N.L., Emera reach Lower Churchill hydro deal

Newfoundland and Labrador has finalized a deal to develop the Lower Churchill hydroelectric project with Emera Energy of Nova Scotia, CBC News has learned.

Details are expected to be announced at a news conference in St. John's on Thursday.

Nalcor, Newfoundland and Labrador's Crown-owned energy corporation, has been in discussion with Emera and the Maritime provinces about a plan to funnel hydroelectric power from the Churchill River in Labrador through Newfoundland and then into Nova Scotia.

Premier Danny Williams is expected to disclose details of the deal on Thursday in St. John's, CBC has been told, and is scheduled to be joined by Nova Scotia Premier Darrell Dexter.

Asked to respond by CBC News, Williams's office said it had no comment.

Later, however, the government announced that a technical briefing on an unnamed topic would be held Thursday morning at the Sheraton Hotel in downtown St. John's, to be followed by a "special announcement" involving Williams.

The deal involves developing about 800 megawatts of power at Muskrat Falls, one of two long-proposed sites in the Lower Churchill project. A much larger site, at Gull Island, is being shelved for now.

Nalcor believes a smaller approach is still viable because there is an immediately available market.

In Newfoundland and Labrador, the project would provide energy to mothball the Holyrood generating station, which burns bunker fuel for power. In Nova Scotia, the power could be used to replace the use of coal.

However, power could also be exported to New Brunswick and possibly to the United States.

Williams and Nalcor have focused on a Maritime route for moving Labrador power after failing towinfavour at least on terms thatNewfoundland and Labradorwill accept with Quebec.

Williams said earlier this year that Quebec "shafted"attemptstotransfer Lower Churchill power across Quebec and into markets in Ontario and the U.S.

The federal government has been asked for $375 million in support for an underwater hydro link to Nova Scotia through an existing infrastructure program.

Prime Minister Stephen Harper has said the proposal, which drew criticism from the government of Quebec, will be judged on its merits.