Muskrat Falls 'lowest cost alternative' says former Nalcor chair

The former chair of Nalcor Energy's board of directorssays Muskrat Falls was the "lowest cost alternative, by a long shot" for meeting the power needs of customers in Newfoundland and Labrador.

Ken Marshall told CBC Radio's Crosstalkon Tuesday there were no better options on the table when the provincial government made the decision to sanction the project.

He said another agreement with Quebec to buy power was "not an option."

He also said that other sources of power, such as wind, are not reliable and something had to be done to repair or replace aging assets in the province like the 50-year-old oil-fired generating unit at Holyrood.

"There were alternatives that would not have cost $11 billion in the short run but would have cost a lot more than $11 billion in the long run," Marshall said.

"We could have upgradedHolyrood, burned natural gas, instead. It would have cost billions and you'd have been buying power and spilling it.You'd be buying gas. You'd still be a dirty provider and you know that is not an option."

Marshall, who resigned from Nalcoralong with other directorsin a dispute with the Dwight Ball government over the leadership of CEO Ed Martin, said the rationale for the Lower Churchill Project megaproject is not well understood.

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"The economics of Muskrat Falls were built without any recognition for the excess power that's going to be sold so there's a lot of benefits here that people don't see," he said during a discussion with Ian Lee, from the Carleton University School of Business.

N.L. 'got taken to the cleaners'

"I'm not disputing that Newfoundlandand Labradorneededenergy in the future," replied Lee, a critic of the Muskrat Falls deal.

"What I'm saying is that they could have sourced it from Quebec [at a lower cost] ... They chose not to."

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At five cents perkw/h from Quebec, compared to 22 cents from Muskrat Falls, Lee said "Newfoundland and Labradorgot taken to the cleaners ... It's the underlyingeconomicswe have to confront."

He said a transmission line could have been built to bring the power to the island, without incurring the costs of a generating station.

"Just because there is going to be green power,doesn'tmake this specific project the best," Lee added, suggesting that the province "cut off its nose to spite its face" because it is angry at Quebec over the Upper Churchill contract.

"Disingenuous," Marshall shot back, citing the history between the two provinces, as well as lawsuits and appeals now before the courts.

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He said energy rates in the province will go up with or without Muskrat Falls.