The Official Opposition is raising serious concerns that Premier Tony Wakeham has abandoned market-based pricing for Churchill Falls power, leaving Newfoundland and Labrador to repeat the mistakes of the disastrous 1969 agreement.
The negotiating team today admitted that “Quebec was positioning for a simpler approach, no question about that” – and they got it. As a result, Newfoundland and Labrador lost market-based pricing, meaning our province will sell power to Quebec at predetermined prices, and Quebec can sell it for more as electricity markets grow, with no benefit to us.
Under the 2024 MOU, the price for all the power sold from Churchill Falls was designed to reflect multiple measures of value, including wholesale electricity prices in Quebec, replacement costs in Quebec and wholesale electricity market prices in northeastern export markets. The agreement also included a requirement that the pricing mechanisms remain fair over the life of the agreement.
Wakeham’s Conservative Government has now given up those protections. Under the 2026 agreement, Churchill Falls power will instead be sold according to fixed target payments. Possible adjustments are only related to a restricted Consumer Price Index that may never kick in, even if inflation rises. The price is not directly linked to electricity or energy market prices, meaning Newfoundland and Labrador will not benefit if the value of electricity rises significantly over the 50-year term.
Jennifer Williams, CEO of Newfoundland and Labrador Hydro, previously described the market-based approach as a fundamental lesson from 1969. She said the 2024 model would allow the province to benefit if energy markets or replacement costs increased, rather than being limited to one indicator. The difference is significant.
In the January 2025 debate, Jennifer Williams said “when we think about a 51-year term, we have de-risked picking the wrong choice here now and we will have this ability to get the best of all of these or if something doesn’t work out well, we wouldn’t have hitched our wagon to the wrong metric.”
Now we have hitched our wagon to one metric, that very well could be the wrong one.
Under the 1969 contract, Churchill Falls power was sold at fixed prices that ultimately declined. While electricity prices increased dramatically, Quebec was able to profit from reselling Newfoundland and Labrador’s power at substantially higher prices.
“Newfoundlanders and Labradorians were told this time would be different. They were told the lessons of 1969 had been learned. But when it mattered, Tony Wakeham took away their promise of a say in the final deal. He gave up market-based pricing, gave up replacement-cost protection, and gave up the fairness guarantee. That is not learning the lessons of 1969. That is repeating them,” says Hogan.
The Official Opposition will continue pressing the government for answers throughout this week.
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