By

• Main Author: James P. Feehan
• Other Authors: The Pennsylvania State University CiteSeerX Archives
• Format: Text
• Language: English
• Published: 2012
• Subjects: Newfoundland; Churchill River
• Online Access: http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.682.606; http://www.cdhowe.org/pdf/ebrief_129.pdf

The Government of Newfoundland and Labrador is assessing whether to authorize the multi-billion dollar Muskrat Falls hydroelectricity project on the lower Churchill River in Labrador. Proponents say it is needed to handle expected increases in electricity consumption. A better first step, however, would be to reform provincial regulations that set artificially low prices for electricity and support excessive power consumption, which is a problem in Newfoundland as it is in other provinces. Changing regulatory regimes so that the price of electricity reflects underlying costs would make economic sense and promote energy conservation. For Newfoundland, such a change could make the expensive Muskrat Falls project unnecessary. On the island of Newfoundland, electricity demand will soon press production capacity to its limits: so says the province’s Crown Corporation for energy, Nalcor Energy. In step with its subsidiary, Newfoundland and Labrador Hydro (NLH), Nalcor favours the first of the following two solutions to this problem:1 1. the Muskrat Falls Plan (MFP): immediately developing this hydro site on the lower Churchill River and bringing its electricity to the island and the Maritime Provinces; or 2. the Isolated Island Option (IIO): adding a mix of new wind, small on-island hydro, and oil-fired electricity generation facilities to existing capacity as needed.