Furey 'cautiously optimistic' about Muskrat Falls commissioning

There's no questioning Andrew Furey is "cautiously optimistic" about the commissioning of Muskrat Falls and believes passing the Labrador-Island Link tests is a "step in the right direction."

The Newfoundland and Labrador premier used both phrases numerous times while answering questions about the project Tuesday morning — nearly a week after N.L. Hydro said the troubled megaproject had finally crossed the finish line.

"Of course I'm cautiously optimistic," he said. "This is a step in the right direction, certainly, whether it being officially commissioned or not. We're still cautiously optimistic on this project that it is moving forward."

But Furey didn't expand much beyond that.

"We inherited it, we're fixing it, this is a step in the right direction. Will it be the last step? Certainly not, but it is a step in the right direction," Furey said.

N.L. Hydro said Wednesday a series of transmission tests completed earlier this month were successful, meaning the 1,100-kilometre Labrador-Island Link can now safely send about 675 megawatts of electricity from the Muskrat Falls site in central Labrador to eastern Newfoundland.

CEO Jennifer Williams said those test results mean Muskrat Falls is considered commissioned, even though its overhead lines will transport, for the foreseeable future, just 80 per cent of the 824 megawatts produced at the dam. A final round of testing at full power will happen next winter.

In order to officially commission the project, Williams said, all that's left is to formalize a number of documents, including agreements reached with the federal and provincial governments on rate mitigation. Williams said the official commissioning date could be anywhere from a few weeks to a few months from now. 

The Muskrat Falls project has been plagued with problems. It's years late, billions over budget, and has been set back by everything from protests to software problems to broken power lines.

While Hydro believes it has solved the software problems that led to previous malfunctions, including a failed high-power test that left 60,000 customers in the dark last November, a report to the Public Utilities Board files last week showed that since last February, four new incidents regarding hardware had occurred. In one case, part of a generating unit cracked and must be replaced.

Critics of the project have said they're skeptical that the latest tests are sufficient proof the project is reliable.

Asked about those concerns, Furey said, "I'm cautiously optimistic that it's a step in the right direction."

N.L. Hydro hasn't provided an updated cost for the project, estimated at $13.37 billion last June. Each added month of delays represents millions more in interest costs.

The province is still working to finalize its rate mitigation plan, which will keep power bills from suddenly doubling when final commissioning happens, but won't avoid increases completely.

"The money, the reorganization of the deal that we did with the federal government — $5.2 billion, just … to remind people at home — $3 billion of new cash will go to ensure that rates do not double," said Furey. "That's money we could have spent on hospitals, on the health-care crisis, on new schools, on paving roads."

Despite the federal government's restructuring deal and the hundreds of millions of annual subsidies promised from the province, rates for people in Newfoundland are still expected to rise about 10 per cent to 14.7 cents per kilowatt-hour some time next year, after the project is officially sanctioned.

Subsequent yearly increases of about 2.25 per cent are also forecast to pay off Muskrat Falls debt.

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