Premier Furey Provides Update on Rate Mitigation Discussions

  • Executive Council

September 25, 2020

The Honourable Andrew Furey, Premier of Newfoundland and Labrador, today provided details on rate mitigation discussions and released the related Terms of Reference.

The Rate Mitigation Team has a mandate to successfully conclude negotiations with the Government of Canada to support the mutual goals of:

  • Providing fiscal flexibility to Newfoundland and Labrador that will allow the Province to focus on broader economic and social objectives unrelated to the Muskrat Falls Project; and
  • Supporting the Atlantic Growth Strategy through the provision of clean, affordable, and stable energy across Atlantic Canada.

The Rate Mitigation Team is being led on a volunteer basis by Brendan Paddick, who is taking a leave of absence from his role as Chair of Nalcor Energy, a position he has held since December 2016. A bio for Mr. Paddick can be found in the backgrounder below along with the Terms of Reference.

Mr. Paddick is responsible for identifying the other members of the Team which will also be supported by a subcommittee of senior government officials.

Quote

“The Rate Mitigation Team has an important job to do. As the project nears completion and eventually comes on line, we must ensure that our federal partners cooperate with us to ensure that electricity rates are mitigated while also supporting the goals of the Atlantic Growth Strategy. I thank Mr. Paddick for taking on the important job of team lead as his considerable experience will be vital as we carry out these crucial negotiations.”
Honourable Andrew Furey
Premier of Newfoundland and Labrador

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Media contact
Meghan McCabe
Office of the Premier
709-729-3960
meghanmccabe@gov.nl.ca

BACKGROUNDER

Biography for Brendan Paddick and Terms of Reference for the Rate Mitigation Team

Brendan Paddick
Brendan Paddick is a renowned CEO and corporate director. He is the founder and former chief executive officer of Columbus International Inc., a diversified telecommunications company. In 2015, Columbus merged with Cable & Wireless Communications PLC in a transaction that valued Columbus at over CDN$4.4 billion. In 2016, Liberty Global PLC acquired Cable & Wireless-Columbus for an enterprise value of approximately CDN$11.1 billion.

Mr. Paddick holds a Bachelor of Commerce and a Master of Business Administration from Memorial University of Newfoundland and graduated from the Advanced Management Program at Harvard University. He holds an ICD.D designation from the Institute of Corporate Directors at the Rotman School of Management at the University of Toronto. Mr. Paddick has extensive capital markets, mergers & acquisitions and governance experience, having held senior executive and director positions with numerous large private companies, as well as public companies listed on the Toronto Stock Exchange (TSX), London Stock Exchange (FTSE), Nasdaq and the Bahamas Stock Exchange (BISX). He was recognized as one of Canada’s Top 40 under 40 in 2000. He has been named one of Atlantic Canada’s Top 50 CEO’s by Atlantic Canadian Business Magazine on the maximum five occasions and as such, has been inducted into the Top 50 CEO Hall of Fame. Brendan was Memorial University’s Faculty of Business Alumnus of the Year for 2002. He was named Ernst & Young’s Atlantic Canadian Business-to-Business Entrepreneur of the Year in 2011 and was honoured as Memorial University’s Alumnus of the Year in 2013. In May 2018, he was inducted into the Junior Achievement Newfoundland and Labrador Business Hall of Fame. In October 2019, Brendan was awarded EY Canada’s Special Citation Award for Master Entrepreneur for his career body of work.

 

Terms of Reference for the Rate Mitigation Team

Mission:
To negotiate an agreement with the Government of Canada as it relates to the Muskrat Falls Project that achieves the goals and objectives outlined below.

Mandate:
To successfully conclude negotiations with the Government of Canada to support the mutual goals of:

  • providing fiscal flexibility to Newfoundland and Labrador that will allow the Province to focus on broader economic and social objectives unrelated to the Muskrat Falls Project; and
  • supporting the Atlantic Growth Strategy through the provision of clean, affordable, and stable energy across Atlantic Canada.

The mandate does not include the Upper Churchill Hydro Project.

Objectives:

  • Successfully complete construction of the Muskrat Falls Project.
  • The Government of Newfoundland and Labrador can access electricity from the Project to meet the electricity needs of the Province in an affordable and sustainable manner.
  • Achieve electricity rate mitigation for ratepayers of Newfoundland and Labrador.
  • Minimize ongoing liabilities of the Muskrat Falls Project to ratepayers and taxpayers of Newfoundland and Labrador.
  • Maximize return on investment made by Nalcor and the Province in the Muskrat Falls Project.
  • Support the Atlantic Growth Strategy.
  • Contemplate opportunities for Gull Island, the Atlantic Loop or other network interconnection projects across Atlantic Canada. Churchill Falls is beyond this mandate.

Structure:

  • A Rate Mitigation Team (the “Rate Mitigation Team”) will be created to undertake the negotiations with Canada.  The Rate Mitigation Team will be led by Brendan Paddick, (the “Team Lead”), who will take a leave of absence from his role as Chair of Nalcor Energy to complete the negotiation with the Government of Canada.
  • The Team Lead will be supported by a team of: (i) seconded officials from within the Government of Newfoundland and Labrador, with experience in finance, legal advice, electricity, and intergovernmental relations, (ii) seconded resources from Nalcor knowledgeable about the financial structure of the Muskrat Falls Project, and (iii) such other government officials or Nalcor resources as the Team Lead reasonably requests as necessary to fulfil the Mandate and Objectives.
  • The Rate Mitigation Team will be assembled by the Team Lead in consultation with the Support Subcommittee.

Subcommittee:

  • A subcommittee of senior government officials (the “Support Subcommittee”) will be created to support the Rate Mitigation Team as required. The Support Subcommittee will include the Clerk of the Executive Council, the Deputy Clerk, the Deputy Minister of Finance, the Deputy Minister of Industry, Energy and Technology, and the Deputy Minister of Intergovernmental Affairs.
  • The Team Lead will act as the liaison between the Rate Mitigation Team and the Support Subcommittee.
  • The Team Lead will keep the Support Committee generally informed on the negotiations with Canada.

Government Approval:

  • The Rate Mitigation Team, supported by the Support Subcommittee, will recommend negotiated terms achieving the Mission, the Mandate and the Objectives to the Government.

Budget:

  • The Team Lead will serve without receiving compensation, except for out-of-pocket expenses.
  • It is anticipated that limited travel may be required to finalize any agreement. In those cases funding will be provided. Preference is given to virtual meetings wherever possible.
  • Officials seconded to the Rate Mitigation Team from the Government of Newfoundland and Labrador and Nalcor and officials from the Government of Newfoundland and Labrador serving as members of the Support Subcommittee will receive remuneration as per their existing employment terms from their current employer.
  • Resources will be made available to the Rate Mitigation Team to ensure that external financial, legal, or engineering advice can be provided in a timely manner to support the successful conclusion of the negotiation for Newfoundland and Labrador. The Team Lead will select and retain these resources.
2020 09 25 1:45 pm