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CANADIAN INDUSTRY ONLINE - FEBRUARY / MARCH 2012
displace expensive, dirty bunker
“C” oil used in Holyrood;
• Approximately 1.0 terawatt
hours per year, or 20 per cent of
the output of Muskrat Falls, will
be provided to Emera Inc. for use
in Nova Scotia. In exchange,
Emera will invest over $1.2
billion, or 20 per cent of the
overall capital cost of the entire
project, and will be responsible
for 20 per cent of the operating
costs of the entire project for the
35-year life of the contract. As
an additional investment, but
not associated with a power sale,
Emera will invest approximately
$600 million towards the
Labrador-Island Link in ex-
change for transmission rights
for Nalcor Energy in Nova Scotia,
New Brunswick and New
England.
• The remaining power will be
sold into the Maritime Provinces
and the New England market
place. Nalcor Energy will be able
to sell power in these
jurisdictions as a result of
gaining existing transmission
rights from Emera Inc. The total
cost of the project will be
approximately $6.2 billion;
• With Muskrat Falls, the
Newfoundland and Labrador
electricity system will be run on
98 per cent renewable, emission-
free energy.
• Emera Inc. will receive
regulated rates of return on its
investments in the Maritime Link
and other transmission assets.
Today’s announcement is a
historic milestone in the
development of the Lower
Churchill resource. Milestones
that remain before the project is
sanctioned for construction
include: the release of the
generation and transmission
projects from environmental
assessment processes; f inal
ratif ication of the Lower Churchill
IBA and Churchill Falls Redress
Agreement; conversion of the
Nalcor/Emera term sheet into
formal
legal
agreements;
f inalization of f inancing; and
completion of pre-front end
engineering work
HIGHLIGHTS OF THE AGREEMENT:
• 8,600 person years of work
on the project within the
province between 2011 and 2017,
with 5,400 of these person years
occurring in Labrador. Adding
the indirect and induced
economic impact, there will be
18,400 person years of work in
the province, and 47,800 person
years in the whole country; with
peak employment of approxi-
mately 2,700 people;
• Surplus capacity from Musk-
rat Falls can be recalled as
needed for industrial develop-
ment in Labrador;
• The generating station at
Muskrat Falls will be 100 per
cent owned and operated by
Nalcor Energy;
• Total transmission systems
(the Labrador Transmission line,
the Labrador-Island Link and the
Maritime Link) will be majority
owned by Nalcor Energy (51 per
cent) and minority owned by
Emera Inc. (49 per cent); this
ownership structure will be
assigned to assets as follows:
Nalcor will hold 100 per cent of
the Labrador transmission and
71 per cent of the Labrador-Island
Link, while Emera will hold 29
per cent of the Labrador-Island
Link and 100 per cent of the
Maritime Link;
• At the termination of the
delivery of the Nova Scotia Block,
ownership of the Maritime Link
will revert back to Nalcor Energy
for $1;
• Nalcor Energy has the option
to acquire full ownership of the
Labrador-Island link at any time
and in any event it will revert
back to Nalcor Energy in 50
years;
• All engineering for the
generation and the Labrador-Is-
land link will be done in the
province;
• First consideration for jobs
in Labrador will go to the
Labrador Innu as outlined in the
New Dawn Agreement, then to
Labrador residents, and then to
residents of the province gener-
ally;
• Of the total 4.9 terawatt
hours per year of power to be
produced, initially 2.0 terawatts
will be allocated to the Island to
meet domestic demand and to
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