Eastern Canadian provinces replace controversial Churchill Falls Hydropower deal

On Thursday, the Canadian province Newfoundland and Labrador signed a Memorandum of Understanding with its neighboring Quebec to create a deal for hydroelectric generation in Labrador. This agreement is expected to generate revenue of approximately C$200 billion (US$140.97 billion).

The agreement will replace the contentious 1969 contract for the export of power from Upper Churchill Falls Hydroelectric Facility in Labrador, which has been the source of bitter tensions between the two provinces over the past decades.

The majority of revenue from the Churchill Falls plant has always been sent to Quebec. This is because Quebec had the contract right to purchase the power for extremely low fixed rates and then sell it to the U.S. at huge profit.

Andrew Furey, Premier of Newfoundland and Labrador, said at a press conference that "this changes everything for our Province" to applause and cheers. This new agreement leaves behind the naivety of 1969 and its short-sightedness. It doesn't start on some imaginary far-off day. "It is here and now."

Furey stated that the new deal will have a significant impact on Newfoundland-Labrador's growth and prosperity. It is expected to bring in C$2 billion annually by 2044, and C$6 million annually by 2060 due to the growing demand for clean energy.

The original contract, which was supposed to expire 2041, was renegotiated seventeen years earlier. The new agreement will see Newfoundland and Labrador receiving a higher price for Quebec's power and cover the joint development of hydroelectric projects, including the new 2,250 Megawatt generating station known as Gull Island.

The deal will ensure energy security for Quebec as its demand for power grows. It adds 2,400 megawatts and secures a favorable rate until 2075.

Quebec Premier Francois Legault stated that residential costs in Quebec will be limited to 3% per year as a result of the agreement and estimated that his province will save more than C$200 billion during the next 50 years.

Legault, sitting next to Furey and smiling, said: "It's an agreement that benefits both parties." It's fair. "C$200 Billion for Andrew and C$200 Billion for me." ($1 = 1.4187 Canadian dollars) (Reporting and editing by Diane Craft in British Columbia, Nia Williams)

(source: Reuters)