigated, and listed a series of project reviews she says upheld Nalcor's position that Muskrat was the right project.

That elicited this response from Geoff Budden, lawyer for the Muskrat Falls Concerned Citizens' Coalition, which has full standing at the inquiry:

"I say where we're to, Ms. Dunderdale, is that if an expert agrees with you, you cherry-pick that expert. If an expert or panel or other body disagrees with you, you ignore them. That's what happened here," said Budden.

"I don't agree with that, Mr. Budden," Dunderdale replied.

No love for Hydro-Quebec

And in another surprising acknowledgement, Dunderdale said she probably would never have supported the idea of buying power from Hydro-Quebec in order to meet Newfoundland's future electricity needs.

That option was screened out early in the review process that eventually led to the decision to approve Muskrat Falls, and some have criticized the fact that Nalcor did not engage in any formal talks with Quebec about such an arrangement.

So what about the idea of not building a major project like Muskrat, and entering into a power purchase agreement with Quebec to buy power from the Upper Churchill generating station?

Dunderdale essentially dismissed the idea, citing a long history of soured relations with Quebec.

I personally would have had the greatest difficulty, as would others in our government, in putting all our reliability on Hydro-Quebec to provide service to the people of the province under any circumstance, given some of their actions.- Kathy Dunderdale

"I personally would have had the greatest difficulty, as would others in our government, in putting all our reliability on Hydro-Quebec to provide service to the people of the province under any circumstance, given some of their actions completely outside of anything to do with the upper Churchill," she said.

Meanwhile, under cross-examination from Budden, Dunderdale was challenged about the aggressive way in which some members of her government — most notably then-natural resources minister Jerome Kennedy — were reacting to criticism of the hydro project.

At one point during a speech in Corner Brook, Kennedy accused David Vardy, a former chairman of the Public Utilities Board and outspoken opponent of Muskrat, of advocating for the closure of the newsprint mill in the west coast city.

Kennedy expressed regret for his comments during his recent appearance at the inquiry, and Dunderdale said Wednesday she did not support such attacks against citizens.

But Dunderdale said it wasn't an easy ride for her, either, and without giving any names, pointed the finger at some members of the Concerned Citizens' Coalition for what she called "horrible" personal attacks against her on social media websites and online blogs.

"Members of your group would notify people if I happen to be downtown after supper. With friends out to dinner. Where I was and where I could be located. It created some danger for me that made me very uncomfortable," she said.

As for the inquiry, Dunderdale supports the investigation.

"I want to know what went wrong," she said.

But in a sign that she believes strongly in her government's approach to the planning and prosecution of Muskrat Falls, she stated, "I don't believe we missed something."

Dunderdale is expected to conclude her testimony on Thursday, marking the end of Phase 1 of the inquiry, which is investigating the decision to sanction Muskrat Falls.

The second phase, probing cost and schedule overruns, will begin in early 2019.

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