HALIFAX – The CEO of Nova Scotia utility company Emera is dismissing reports from Newfoundland and Labrador that the $7.7-billion Muskrat Falls hydroelectric project is already over budget and could be delayed.
Chris Huskilson said Wednesday that even if the reports turn out to be true, he’s convinced there will be no repercussions for ratepayers in Nova Scotia, who will be paying for a $1.5-billion subsea cable — known as the Maritime Link — that will be used to import electricity from the dam under construction in central Labrador.
“I don’t think it’s clear that the project is either over budget or late,” Huskilson told a news conference in Halifax.
“But if there is any kind of a situation around the cost of the project or the timing, all of that is well contemplated in the agreements (with Newfoundland and Labrador’s Nalcor Energy). Nova Scotia will get the 35 years of energy that it requires. Nova Scotia will not be short-changed.”
Earlier this month, the CEO of Crown-owned Nalcor said costs for Muskrat Falls were going up and the goal of providing first power sometime in 2017 is in question and may be delayed.
Ed Martin said rising labour costs were largely to blame, but he would not confirm a new price tag while major contracts were still being negotiated.
Nova Scotia Energy Minister Andrew Younger has said he’s not worried because under the project agreement, a delay requires Nalcor to deliver its promised allotment of energy by some other means or reimburse Nova Scotia Power for the cost.
“Nobody is saying it’s late,” Younger said Wednesday after Huskilson announced Emera had secured financing for the Maritime Link project.
“At the end of the day … Nova Scotia ratepayers do not lose out, regardless of whether Muskrat Falls is delayed or over budget.”
Huskilson agreed, saying the completion of the Maritime Link will give Nova Scotia access to a larger energy market — something it doesn’t have now — even if Muskrat Falls isn’t up and running.
“We will get the energy that we bargained for,” he said. “And with the Maritime Link in service, we’ll be able to access markets that we couldn’t access before. There’s energy in the marketplace and that energy will be available.”
As for the Maritime Link, Huskilson said the project continues to be on time and on budget with plans in place to bring it online in late 2017.
Earlier, Huskilson announced that Emera (TSX:EMA) had secured $1.3 billion in financing on the bond market. He said the deal was made possible by a federal loan guarantee — approved last month — that offered Emera a triple-A credit rating.
The guarantee will help reduce Emera’s financing costs by $325 million over the life of the Maritime Link project, he said, adding that the money will be paid back over 38 years at a rate of 3.8 per cent — slightly lower than the 4 per cent anticipated in the project’s business plan.
Construction has already started on the project, which will include a 170-kilometre subsea cable that links Cape Breton with southwestern Newfoundland.
Emera estimates that the construction of the Maritime Link will create an average of 300 jobs per year during the construction period in both provinces, with peak activity in 2016.