Newfoundland and Labrador Hydro’s President and CEO, Jennifer Williams, emphasized that the recent memorandum of understanding concerning Churchill River power does not pave the way for contracts resembling the controversial 1969 power purchase deal signed by Churchill Falls (Labrador) Corporation (CFLCo). Williams expressed her confidence in the current agreement during an interview with CBC’s Carolyn Stokes.
The long-standing 1969 contract, which is still active, locked in low power rates for Hydro-Québec as the buyer for several decades, offering minimal benefits to CFLCo when electricity market prices surged. In contrast, the newly announced three-way MOU between the province’s utilities and the jointly-owned CFLCo, revealed on August 17, outlines the framework for a potential new sales contract, along with significant capital projects and power sales linked to the river.
Prime Minister Mark Carney, along with then-Quebec Premier Christine Fréchette and N.L. Premier Tony Wakeham, celebrated the landmark agreement on the St. John’s waterfront. Carney described the text as a groundbreaking green energy initiative in North American history.
In response to public discussions, Williams clarified that the electricity generated at the Churchill Falls power plant will not be sold at a fixed rate, despite occasional use of the term in public discourse. She highlighted that the proposed 50-year sales contract for Churchill Falls power involves a substantial price increase compared to the 1969 agreement.
Under the new arrangement, Newfoundland and Labrador will sell a maximum amount of power to Quebec at a premium rate, with Hydro-Québec charged 11.5 cents per kilowatt-hour until 2041. The price will escalate by an average of 14% annually until 2041 and then increase gradually based on the Consumer Price Index.
Williams emphasized that without a new agreement, Hydro-Québec would continue to pay a mere 0.2 cents per kilowatt-hour until 2041 under the existing contract. The revised terms reflect Hydro-Québec’s willingness to terminate the current contract ahead of schedule.
The MOU also sets the stage for potential contracts covering additional power generation at Gull Island and a new transmission line in Labrador, while making commitments to investigate further energy developments. The agreement aims to enhance Newfoundland and Labrador’s energy policy and expand its power sales options beyond Quebec.