Power Projects
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Partial diversion of Romaine River and increased utilization of the
11 existing generators at Upper Churchill.
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Gull Island - new generating station (2,264 MW).
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Transmission lines - two 735 kv lines - Gull Island to Churchill
Falls and Gull Island to Québec.
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Muskrat Falls - feasibility study completed. Not economically
feasible at this time.
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Infeed to Island - subject to negotiations with federal government.
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Estimated cost between $7 and $10 billion.
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Sign inter-utility Memorandum of
Understanding.
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Award environment and engineering contracts
worth about $30 million.
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Complete Environmental Assessment Memorandum
of Understanding.
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Appointment of Environmental Assessment Panel.
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Establishment of joint project office in the
Province.
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Conclusion of Impact Benefits Agreements
negotiations with Innu groups.
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CHURCHILL RIVER POWER
Newfoundland and Labrador Hydro and Hydro-Québec have made significant
progress on major issues and are finalizing legal and technical agreements
with respect to completing a Memorandum of Understanding on developing the
Lower Churchill. Progress in 1998 and 1999 includes the following:
Recall/GWAC
In December 1998, the utilities signed a three-year agreement worth
almost $80 million, which allowed the Province to recall 130 MW of power
from the Upper Churchill and re-sell it to Hydro-Québec at current market
prices. To date, the Province has received about $68 million in additional
revenues. In addition, the Guaranteed Winter Availability Contract (GWAC)
was ratified by both utilities in June 1999. The GWAC increases Newfoundland’s
take on the 1969 power contract by ensuring maximum capacity is available
for sale to Hydro-Québec during winter months: it will provide over $1
billion to the Province between 1998 and 2041.
Project Optimization
The original development plan, announced in March 1998, proposed to
partially divert two Québec rivers (Romaine and St. Jean) into Labrador and
to install additional generating capacity on the Upper Churchill River. In
June 1999, following detailed engineering studies, the utilities agreed to
partially divert only the Romaine River into the Smallwood Reservoir and to
increase the utilization rate of the 11 generators at the existing Upper
Churchill facility, rather than construct a new generating plant. Almost the
same amount of energy can be produced at a significantly reduced cost, which
means increased profits, with fewer environmental effects.
Economic Benefits
Power Purchase Agreements will be based on market prices with a price
floor for energy sold to the U.S. and Canadian markets (outside Québec).
This will ensure that, no matter how low prices go, the project will have
sufficient revenues to cover debt incurred during construction. A
progressive royalty regime and project management agreements are also being
negotiated. Benefits for Newfoundland and Labrador will be maximized. The
head office for the project will be based in Newfoundland and Labrador, and
engineering and procurement will also be based out of this province.
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