Are you a Premier of a Businessman?
You see Danny comes from the private sector - that's not a bad thing - unless you forget you've entered the public sector.
For instance - if Danny were running a private energy company and he could develop the Lower Churchill - Danny would be interested in selling the power at the highest price - period.
He would be maximizing the value to the shareholders.
Take this example:
Danny Hydro Inc. develops and generates 2800 MW's of power
Company A says I'll pay you 5 cents a kwh for the generation if you deliver it to Ontario.
Company B says I'll pay you 3 cents a kwh for the generation and we will use it in Labrador.
Danny Power Inc. would not be interested in discounting cost - essentially losing out on another 2 cents a kwh.
Now take this same example and view it from the government's perspective:
Newfoundland and Labrador Hydro develops and generates 2800 MW's of power
Company A says I'll pay you 5 cents a kwh for the generation if you deliver it to Ontario.
Company B says I'll pay you 3 cents a kwh for the generation and we will use it in Labrador.
Newfoundland and Labrador Hydro as a Crown Corporation and the Government of Newfoundland and Labrador would be interested in Company B - because whatever they lose on the price of power - they pick up and better by value adding with a smelter. This means more Employment - Corporate Tax - Personal Income Tax - and the establishment of other service businesses.
We need the Premier to invest for our people - for Labrador - not for the best price he can get by exporting the power. That's exactly what the governments of Ontario - and Quebec are thinking - that's why they need the power. We are the shareholders here Danny and we want you to maximize our benefits.
After the dams are built and the project completed from a construction perspective - how many jobs will we create to "export power"?
13 comments:
If the power cost 4 cents to produce, you'd be losing money.
Smart!
You'll note this is an example.
And double check your numbers...but you know that.
The point is clear - deal with the point.
by the way if you had read it - it says sale price not price of production...
It is an example. A made-up example.
If you sold half the power at market rates and kept half in the province for development selling it at current commercial rates in the province or even as an incentive, you'd make even more money.
Let's try some real numbers, what would you have the sell the power at in this province to just get back the costs of a $9 billion construction project?
How many industries would you have to get to set up work here just to pay your bills?
carry on...I'm interested...
Well, rather than be interested perhaps you'd share your own explanation of it. That's the point of my questions
You claim you have done the research. You are the one out there saying the thing should be built only for this province.
Show us how you plan to pay for it.
It seems almost too obvious to say over and over and over (yet again) that the real value of Gull Island/Muskrat Falls power (or any power) is not in where you produce it but where you USE it. Seems almost too obvious to have to keep saying. It probably ties in with a couple of other comments I've made on your blog... this Premier, as all of his predecessors can only see to remove resources from Labrador to the southward, or failing that remove them in the most expedient manner, and remove the cash derived from them to St. John's. Maybe the big difference is that this Premier said (for everything that it is worth) that it is time Labradorians stopped seeing themselves as someone else's treasure trove... and all that other bs...
So, the power can light up X number of homes and power Y industrial jobs elsewhere. It could do the same here except many of them would be new homes, new municipal taxes, new infrastructure of all sorts, new jobs (you can't claw back a job, said Williams, but no doubt you can export the potential). Labradorians have seen and have said all this for many many years and in relation to so many possibilities. Sad.
To anonymous - please share your wisdom - all you have to do with mine is read the 900 posts and find the ones associated with hydropower.
The problem here is you want me to provide more information than the entire government has provided you.
To make my job easier - provide me with your level of knowledge on the kwh price would be - also the breakdown of what you see as the amortization of the project. From there we can have the debate.
The DFO has a greater budget than I do. The math is yours...
Maybe the big difference is that this Premier said (for everything that it is worth)
Not much, if you received a copy of the 2003 "Metis" letter from the big fat liar.
Yes, WJM, 'the letter' delivered by hand to a certain troublesome campaign office by a prominent pc campaign worker. And not, not worth the paper on which it was written. The trustworthiness (ahem) underlined only a couple months later by a broken 'solemn promise' to abide by the findings of the MUN public policy group studying ferry services. Another complete about face.
to the individual who attempts to question my numbers unless I present a mathematical case - in other words present material the government of Newfoundland and Labrador will not do. Made the statement that a 4 cents cost would not make money.
How about this.
Rather than I repeat the work of so many others and the industry norms - here is a living example.
The Rupert River Project in Quebec which will produce 900 MW's to the HQ system at a cost of 5 billion dollars will produce power at 5 cents a kwh.
Now if anonymous can extrapolate the numbers - Lower Churchill 2800 MW's 10 billion dollars - 2 times factor of the Rupert in cost and production.
This is expected to be a very successful project with a reasonable return for HQ and reasonable price for the consumer.
When I used the 4 cents - it did not represent a loss of money but rather a realistic example of our options.
If you would have simply done an industry comparison you could have determined this yourself - and considering your special interest in this issue - I can't understand why you did not.
Sorry - obviously a math error - I meant the production would be three times as much and the cost would be at x 2...
You can determine that 4 cents is not realistic it is probably high...
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