By Nia Williams
(Reuters) – The Canadian province of Newfoundland and Labrador on Thursday signed a memorandum of understanding with neighboring Quebec for a deal on hydroelectric generation in Labrador that will bring an estimated C$200 billion ($140.97 billion) in revenue by 2075.
The deal will replace a contentious 1969 contract to export power from the Upper Churchill Falls hydroelectric facility in Labrador that has been a source of bitter tension between the two provinces for decades.
Although Newfoundland and Labrador owns the majority of the Churchill Falls plant, most of the revenue has always flowed to Quebec, which under the original contract had the right to buy the power at extremely low fixed prices and sell it on for huge profits in the U.S.
“This changes everything for our province,” Newfoundland and Labrador Premier Andrew Furey told a news conference, to cheers and applause. “This new deal leaves behind the naivety and the short-sightedness of 1969, it doesn’t wait to start at some far-off imaginary day. It is here, it is now.”
Furey said the new deal would have a generational impact on the growth and prosperity of Newfoundland and Labrador and bring in revenues of C$2 billion a year by 2044 and C$6 billion a year by 2060 as demand for clean power grows.
The original contract was meant to expire in 2041 but was renegotiated 17 years early. The new deal will increase the price Newfoundland and Labrador receives from Quebec for its power and also covers the joint development of new hydroelectric projects in Labrador, including a new 2,250 megawatt generating facility known as Gull Island.
For Quebec the deal ensures energy security as its power demand grows, adding 2,400 megawatts of capacity and securing a favorable price until 2075.
Quebec premier Francois Legault said residential cost increases in Quebec would be capped at 3% a year thanks to the deal and estimated his province would save over C$200 billion over 50 years.
“It’s a win-win deal,” Legault said, seated next to a smiling Furey. “C$200 billion for Andrew, C$200 billion for me, it’s fair.”
($1 = 1.4187 Canadian dollars)
(Reporting by Nia Williams in British Columbia; editing by Diane Craft)