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‘We’re the Wal-Mart of electric generation’

by Archives January 24, 2007

In 1998, Hydro-Quebec announced a $12 billion Quebec/Newfoundland Churchill Falls mega-hydro project. The proposal called for expanding a 40-year old existing 5,400 megawatt project at Churchill Falls by an additional 1,000 megawatts. In addition, plans were blueprinted to build a 2,200-megawatt generating station at the Gull Island site on the Lower Churchill River.

Thierry Vandal, Hydro-Quebec’s then-vice president of Planning said, “We’re the Wal-Mart of electric generation.” Vandal was referring to Hydro-Quebec’s expectations to deliver electricity in the price range of 2.5 to 3.5 cents a kilowatt-hour U.S., implying it would be the lowest price anywhere. The project ran into opposition from the Labrador Innu and Newfoundland Hydro called a moratorium on development until feasibility studies were carried out. So far, the project isn’t expected to be up and running until 2009.

Does Vandal still wear his blue Wal-Mart vest?

Fast-forward to Montreal Jan. 11, 2007 and you would have seen the now President of Hydro-Quebec Thierry Vandal sitting with Premier Jean Charest and members of the Quebec Cree community, announcing a new $5 billion expansion of the controversial James Bay hydroelectric station. This expansion will divert the fast flowing Rupert River, eventually flooding 600 square kilometers of Cree land. The project is expected to create 20,000 jobs until it’s completed in 2012. It will involve building 173 kilometers of roads, four dams, 72 dykes and two conversion stations.

Premier Charest is calling it Hydro-Quebec’s biggest project of the decade.

It’s big, yet tiny compared to the La Grande River project, the first large-scale project on Cree land, which flooded 15,000 square kilometers in the 1970s. It’s also big for the Cree people, who still remember the devastation that resulted from The environmental and social consequences of such a deal created Cree opposition and stopped Hydro development at James Bay in its tracks, at least until 2002, when the two groups bonded to create the Paix des Braves Quebec-Cree agreement, an agreement that has paved the way for the Rupert project.

One of the interesting things about this project is Hydro-Quebec’s deal with the Cree. As compensation, the Cree will receive $70-million a year for the next 40 years, plus a percentage of Hydro-Quebec’s sales that will result from the development. They will also secure logging rights on lumber hauled out of their territory and first-right claims to minerals discovered during construction.

The arguments against this project, like the Churchill Falls project, have already raised serious questions about its validity. Helios Centre, an energy consultant firm, argues convincingly that Hydro-Quebec has been selling electricity to the U.S. at a loss. The best price Hydro can get for its power in the U.S. is three cents a kilowatt-hour. The combined cost of producing and distributing electricity from the Rupert River averages 5.1 cents a kilowatt-hour.

It certainly isn’t Wal-Mart prices.

Predictably, most environmental groups are against the project. “The Rupert River is going to be destroyed by both the Canadian and Quebec governments for purely electoral reasons – this environmental tragedy is unacceptable,” said Anne-Marie Saint-Cerny of The Rivers Foundation reacting to the announcement.

Also at issue is the recommendation of the federal environment impact assessment (EIA) that Hydro-Quebec monitor and adapt to any environmental impacts associated with the project. But according to Daniel Green, Quebec campaigner for the Sierra Club of Canada, this is a major conflict of interest because under EIA Hydro-Quebec is given a free hand to monitor the impacts of its own project.

“There needs to be independent monitoring of the Rupert project,” said Green. “We just don’t believe Hydro-Quebec will modify the project if the impacts become too severe.”

The Sierra Club also maintains Quebec does not need the energy from the Rupert project for its own consumption. The group claims the Rupert diversion is part of Quebec’s energy policy to dam large rivers in order to produce hydroelectricity to generate profits through exports to New England states and Ontario.

But Hydro-Quebec officials say to meet Quebec’s long-term energy needs the Rupert diversion project and other project proposals in the James Bay area have to move soon. If we wait too long, warns Hydro-Quebec our energy needs will fall short, leading to a rise in electricity rates, or rely on other provinces for our energy needs.

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