Churchill Falls contract: “It won't be settled in a few months”, says Legault

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Churchill Falls contract: “ çit will not be settled in months”, says Legault

A marathon of negotiations awaits Andrew Furey, on the left, and François Legault, on the right, who must renew the agreement in Churchill Falls hydroelectricity. (File photo)

The premier of Quebec expects a long process of negotiations with his counterpart from Newfoundland and Labrador, Andrew Furey, regarding the renewal of the electricity supply of the Churchill Falls power station concluded between the two provinces in 1969.

It won't be easy, it won't be settled in a few months, warns Mr. Legault in a press scrum on Wednesday, on the eve of a two-day trip in Saint John. The two provinces are about to reopen a case that has pitted them for decades.

The hydroelectric plant supply agreement allows Quebec to obtain electricity at a good price for more than 65 years without indexation; Newfoundlanders feel aggrieved, especially since the plant is on their territory.

However, Andrew Furey believes he is in a very good position against his Quebec counterpart when starting negotiations. We are not on our knees before Quebec, he said at a press conference on Wednesday. […] There is an urgent need in Quebec, not only for export, but also for domestic use.

Mr. Furey intends to use these arguments to put pressure on Quebec to obtain the right agreement.

The premier of Newfoundland and Labrador, Andrew Furey, considers himself in a position of strength as he begins negotiations for the Churchill Falls contract with Quebec.

The Churchill Falls contract is a central element of Quebec's energy strategy. Indeed, the province needs to increase its electricity production by 50% to achieve its goal of carbon neutrality by 2050.

The Legault government must therefore quickly determine whether it should turn to new sources of supply or whether it will be able to continue to obtain a significant share of electricity from Newfoundland and Labrador.

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“2041 may seem a long way off, but building a dam, if you include discussions with Indigenous communities, on average in Quebec it always took between 12 and 15 years.

—François Legault, Premier of Quebec

The Churchill Falls power plant currently provides a huge amount of energy in Quebec, at very low prices.

Hydro-Québec pays 0.2 cents per kilowatt hour and resells the energy at a much higher price, at 8.2 cents per kilowatt hour, according to figures for the third quarter of 2022.

Nearly a quarter of the province's needs, or 31 terawatt hours (TWh) of energy per year, are met thanks to this contract.

De moreover, Hydro-Quebec buys 90% of the energy of the power station of Churchill Falls.

The province of the Atlantic considers itself cheated in this contract and tried to several times to break it in court.

The Legault government does not rule out paying the province in the far east of the country before the end of the contract if the terms of the renewal remain profitable for Quebec.

It has to be win-win. It will depend on the price they offer us from 2041, warns Mr. Legault, implying that everything is on the table.

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