CBC News

January 23, 2006

A Toronto-based environmental organization says Ontario’s new-found interest in long-term power contracts could make the development of the lower Churchill River more feasible.

The Energy Probe Research Foundation believes a recent policy shift in Ontario may change the economics of the long-awaited hydro project.

Tom Adams, the executive director of Energy Probe, said the government of Ontario is ready to buy as much power as it can, for as long as it can.

"Senior Ontario government officials have been very clear in public comments that their instructions are to pursue long-term contracts," Adams said.

"Some of them very controversial like nuclear, where the government recently entered into a 36-year contract for supply."

Ontario has partnered with Hydro-Québec and SNC Lavalin for one of the bids that has made it to a shortlist for pursuing a Lower Churchill project.

On Friday, Premier Danny Williams said Newfoundland and Labrador Hydro had been directed to apply to transmit energy through Quebec.

The process of making such an application has begun even though the province has not yet selected a bid for development of the megaproject.

Adams said there is no guarantee that the Ontario-Quebec proposal will be selected, but he added Ontario’s shift in outlook may give the bid some steam.

The feasibility of developing hydro power on the lower Churchill River has been studied for decades. In recent years, one obstacle has been a market shift that saw buyers avoid long-term contracts.

Opposition Leader Gerry Reid said that factor stopped the former Liberal administration from developing the project in 1998 and in 2003.

"At that time, the banks told us, and the financial institutions, that it wasn’t viable unless you had a customer who was committed to signing a contract for 25 or 30 years," Reid said.

"As a result, they wouldn’t finance a project for us."