N.L. awarded nearly $25M in Churchill Falls settlement with Hydro-Qubec

Newfoundland and Labrador and Hydro-Qubec have reached a nearly $25 million settlement over the Churchill Falls hydroelectricpower contract.

The settlement included inNewfoundland and Labrador Hydro's second-quarter financial results Tuesdayand first reported by allNewfoundlandLabrador followeda 2019 court win that sawthe Quebec Court of Appeal rulethat the Churchill Falls Corporation has the right to sell energy produced above a certain threshold.

Newfoundland and LabradorHydro is a majority shareholder of the Churchill Falls Corporation.

The 2019 decision meantthe corporation should have made more money since 2016, andsparked nearlytwo years of negotiations.

The end result is that Hydro-Qubec has agreed to pay the Churchill Falls Corporation a retroactive payment of almost $25 million.Hydro-Qubec retains its annual energy entitlement.

The initial contract was signed in 1969 and has since expired, but a renewed power contract, effective Sept. 1, 2016,is valid until 2041.

Hydro-Qubechad successfully argued in court that the contract is valid because the utility assumed the costs and risks that came with the hydroelectric project when the contract was signed. The utility purchases a majority of the electricity generated by the central Labrador facility forless than market value.

Newfoundland and LabradorHydro confirmed the settlement Wednesdaybut declined an interview request, saying only thatthe settlement contains commercially sensitive information and releasing it might upset Hydro-Qubec.

From the signing of the contract in 1969 to 2019, Hydro-Qubec made profits ofclose to $28 billion, compared with just $2 billion for Newfoundland and Labrador.

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