Study finds Muskrat Falls is cheapest power option

A study conducted for the Nova Scotia government says buying electricity from the proposed Muskrat Falls hydroelectric project would be $402 million cheaper than importing it from Quebec.

The study, released Thursday by consultant John Dalton, concludes that supporting the Labrador project would cost $1.5 billion less than using a mix of wind and natural gas over the 35-year life of the commercial contract for the hydro project.

The projected costs are based on 2017 dollars, which is when the project is expected to be online.

The study uses a computer model to compare the differences in the costs between the three options considered.

In the case of Québec Hydro, Dalton — the president of Power Advisory in Carlisle, Mass. — said Muskrat Falls would help Nova Scotia avoid transmission tariffs described as "relatively high."

The report said the greatest uncertainty in generating more power through wind and gas would be the cost of upgrading gas pipelines, estimated to be in the hundreds of millions of dollars.

Study to be entered as evidence

Dalton's study may be entered as evidence at regulatory hearings to be conducted by the Nova Scotia Utility and Review Board, meaning it would be subject to questioning by intervenors.

Nova Scotia Premier Darrell Dexter announced last month that the report was ongoing, three months after it was launched.

When asked why he kept the study under wraps, Dexter initially indicated he did not want the media pestering Dalton's company. The premier later said that the only thing that mattered was that the work was being done.

Dalton's report follows several commissioned on behalf of the government of Newfoundland and Labrador, which approved the $7.7-billion project last month.

Critics in that province have questioned the efficacy of reports that weren't vetted by a public regulator and also accused the government of ignoring other reports by the province's Public Utilities Board and a joint federal-provincial environmental review panel.

Those reports concluded that Muskrat Falls had not been proven to be the cheapest or even necessary option to meet Newfoundland and Labrador's needs.

Emera's role in the project is to build a 180-kilometre subsea cable known as the Maritime Link, which would ship power from Cape Ray in southwestern Newfoundland to Lingan, in Cape Breton. That is estimated to cost about $1.5 billion.