N.L. Hydro not 'wheeling' more power through Quebec under new Churchill MOU

The new Churchill River power agreement does not give Newfoundland and Labrador Hydro the ability to directly sell more power to customers in the northeast United States or Ontario, running electricity over Hydro-Québec lines.

It's one of the details drawing attention, as more people get a look at the agreement signed on Monday by both provinces.

Transmission of power was a highlight in the government of Newfoundland and Labrador's share of the announcement. The province, "has secured the ability to transmit power from Churchill Falls and Gull Island through Quebec to the U.S. marketplace," it stated.

The government detailed "a portfolio of transmission to other markets," totaling 985 megawatts. However, that includes "synthetic exports," where — in reality — Hydro-Québec will purchase the electricity, and pay Newfoundland and Labrador Hydro based on a formula reflecting a blend of prices in the New York, New England and Ontario markets.

WATCH | How will N.L. transmit power to other markets?:

Under the agreement, only up to 265 MW can be moved for direct sales by Newfoundland and Labrador Hydro. That block comes under transmission rights the corporation already holds.

In 2009, then-premier Danny Williams announced a "historic and momentous" transmission agreement for some of the power the province had available to it from Churchill Falls. The agreement replaced successive power purchase agreements for the same block, whereby Newfoundland and Labrador was selling the power to Quebec instead.

The Federal Energy Regulatory Commission expects utilities to "wheel" power from a third party over lines — where there is space on the lines. Negotiated transmission rights allow for a particular seller's supply to be prioritized, or even access through a particular corridor to be guaranteed.

When it comes to the agreement between Newfoundland and Labrador and Quebec now under public review, the idea of not gaining a greater ability for direct sales beyond Quebec is not sitting well with former chair of the Newfoundland and Labrador Public Utilities Board David Vardy.

"We — Newfoundland and Labrador Hydro — should be able to negotiate with our customers, which is what we do with the 265-megawatt block. So this is a completely different animal. It doesn't give us the transmission access that we need and it maintains our current status where we're essentially second-class citizens in Canada because of our geography," Vardy told CBC News.

Others are suggesting it limits the demands on Newfoundland and Labrador Hydro. A former representative of Hydro-Québec, Yvan Cliche, argues it may not be Newfoundland and Labrador Hydro managing power over Quebec lines, but that doesn't mean it's not still a good deal on the table.

"I would say the result is the same. You still have access to the U.S. market. You can access the Quebec transmission networks and sell this electricity [to Quebec] at the same price that Hydro-Québec would have done being the main exporter," he said, calling it ultimately "advantageous" for Newfoundland and Labrador.

CBC News asked Newfoundland and Labrador Hydro for comment, but received no response.

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