Aide-mémoire

A little refresher for Steve Kent, from the marathon House of Assembly sitting of December 18-19, 2012. Here are the 5000 or so words he spoke to Bill 61; emphasis added:

December 18, 2012 HOUSE OF ASSEMBLY PROCEEDINGS Vol. XLVII No. 71

MR. KENT: Thank you, Mr. Chair.

I just need to make a few comments in speaking to Bill 61 now that we are in Committee. I think it is an appropriate time to remind members about Bill 61.

We have dealt with Bill 53; it has been passed through third reading. We still have Bill 60 and Bill 61 to deal with. Right now we are in Committee of the Whole discussing Bill 61, An Act to Amend the Electrical Power Control Act, 1994, the Energy Corporation Act and The Hydro Corporation Act, 2007.

I am really pleased, Mr. Chair, in the last half an hour or so that we have gotten back to where the focus of this debate needs to be. We are here in this House for an important process. These are vital pieces of legislation. We have sanctioned a project that is truly a game changer for Newfoundland and Labrador that is going to allow us to reach our goal of becoming the energy warehouse that we know we can be, Mr. Chair.

For that reason, it is important to get on with it. We are here because we want to answer whatever questions need to be answered, particularly on these specific pieces of legislation that we are actually here to talk about. I hope that the focus for the rest of our time, however long that is – and it has been quite a journey so far. I hope that our focus will truly be on the legislation in question.

Let's get on with this. We have sanctioned the project. There is no turning back. We have made the bold decision. We have been elected to make bold decisions. We have been elected to provide leadership and that is exactly what we intend to continue to do, Mr. Chair.

In terms of the comments from the Leader of the New Democratic Party, I would like to make a few remarks on what she just said. In response, I hear the Leader of the Third Party suggest that we need to slow down because we have not looked at the alternatives, because we need to look at other technologies, et cetera.

I take the point, but I take grave exception to the point, Mr. Chair. The folks at Nalcor, the world-class expertise that we have engaged, the folks within the Department of Natural Resources, they are on top of technology all the time, Mr. Chair.

For years, people have been trying to develop tidal power. In fact, I would hope that the Leader of the New Democratic Party is aware that we have our own wind-hydrogen project, Mr. Chair. In Ramea, we have a project that is all about new technology. That is just one example. We have explored all the possible alternatives. We have spent millions of dollars doing research on all of the alternatives and we are embracing new technology wherever possible.

Wind-hydrogen –

SOME HON. MEMBERS: Oh, oh!

MR. KENT: Mr. Chair, I know I am being heckled and yelled at by the Member for Signal Hill – Quidi Vidi and unfortunately the Member for St. John's East, who has been rather well behaved for the most part during this debate. His language has certainly been appropriate.

The wind-hydrogen project in Ramea is new technology and the magic of that, Mr. Chair, is that it has the potential to connect communities that would otherwise be isolated.

The folks at Nalcor, the folks at the Department of Natural Resources, the expertise that we have engaged to implement the Energy Plan that is going to set a bold, new future for Newfoundland and Labrador, they are focused on new technology. Do not believe for a second that they are not, Mr. Chair.

We are spending millions of dollars every year on research and design, Mr. Chair, but the Leader of the Third Party would have you believe that we are not interesting in new technology, that Nalcor is not interested in new technology. I assure you, Mr. Chair, nothing could be further from reality.

In fact, I have been in this House now for five years and I have witnessed Ministerial Statements on new technology when it comes to meeting the energy needs of this Province. I have seen educational videos developed by Nalcor, developed by the Department of Natural Resources, to inform the public and to inform decision makers about the potential that exists for new energy. We have consulted with world-class expertise to guide our decisions when it comes to meeting our future energy needs. People like Wood Mackenzie and Ziff Energy; these are the types of people who have informed the process. It has been a long process. It has been a process that is involved an incredible amount of public debate.

I ask the Leader of the New Democratic Party to tell this hon. House what technologies she is talking about. What is it she wants us to study more? What is it she wants to look at that we have not looked at to date? Mr. Chair, it takes years to develop and to plan for and to build a hydroelectric development. These things do not just happen overnight.

We are all convinced on this side of the House – now I realize that the host of VOCM Open Line and a few of the folks opposite may not be convinced that we need power in the future, Mr. Chair, but the folks on this side of the House, based on all of the information available to us, are quite convinced that as soon as early as 2017, if not sooner, we need power to meet our energy needs in this Province.

If that is the case, we cannot wait until 2015 to decide hey, maybe let's build some generation facilities. These things take years to plan for. If we want to put hydroelectric generation infrastructure in place, we cannot wait any longer. We need more power by 2017, and countless studies have been prepared. We have invested millions of dollars to ensure that we do all the necessary due diligence to make sure that we make the right decisions and responsible decisions that are going to impact our future.

Systemic change, Mr. Chair, takes an incredible amount of time. That is what we are talking about here. We have consulted with the best expertise available to us, yet the Leader of the New Democratic Party has the nerve to stand in this House tonight, Mr. Chair, during this debate and suggest that there is still not enough information available.

I have sat in this House, Mr. Chair, and watched the Minister of Natural Resources table fifteen or twenty boxes of information on this project, one after another, and I am not sure that she has taken the time to read any of that information based on some of the comments I am hearing here over the course of the last number of days.

AN HON. MEMBER: Eddie read it.

MR. KENT: I do not doubt the Member for Bay of Islands read it.

I know that our Natural Resources Minister, since we have been engaged in this debate on this bill and Bill 61 as well, has tabled a number of reports once again, Mr. Chair, seventeen reports just last night; last night being Tuesday, today being Tuesday, and tomorrow being Tuesday. The information continues to flow, but the information is not a whole lot of good and there is no point continuing to provide information if the hon. member opposite is not going to read it. Mr. Chair, there is lots of information available.

We know we have made the big, bold decision to chart a new course for the future of Newfoundland and Labrador. It is the right decision. There is an endless amount of research available. For that reason, there is no need whatsoever to continue to delay from the real issues we need to be talking about.

I do not know if anybody opposite missed this, but we have sanctioned the project. We have two important pieces of legislation that are necessary to pass. Let us talk about the specifics. Let us hear your concerns. If you have legitimate questions that need to be answered, I can assure you the Premier, who is sitting here with us and the Minister of Natural Resources who is sitting here with us, are quite prepared to answer your questions as are other members of this hon. House. We are not prepared to stall and play the kind of political games we are witnessing here, Mr. Chair.

I have heard the Leader of the Third Party continue to say we control the process. Mr. Chair, we have a compelling mandate from the people of Newfoundland and Labrador to lead, and that is what our Premier is doing, that is what our Minister of Natural Resources is doing, that is what this government is doing, and that is what we are going to continue to do.

I support Bill 61. We are in Committee. We had an informed debate during second reading. Let us talk about the specifics of the clauses and then let us get on with this because that is what we are here to do. That is what we were elected to do, Mr. Chair.

Thank you.

…

CHAIR: Order, please!

The hon. the Member for Mount Pearl North.

SOME HON. MEMBERS: Hear, hear!

MR. KENT: Thank you, Mr. Chair.

Mr. Chair, I am so tired I can hardly hear myself speak, let alone think. Nonetheless, I am getting increasingly frustrated by a debate that is supposed to be about Bill 61. I thought it was time to get up once again and remind particularly the Member for St. John's Centre and the Member for The Straits – White Bay North what we are actually here in this House to do.

What we are debating is financing legislation for Muskrat Falls, Bill 61. I have heard a lot in the last forty-eight hours or so about the Member for The Straits – White Bay North and his adventures in Iceland – Iceland. It is a wonderful country.

There is a bright light in my face, Mr. Chair.

It is a wonderful country. I do not dispute that for a second. I am glad the hon. member has enjoyed his time in Iceland. He talks about some of the geothermal energy opportunities and the geothermal energy in the great country of Iceland. That is fascinating stuff. It really is.

There are flashes going off, Mr. Chair. I think it is unparliamentary, actually.

I love Canada. I have travelled in Canada. I have not been to Iceland. I hope to get there some day. In certain places in Canada there are hot springs. Have any of you been to Banff?

SOME HON. MEMBERS: Hear, hear!

MR. KENT: Hot springs are wonderful. In Iceland, there are about 600 hot springs, Mr. Chair, which makes the whole geothermal thing work a little bit better than it would work, say, in St. Anthony.

SOME HON. MEMBERS: Hear, hear!

MR. KENT: No, I am being serious. I would like the hon. member to just explain to us when he gets up, which I am sure he is going to do in about seven minutes, maybe sooner, to tell us a little bit more about his energy plan that involves wood pellets and Icelandic hot springs.

Then on multiple occasions tonight and this morning – it is now morning, I guess.

AN HON. MEMBER: It is still Tuesday.

MR. KENT: It is still Tuesday, though. That is a good point. That is probably the first thing we can actually agree on here this evening.

Over and over again the Member for St. John's Centre has gotten up and quoted Doc McStuffins. That is great, but we are here to talk about Bill 61.

Bill 61 is about making legislative amendments to the Energy Corporation Act, the Hydro Corporation Act, and the Electrical Power Control Act. That is going to help us advance implementation of the Muskrat Falls Project. While we want to talk about why these changes are necessary and achieving the most desirable financial arrangement possible for the project, the only thing that we are hearing from the New Democratic Party is about trips to Iceland and Doc McStuffins.

Mr. Chair, we really do have a lot of work to do and I hope that we can start talking about the actual bill. These folks are not interested in progress. They are not interested in actually talking about the legislation that is before us. It is really telling. While they want to stand in the way of progress, I just think that we have to get on with this important piece of legislation.

This opportunity before us, Mr. Chair, represents a major paradigm shift in our direction as a Province and a major paradigm shift in terms of our place in this country. We want to manage the development of resources. We want to manage the development of clean energy and green energy. We want to manage the flow of legislation in this House in a responsible way, but the folks opposite, these two in particular, want to talk about Icelandic hot springs and Doc McStuffins.

There are far more pressing issues for us to talk about. We want to manage development of resources. We want to manage the development of clean, green energy and they want to manage decline. They certainly do not want to talk about the legislation that we are here to debate.
Filibustering is wonderful, it is fine. We can do it until the cows come home; however, we should at least talk about the legislation that is before us.

We want to have an open, informed debate. In fact, interestingly enough, the debate on Muskrat Falls has been going on four months in this Province. In fact, the project has now actually been sanctioned, as the hon. member next to me points out.

It is time to get on with this. If you are going to talk about alternatives, talk about legitimate, viable alternatives that make economic sense. We have not seen that yet during this debate.

AN HON. MEMBER: (Inaudible).

MR. KENT: Now I am hearing reference to mummers from the New Democratic Party. Beyond the nonsense we are hearing tonight, they have not been able to tell us how the project is flawed. They have not been able to even explain why Bill 61 is flawed, Mr. Chair.

In an effort to further cause confusion and disruption in this important legislative process, every now and then when he is not talking about his trips to Iceland and the hot springs, he will say Stephen Harper's loan guarantee. The loan guarantee is going to save this Province $1 billion, Mr. Chair. It is fine for the hon. member to make light of that, but I think it is a positive step forward for this Province. It is going to allow us to develop a renewable energy resource that is going to meet the needs of this Province for decades, in fact for generations to come.

They have failed to provide alternatives. Instead of providing constructive, positive contributions to the debate on Bill 61, we hear them talking about Iceland, Doc McStuffins, and now mummers – now that the Member for St. John's North has joined in. They can talk all they want about threats, control, fear, secrets and Stephen Harper, but people are not buying it, Mr. Chair. People in this House are not buying it and I do not believe the people of the Province are buying it.

Bill 61 is a sound piece of legislation, and we need to do it now. We need to get the legislation in place before Nalcor can approach potential lenders. That needs to happen early in 2013. That is part of the project schedule.

These amendments are actually designed to facilitate the project's financing structure. We need to be able to clearly demonstrate to lenders that the project is going to generate sufficient revenue to cover costs, including debt repayment. Government needs to take the necessary actions to ensure the project's long-term success.

We do need to get on with this. It is time to stop the foolishness. We have lots of clauses that members could debate. They could propose amendments. They could tell us what they like about the legislation and what they do not like. What they would change, how they would improve it. Instead, we hear them over and over again in ten-minute intervals get up and talk about irrelevant matters that have very little if anything to do with the legislation in question.
Perhaps in the next little while we will hear a few more stories about travels to Iceland, dips in the hot springs, perhaps even Doc McStuffins. I hope we will soon talk about Bill 61 and the legislation that we are here to actually debate.

It feels like days ago – several days ago the Member for The Straits – White Bay North was telling us that Muskrat Falls was too small. It could not possibly meet the energy needs of the Province. Tonight, this morning, we are hearing him say it is too big. Now it is too big.

Geothermal energy, with a vast amount of hot springs in this Province, will be the answer. If we have any questions about their nonexistent energy strategy, we can talk to Harvard graduate Doc McStuffins. It is perplexing, Mr. Chair. I hope soon we will get on with this because we have much to do. There are many clauses in both bills that are worthy of discussion in this House. I hope the foolishness will soon stop.

Thank you, Mr. Chair.

…

CHAIR: Order, please!

I recognize the Member for Mount Pearl North.

SOME HON. MEMBERS: Hear, hear!

MR. KENT: Thank you, Mr. Chair.

MR. LANE: What a city.

MR. KENT: It is a great city. Mount Pearl is a great city, Paradise is a great town. It is a real honour to represent both communities here in this House of Assembly.

I am enjoying tonight's debate. The tone has certainly changed in recent hours, and I feel we are getting close to getting some things done with this piece of legislation. Again, I remind hon. members that we are debating Bill 61; we are at the committee stage.

Bill 61 is An Act To Amend The Electrical Power Control Act, 1994, The Energy Corporation Act And The Hydro Corporation Act, 2007.

MR. KIRBY: (Inaudible).

MR. KENT: The Member for St. John's North is suggesting that I have a photographic memory, and I would beg to differ. I do have a good memory. I have a long memory, and I do enjoy photography, Mr. Chair, but certainly I would not be snapping photos in this hon. House.

We have heard some discussion about excluding the PUB, and we have no intention of excluding the Public Utilities Board. In fact, as we make these changes to the acts in question, and as we move towards passing Bill 61, the PUB is going to continue to regulate rates for the Province. The PUB will also assess the utilities, capital, operating, and other costs, Mr. Chair, to determine the utilities, revenue requirements and also the rates, but we have to provide lenders with the required revenue certainty. That is really important to the viability of this project, and that is why these amendments are so necessary.

Muskrat Falls is actually only one input into overall rates, Mr. Chair. So, the PUB still has a valuable role to play. It will continue to fulfill its mandate in terms of setting capital budgets, setting rates for utilities, and the other regulatory roles that the PUB plays today.

We have heard some concern about oversight being removed from the PUB, and that is not exactly what is going on here. This amendment gives us the authority to direct the PUB to accept project costs for inclusion in electricity rates for the Province. Lenders require certainty, Mr. Chair. They require certainty that Newfoundland and Labrador Hydro is going to be able to recover all project costs, including debt repayment. This precludes the ability of the PUB to allow or disallow project costs. The legislative changes we are proposing through Bill 61 actually help us achieve those goals.

Contrary to perhaps the belief of some members opposite and because of the discussion that has occurred, there are probably even some people outside of this House who are thinking there is a move afoot to exclude the PUB, we are not excluding the PUB. This amendment allows us to direct the PUB to include project costs as one of many outputs into rates that are charged to customers. That assurance is important. That is the kind of assurance lenders need.

We have to achieve the most desirable funding arrangement possible for this project. I believe it was the Minister of Municipal Affairs who talked about the fact that this involves non-recourse project financing. That means only the project assets themselves are at risk. Protecting non-project assets has always been a fundamental principle of our approach here in terms of developing this resource.

In terms of PUB exclusion, there are examples of specific project exemptions in the past. In fact, as recently as 2002 there was the Abitibi-Consolidated, Abitibi partner exemption. There were exemptions in 2000 for the Labrador Hydro Project and the Granite Canal. As well, Star Lake in 1998 and Rattle Brook in 1998 were exempted under existing provisions under the Public Utilities Act and the Hydro Corporation Act. There is some precedence, but it is also important to note that none of these projects were as significant or similar in size and scope, or even project cost, as what is happening with Muskrat Falls.

In order for us to achieve the kind of financing structure we are seeking, Mr. Chair, and in order for us to protect non-project assets, project financing needs certainty. It needs certainty that Newfoundland and Labrador Hydro can recover all of the project costs, so we are not excluding the PUB.

I thought it was important to rise once again to speak actually to Bill 61 and the clauses that we are here to debate, and to provide some clarity on that particular issue. I hope, given the amount of time we have spent on clause 1 and considering much of the debate has not even addressed clause 1, that we are going to get to a point really soon – especially given the positive spirit that seems to exist in the House this morning; maybe it is the Christmas spirit that is getting to people.

I am hoping that we can soon start to get into the specifics of this bill and move forward. There is a lot of stake. There is a lot of time and resources being spent here. There are a lot of people involved in conducting this important process.

Again, I urge the members opposite, continue this co-operative spirit that seems to be evolving here and let's get on with it. Let's get into some of these clauses and advance progress of Bill 61.

Thank you, Mr. Chair.

…

CHAIR: Order, please!

I recognize the Member for Mount Pearl North.

SOME HON. MEMBERS: Hear, hear!

MR. KENT: Thank you, Mr. Chair.

Good morning once again. It is certainly a spirited debate. I want to acknowledge the comments made by the Member for Burgeo – La Poile. He makes an interesting point around acknowledging the disagreements that we may have.

During a debate that is as lengthy and as extensive as this one, I think we have to come to a point, Mr. Chair, where we agree to disagree on some issues. We cannot stifle progress, as the member is suggesting. We have to agree to disagree on certain points and move on. Otherwise, we will take the NDP approach and just simply stand still. We cannot do that.

I also want to join the Member for Burgeo – La Poile in acknowledging the special delegation that seems to have gathered in the Speaker's gallery. We have had some spirited discussion as well this morning on the Member for The Straits – White Bay North, his escapades in Austria and Iceland. I think some of his friends from the hot springs have joined us in the gallery, so I acknowledge your presence here.

I am disappointed though that the Member for Burgeo – La Poile would suggest that we are somehow stifling progress. Nothing could be further from the truth. Mr. Chair, when I look at Bill 61 and what we have on the table here, we are talking about legislative amendments that would actually support the advancement of Muskrat Falls and help move the project forward, which is all in the interest of growing the economy in Newfoundland and Labrador and securing our renewable energy future.

I want to address a few more things that he said. The Member for Burgeo – La Poile talked about Newfoundland Power having to buy power from Newfoundland and Labrador Hydro. That is exactly what they do today, Mr. Chair. We are not proposing any change in that regard. Ensuring that Newfoundland Power and industrial customers have to buy their power from Newfoundland and Labrador Hydro is actually going to avoid rate increases. It is going to avoid rate increases that might have occurred if these customers could buy their power from another wholesaler.

Nalcor, since its inception, has been incredibly prudent. They have been incredibly cautious in managing the project and its financing, and this has been proven by a number of external studies. It has been proven by independent studies by Manitoba Hydro International. It has been proven by studies by Navigant, and other consultants as well as we have moved through the decision gate process. We are really confident in Nalcor's record. We are proud of the careful management they have exhibited and we are pretty sure that this kind of success is in fact going to go continue.

In terms of what the Member for Burgeo – La Poile is talking about, we are simply formalizing a status quo arrangement that exists currently. Newfoundland and Labrador Hydro is the wholesale supplier for the majority of the power that is consumed on the Island through sales to industrial customers and through sales to Newfoundland Power. The fact remains, Mr. Chair, that Muskrat Falls is the least-cost option and it meets the long-term generation requirements of the Province.

When you look at the take-or-pay financial obligations that have been referenced during the course of this debate whereby Newfoundland and Labrador Hydro is committed to buy Muskrat Falls energy, sourcing additional power, Mr. Chair, would simply layer additional costs on customers. That is not something that this government supports. It seems to be something that the other parties are suggesting, but government has to ensure that no such additional costs are passed on to customers. That is what we are attempting to achieve and that is what I believe we will achieve through Bill 61. Some members opposite did support our industrial rates policy, which was a good thing.

Given the take-or-pay financial obligations and the requirement for Newfoundland Power to source energy from Newfoundland and Labrador Hydro as it has been doing, if Newfoundland Power sourced additional power it would simply layer additional costs on customers. We cannot do that, Mr. Chair. We do not support that.

Newfoundland Power's current stock of generation projects will be exempt as well, and I think that is important to note. The prohibition that we are talking about only applies to new generation, Mr. Chair. Government is requiring that energy for domestic use is sourced from Newfoundland and Labrador Hydro, as it is today. It does not preclude new power generation for export. It does not preclude self-generation for commercial and residential customers. It also does not preclude generation for emergency purposes. It does not preclude exemptions that are approved by government at any point in the future.

Muskrat Falls has been proven, Mr. Chair, to be the least-cost option for long-term generation to meet the needs of the Province. It is going to lead to lower and stable rates in the long term when compared to the available alternatives.

We have heard discussion tonight, this morning, yesterday, today – whatever day it is, Mr. Chair. We have heard a lot of discussion about natural gas and about wind generation, particularly from members of the NDP. Numerous studies, the best experts in the world, have confirmed that neither of those alternatives is viable and that Muskrat Falls is, in fact, the least-cost option.

Given the take-or-pay financial obligations where Newfoundland and Labrador Hydro is committed to buy Muskrat Falls energy, which makes good sense, we are not prepared to allow competition that is simply going to layer additional costs on customers. We have to ensure that no such additional costs are passed along to customers.

There has also been some reference, I think by the Member for The Straits – White Bay North, to other commercial, not industrial, but commercial and also residential customers and the impact of self-generation by commercial and residential customers on electrical load would actually be rather limited. The Member for Ferryland – I am sorry, the Member for Gander district. I believe he was born in Ferryland; he is the pride of Ferryland, Mr. Chair. He has miraculously appeared right here in from of me. I know those watching on television or on the Web cast cannot see, but I can tell you, Mr. Chair, it is rather uncomfortable. I think I would go as far as saying that it is disturbing.

Anyway, the impact of self-generation by commercial and residential customers on electrical load is actually going to be very limited. When you think about it, Mr. Chair, there are very few opportunities for residential or commercial customers to self-generate in a way that would be economical and in a way that would be competitive with retail power from the grid.

Small businesses and homeowners are not expected, in significant numbers of customers, to spend the substantial sums of money that would be required for self-generation. Any self-generation options would be cost prohibited in terms of the installation, especially when you look at the cost associated with the retail supply that is available on the grid. While people can generate energy for their own use, commercial and residential customers will not be able to sell such energy.

I am a little perplexed, though, by some of the comments I have heard, particularly from the Member for The Straits – White Bay North. He does not want Nalcor to make a profit. For some reason, a corporation that the citizens of Newfoundland and Labrador own, it would be bad for some reason for them to make a profit, according to the Member for The Straits – White Bay North. He does, on the other hand, suggest that the company should set up projects to devalue our investment in Nalcor. Then, on another hand, he suggests that the cabin owners and individual homeowners should not be allowed to, for instance, set up solar panels to generate their own electricity. I am a little bit confused at the logic or lack thereof that we are hearing from the members of the Third Party.

I have heard talks about the hot springs in Iceland. I have heard talks about pellets, Austrians, and other things that do not necessarily seem to connect. Perhaps when he gets up shortly, he will connect the dots. It is rather perplexing, Mr. Chair, because I believe this is a piece of legislation that provides clarity and makes a lot of sense.

Thank you.

SOME HON. MEMBERS: Hear, hear!