Churchill Falls: Quiet negotiation between Québec and N.L.

Posted on February 29, 2024 | By Ashley Fitzpatrick | 0 Comments



After about half a century of Churchill Falls power sales, Quebec is open to a new deal

Québec needs more electricity. According to the province’s lead utility, it’s a lot more. An Action Plan released by Hydro-Québec late last year suggests they’ll need 60 terawatt hours (TWh) of new electricity production a year by 2035. That’s in the range of 8,000-10,000 megawatts (MW) of new generation capacity, or more than the output of its three largest hydroelectric generating stations combined. But that’s just the beginning: the official electricity demand forecast describes the need growing from there, until at least 2050.

But even as the transition from fossil fuels to more sustainable power accelerates demand for electricity, time is just as rapidly running out on Hydro-Québec’s access to underpriced Churchill Falls power. Signed in 1969, the contract provided Québec’s main power utility with the vast majority of Churchill Falls power at the low price of three mills or about three tenths of a cent per kilowatt hour (/kwh) for the first five years and then declining to reach 2.5 mills. It wasn’t unbelievable in the year the contract was signed, but times change. And the next phase was always the jaw dropper. In 2016, an automatic renewal option extended the life of the contract to 2041, while dropping the price to just two mills, or about two tenths of a cent per kilowatt hour.

The low, low price and large volume of power resulted in the kind of imbalance that fuels the dreams and nightmares of utility heads and state leaders alike.

Talks about Churchill River power and the terms of the contract have been on and off through the decades. They’re back on now largely because Québec sees upgrades to the existing facility together with new developments along the Churchill River as potentially offering some of the quickest and most cost-effective means of additional power generation.

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