Lower Churchill deal ruinous: Grimes

Newfoundland and Labrador's last Liberal premier is attacking the new Lower Churchill deal, saying it will mean higher hydro rates for consumers and set the province back because it angers Quebec.

Grimes, who had brokered an ill-fated deal with Quebec before Danny Williams and his Progressive Conservatives won power in 2003, said it makes no sense to insult Quebec by asking the federal government for partial financial backingfor the deal.

"Now when anybody stands up and says it's a great Canadian thing not to deal with Quebec, I don't call that nation building," Grimes told CBC News.

"I don't think the people in Ottawa see that as nation building. That's a province which has had a chip on its shoulder for a long time and we're going to pay a price."

Grimes also said the Lower Churchill deal will mean that ratepayers will pay more as power from the 824-megawatt Muskrat Falls plant comes online.

Newfoundland and Labrador's crown-owned Nalcor is partnering with Halifax-based Emera Inc. to pay for a complex network that will transfer power from Labrador to Newfoundland and then to Nova Scotia, with the last transfer through subsea cables. In return for building that component, Emera is guaranteed 20 per cent of the Muskrat Falls output for 35 years.

Grimes said that decision willhit consumers in the pocketbook.

'We're going to pay the higher rates forever, we will be green, and there might be an apple under your tree for Christmas.' Roger Grimes

"Newfoundlanders and Labradorians will pay," he said. "What we always believed was going to be a windfall for us [will instead mean] Emera gets the lion's share, and we get guaranteed higher rates ... We're going to pay the higher rates forever, we will be green, and there might be an apple under your tree for Christmas."

Nalcor freely admits that rates for consumers will initially rise once Muskrat Falls power displaces the energy generated at theoil-burning plant in Holyrood. However, Nalcor CEO Ed Martin said Holyrood needs to be replaced within a few years, and all of the replacements would be more costly.

As well, both Nalcor and Emera released projections that show that costs to consumers will remain stable for decades.Grimes also attacked Williams for letting the much larger Gull Island component of the Lower Churchill project remain idle.

"It's on a great wish list for 30, 35 years down the road," Grimes said.