The Office of the Premier
Confederation Building, East Block
P.O. Box 8700
St. John’s, NL A1B 4J6

August 28, 2025

Dear Premier Hogan:

First of all, I wish to congratulate you on your election as the Leader of the Liberal Party and on becoming our province’s 15th Premier. Public service is an honourable and all-consuming endeavour, and I am appreciative of all who put themselves forward to serve our province.

As you are aware, I have expressed some very serious and consequential concerns about the existing Upper Churchill/Gull Island MOU between Hydro Quebec and the Government of Newfoundland and Labrador. I wish to assure you that these concerns are unequivocally in no way partisan or politically motivated; rather they are based on a very thorough analysis of the MOU. I feel genuinely alarmed and worried for the future of our province and the generations who will be seriously impacted by the eventual fall out. I hope you would agree that this matter deserves meaningful consideration, particularly in light of the vast number of like-minded businesspeople, former Hydro officials, bureaucrats and people of all political stripes and backgrounds, who have emerged to offer sincere critiques of the MOU.

I recently wrote to Prime Minister Carney simply to express my perspective after hearing some comments at the Council of the Federation meeting, that this MOU is a nation building project. The benefits that will accrue to Quebec are extraordinarily lopsided compared to the benefits that will accrue to Newfoundland and Labrador, and this is evident when the MOU is fully analyses. The Prime Minister responded and recommended that I contact you directly to discuss these issues. As the one individual who holds the future of our province and our people in your hands, I would request an opportunity to meet with you one on one, so that I can fully explain the various areas of concern within the MOU; and to also hear directly your position on these matters. I thank you in advance for your consideration.

Sincerely,
Danny Williams

The Editor, The Telegram
August, 25th, 2025

Dear Editor,

We, the undersigned, believe that the recently announced Memorandum of Understanding between NL Hydro (NLH) and Hydro-Quebec (HQ) represents the most consequential economic decision our province has faced in a generation. And, given our less-than-stellar history on such matters, that any government allowing it to proceed without rigorous and continuous guidance from a definitively arms-length panel of independent experts is being demonstrably negligent.

Though we don’t count ourselves as “experts,” the 1969 contract and other notable debacles have made it painfully clear that applying the “just trust us” approach to such monumental decisions should no longer be considered responsible or acceptable. As for the few actual NL experts who have taken it upon themselves to evaluate the available information, we would do well to pay better heed to them than when they warned us about Muskrat.

This time, they caution that:

• The upfront cash we gain from locking in early is a trade-off for a lower price per kilowatt-hour (kWh) after 2041-essentially mortgaging our future for a short-term fix. In blunter terms, selling out our children and grandchildren.
• The price per kWh will be heavily indexed to Québec’s lowest-in-G7 electricity rates rather than the
  broader markets in Ontario, New England, or beyond.
• Gull Island power will be sold at a fixed cost-based rate, which will restrict our return to a defined premium over the cost of borrowing, despite rising demand and unknowable real market rates.
• And, the promised $1 billion per year in revenue for the next 17 yearsis misleading. For, after subtracting operating costs and Hydro-Québec’s 34.2% profit share, NL’s actual revenue will be closer to $650 million in nominal dollars.

There have been other red flags raised, relating, but not limited to, significant new financial exposure, loss of control of the pace of development, the lack of a water management agreement, and insufficient information being released to allow a proper cost/benefit analysis of this approach as compared to alternatives. But given limited space and short attention spans, we come to the crux of the matter: If any of these claims are true, they should be considered deal-breakers.

Justice LeBlanc, in his report on Muskrat Falls, recommended that all future projects exceeding $50 million be vetted by a panel of independent arms-length experts to ensure transparency and to reduce the risk of mistakes rooted in bureaucratic groupthink and short-term political opportunism. The government will point to the Independent Churchill Falls Oversight Panel as evidence of compliance with this elemental safeguard. But, given that the panel was appointed by, is paid by, and reports directly to the very government it’s meant to oversee, it bears greater resemblance to an arm of that same government than an independent watchdog. We cast no shade on the credentials or character of the panel members, but a body that lacks the institutional guardrails of independent funding, peer-reviewed reporting, and non-governmental appointments fails to meet the widely understood meaning of “arms-length.” In matters of such consequence, even the perception of a reluctance to speak truth to power can be self-defeating. The recent firing of the Commissioner of the US Bureau of Statistics, after she delivered a disappointing jobs report, underscores the importance of properly structured arms-length arrangements in safeguarding the neutrality and integrity of public institutions in the face of political pressure.

So… we ask:

• Why ignore the hard-earned lessons of Muskrat? Why not follow Justice LeBlanc’s advice and engage global experts (alongside local ones) within an unambiguously arms-length arrangement?
• Why even agree to sit at the table without first securing a commitment that future prices will be unbreakably indexed to free-market rates?
• Will the full pricing formula be made public before signing?
• Considering Hydro-Québec’s timelines to secure a stable supply before 2041, are we committing too early? In light of impending interprovincial trade reforms (there are even whispers of a national electrical grid), are we already in a stronger bargaining position than when the MOU was negotiated? And, isn’t our hydro power becoming even more valuable as a backstop to large-scale, but intermittent, wind and solar?
• Is it wise to bundle multiple large projects and expenditure commitments into one agreement? Shouldn’t follow-up phases be contingent on NLH and HQ meeting clearly-defined benchmarks?
• Is the rush to a hydro deal partly rooted in broader considerations, like mining developments and expansions in Labrador? If so, let’s remind ourselves that this is a fifty-one-year contract, and the minerals will still be there in a year or two.
• Given that Churchill Falls provides some of the cheapest, most stable electricity in North America and that former HQ CEO Michael Sabia has called Gull Island “the best-remaining hydro project in North America,” are we undervaluing these assets for the political sugar rush of short-term jobs?

So far, the government has been less than forthcoming in addressing these and other reasonable questions. Yes, the issues are complex-but a lack of transparency breeds mistrust and increases the risk of irreversible mistakes.

This letter is not about partisanship, but about encouraging robust debate and oversight on a decision that will shape our province’s future. And, given that our ability to fund healthcare, education, and infrastructure in the coming decades will largely depend on getting this right, shouldn’t proceeding with the utmost caution be a shared priority?

To our political leaders: Let’s rise above partisanship, and let every candidate in the upcoming election declare their position on how we proceed. Let them tell us if they stand for more of the “just trust us” approach, or for transparent, arms-length oversight as recommended by Justice Leblanc.

To our fellow citizens: How do you feel about continuing to sell electricity at a significant discount to HydroQuébec, while here at home we struggle to keep our hospitals staffed, our roads repaired, and our schools properly funded? If that doesn’t sit right with you, then let’s make this election a referendum on how we can best avoid the mistakes of the past and get this future-defining deal done right.

Yours sincerely,
Alvin Hewlett, Alton Hollett, George Power, Ray Hawco

December 12, 2024, MOU – It’s All About the Price!

August 2025

INTRODUCTION

Michael J. Wilson, CA, FCA – prior to my retirement in 2013, I was an executive partner with a global professional services firm. I have significant experience in negotiating and/or reviewing complex multi-entity, multi-jurisdictional contracts and agreements. I also have significant experience in designing and deploying effective oversight mechanisms focused on critical corporate functions and initiatives.

I was appointed to the Independent Churchill River Oversight Panel (the Panel) because of my independence, orientation, skills and experience. I resigned on May 12, 2025 because, in my view, the independence of the Panel became impaired and I no longer believed the Panel’s reports would meet the public’s expectations and need for an independent analysis supported by a full and frank commentary.

My objectives in providing this commentary and analysis are: to provide a healthy challenge to published information; facilitate a more informed discussion; and encourage a more balanced outcome. This commentary and analysis is limited by the content of public information and the facts and assumptions stated herein, it should be read with the appropriate caveat. It was prepared after the release of the Panel’s second quarterly report. I was not involved with the preparation of the second report released in July 2025.

The July report does not provide any findings arising from a detailed review of the MOU; it does not provide any insight as to the reasonableness of projected costs, risks or if the projected benefits are fairly stated; it does not identify open items to be negotiated or key decisions to be made during ongoing negotiation process; and it provides little insight as to the specific oversight mechanisms deployed by the Panel to ensure public policy and commercial objectives will be achieved.

The MOU is long and it’s complicated therefore it is unlikely many would take the time to unravel its complex verbiage, identify information gaps and develop a perspective as to if the economic benefits are balanced or would materialize as projected. Consequently, the public at large is dependent upon those who have the time, interest and skills to review the MOU in detail and assess the fairness of the value sharing between the parties. My analysis, while limited in scope, indicates there may be significant opportunities to improve the anticipated outcomes for the province, in particular with respect to pricing.

Issues for discussion include but are not limited to:

1. What is the justification for selling 40% of the “value” of Gull Island (GI), the most valuable undeveloped resource in the province, without an independent valuation? The transaction “price” and other commercial terms require an enormous amount of scrutiny.
2. What is the justifica9on for selling existing Churchill Falls (CF) power to Hydro Quebec (HQ) at a “price” at least 50% lower than the current replacement “cost”? How does this represent fair “value”?
3. What is the justification for selling 100% of the power from all new developments to HQ for a “price” equal to the “cost” to generate, without a “price” escalation clause tied to the increase in the “value” of the power? The proposed pricing mechanism provides a lower rate of return than the 1969 contract.

The opportunity to renegotiate the 1969 CF contract and monetize the potential of the proposed new developments could be transformational if the full value is captured by the province.

CONFUSION AND FEAR

• The MOU debate has resulted in much confusion and expressions of fear. The MOU is very confusing, to a large extent because it intertwines two distinctly different types of negotiations into one agreement.
• The first, a renegotiation of the existing CF power purchase agreement (PPA) is inherently a distributive negotiation in that CF(L)co generates the power needed by both HQ and Newfoundland and Labrador Hydro (NLH) and the primary issues to be agreed are “price” and volume allocations. All Parties have access to CF(L)co information, so it is difficult to accept the existence of commercially sensi9ve information in this situation.
• The second, is inherently an integra9ve negotiation in that NLH and HQ agreed to: cooperate and collaborate transparently to create the maximum value from the new developments and agree how that value is to be shared in a fair and equitable manner going forward (ie. 60/40) and then agree to “price” and volume alloca9ons. Given the
  expressed and agreed need for transparency, it is difficult to accept the existence of commercially sensitive informa9on at this stage of negotiations.

The industry, commercial and accounting terms used throughout the MOU are unfamiliar to many and may cause confusion. Many press releases, including direct quotes from politicians and both senior hydro officials, have also added to the confusion and highlight the frequent misuse and possible misunderstanding of terms such as cost, price and value. To clarify, “cost” is an accounting term, a calculated number that may be audited to ensure its accuracy and completeness. “Price” is the transactional amount agreed between a buyer and a seller paid to acquire a commodity. “Value” is an estimate of the monetary worth of the commodity to be acquired. “Value” may differ significantly from both “cost” and “price”.

Added to this confusion is the great fear expressed by many that:

• the lessons learned from previous mega projects may not be heeded;
• the posture and negotiating tactics of HQ may dominate the structure and flow of ongoing negotiations and balance the outcomes in favor of HQ;
• HQ will have 100% control over the design, construction, financing and timing of any new development on the Churchill River (CR) until 2041;
• entities with existing business rela9onships with HQ may have a significant competitive advantage in obtaining contracts;
• the NLH preliminary cost projections are dated therefore likely unreliable;
• HQ has not publicly agreed to NLH preliminary cost projections and significant differences may occur upon the completion of new and or updated studies;
• the NLH benefit projections are based upon a significant number of hypothetical
  assumptions long into the future and consequently may not materialize as projected;
• the potential for management and political bias is ever present in public representations (Fact Sheet, press releases etc.);
• effective oversight mechanisms have not been and may never be effectively deployed;
  and
• scheduled reports and updates may not meet the needs and expectations of the public.

KEY FINDINGS – it’s all about Price, Price and Price

RenegoIaIon of the 1969 CF PPA

A detailed review of the terms of the MOU and other publicly available information related to the 1969 CF PPA renegotiation result in the following key findings:

• The CEO of NLH stated “the worth of CF to HQ is between 11-13 cents” however the power will be sold to HQ for an agreed average price of 5.9 cents (pv).
• According to the MOU the “price” paid for CF power is intended to reflect the projected fair “value” of the power, however it is unclear how and when this objective will be accomplished.
• HQ will not pay 11 cents un9l 2050 – 25 years hence.
• The initial 1969 price of approximately .03 cents equates to approximately 2.6 cents today. HQ will con9nue to pay less than 2.7 cents un9l 2030 – 61 years later.
• The new CF PPA appears to be a firm price contract as the stream of payments set out on Schedule G have been predetermined to target $33.8 billion (pv).
• The MOU is unclear as to the relationship between the amounts paid by HQ to CF(L)co prior to 31/12/41 ($19.8B – 10%) and the amounts to be paid thereafer ($174.8B – 90%).
• It would appear that the payments prior to 2042 may simply be an advance (perhaps to help address the GNL short-term fiscal needs) of payments otherwise payable thereafer.
• In any event, it is quesIonable if the financial benefits accruing to the GNL arising from HQ payments payable aNer 2041 (amounIng to 90% of the projected benefits) can reasonably be attributed to the early termination of the 1969 CF PPA.

The shared economic benefits from the renego9a9on of the CF 1969 PPA may be summarizedas follows:

• Depending upon the true nature of the relationship between the pre and post 2042 payments, CF(L)co may receive between zero and $19.8 billion in “additional” revenue from HQ throughout the term of the new CF PPA.
• The price of 5.9 cents (pv) is considered to be approximately half the cost of clean renewable energy alternatives available in North American thus saving HQ
  approximately $194.6 billion throughout the term of the new CF PPA.

The CR New Developments
A detailed review of the terms of the MOU and other publicly available information related to the proposed new developments on the CR result in the following key findings:

1. CF Upgrade and Expansion
• Similar to the 1969 contract, there is no mechanism in the MOU to provide for an escalation in “price” should the fair “value” of power from the CF upgrade and CF expansion increase in future years.
• Construction cost overruns for the CF upgrade and CF expansion will not be “funded by HQ”, rather they will be capitalized in the financial accounts of CF(L)co and funded by new CF(L)co debt.
• At the end of the contract approximately 23% of the original capital cost including cost overruns for the CF expansion will remain on the books of CF(L)co to be recovered from future off-takers.
• The projected return on investment (ROI) for NLH from the CF upgrade and CF expansion is approximately $90 million per year or approximately $4.5 billion over 50 years.

2. Gull Island Joint Venture (GIJV)
• The MOU provides that HQ will acquire certain rights and a 40% interest in the future value of GIJV, the most valuable undeveloped resource in the province. It would be helpful if a fairness opinion or discounted cash flow calculaIon was provided to support the transacIon price, but such is not the case.
• Similar to the 1969 contract, there is no mechanism in the MOU to provide for an escalaIon in “price” for the GI power should the fair “value” of power increase in future years.
• The MOU sets out the agreed volume allocations and provides that the “price” shall equate to the “cost” (as set out in the new GI PPA’s) estimated by HQ to be 11 cents on average.
• It should be noted that the HQ 11 cents estimate appears to be a nominal dollar estimate not a present value (pv) estimate.
• NLH have not provided a nominal dollar or present value estimate.
• Using a discount rate of 5.822%, for 51 years, an 11-cent average equates to a present value average of approximately 3.5 cents – 2.4 cents less than the very low average price to be paid for the CF power.
• The present value of 11 cents in 2085, discounted at 5.822% is .037 cents.
• The MOU provides that HQ will have 100% control over the design, construction, financing and 9ming of the Gull Island (GI) development until 2041.
• The MOU provides the power block (2250 MW’s) generated by the GI development will be allocated 100% to HQ throughout the term of the contract.
• Cost overruns for GI project will not be “funded by HQ” rather they will be capitalized in the accounts of GIJV and funded by new GIJV debt.
• At the end of the contract approximately 23% of the original capital cost including cost overruns will remain in the accounts of GIJV to be recovered from future off-takers.
• For the GIJV investment NLH will receive a ROI of approximately $317 million per year or approximately $16 billion over 50 years.

The shared economic benefits from the new developments may be summarized as follows:

The CEO of HQ has stated “the price paid for the power from the new developments is the lowest price possible for HQ and will provide over $200 billion of cost savings compared to existing alternatives”. Approximately $4 billion per year.
The total projected ROI for NLH related to the new developments will amount to an estimated $20.5 billion or on average $410 million per year, with zero possibility of a “price” increase resulting from an increase in the fair “value” of the power.

Should one apply the commercial terms set out in the MOU for the proposed new GIJV to the 1969 CF(L)co project the following would result:

• Cost of approximately $1 billion
• 75/25 debt to equity ratio; and 65% ownership
• equity investment required = $1B x 25% x 65% = $163 million
• Annual return of 8.5% per year = $13.8 million for 56 years = $773 million total ROI.

The total return related to the ill-fated 1969 contract for GNL is estimated to be $2 billion while QC is estimated to have received an estimated $28 billion. The MOU proposes a lower rate of return for the GIJV than the province received from the 1969 contract.

CONCLUSION

As confusing as the MOU may be, in part resul9ng from there being two significantly different agreements rolled into one and the lack of information and/or explanation of many key issues, the actual outcomes of the MOU will have significant impact on the wellbeing of every Newfoundlander and Labradorian for many years to come.
The GNL has an overwhelming responsibility to ensure the definitive agreements maximize the benefits and capture the full value of the CR for future generations.

LETTER: Former NL premier Brian Peckford

Man who quit Churchill Falls panel wants them to release his resignation letter — in full

CBC News – September 11, 2025

Mike Wilson resigned from the Churchill Falls negotiating committee in May. (CBC)

An accountant who quit a panel overseeing energy negotiations between the electric utilities of Newfoundland and Labrador and Quebec says the public should be able to read his full resignation letter.

Group of 9 Claims NL ‘Repeating the 1969 Giveaway’ that was the Lower Churchill Contract

VOCM Local News – September 4, 2025

The Churchill River and Churchill Falls (Government of Newfoundland and Labrador)

The so-called Group of 9, which includes former politicians and lawyers, believes that Newfoundland and Labrador is repeating the 1969 giveaway that was the Lower Churchill contract.

The group, which is calling for the resignation of the NL Hydro board, is challenging its handling of the December 2024 MOU with Hydro-Quebec.

Last week NL Hydro CEO Jennifer Williams re-iterated that the price set out in the MOU is not the final price.

The Group of 9 claims that NL Hydro refused to seek independent advice on the long-term deal, something its members – including Danny Williams, Ches Crosbie and Jack Harris – believe represents “a profound failure of governance.”

Former member of the Oversight Panel, Michael Wilson, resigned from the panel in May citing “impaired independence,” and warning that its reports would not meet public expectations.

The group says locking the province into a 50-year agreement now, would “repeat the catastrophic imbalance of the 1969 contract.”

Members of the Group of 9 include:

Bernard Coffey, KC – Lawyer; Former Clerk of the NL Executive Council

Ches Crosbie, KC – Former Leader, NL Progressive Conservative Party; Former MHA

Jack Harris, KC – Former Leader, NL New Democratic Party; Former MP and MHA

Roland Martin – Former Deputy Minister of Finance; Longest-serving Director, NL Hydro

Bob Noseworthy, P Eng – Former President, Pennecon; Executive Director Canadian Construction Association; President, Provincial SPCA

Roger Simmons – Former Federal Cabinet Minister; Former Liberal MP and MHA

Walter Tucker, P Eng – Former Senior Vice-President (Atlantic Canada), SNCLavalin Lorne Wheeler – Former Deputy Minister; Policy Advisor

Danny Williams, KC – Former Premier of Newfoundland and Labrador

Among the points listed by the group and highlighted for NL Hydro’s Board of Directors are:

• Secretive Process: Government-appointed panels that formed the basis of the MOU worked largely in secret, bound by NDAs, with little information made public.
• Quebec Can’t “Walk Away”: Quebec’s own media and officials admit that time weakens Quebec’s position – “time is not Quebec’s friend” (former HQ CEO Michael Sabia). Critics say NL has unprecedented leverage, not weakness.
• Show Your Work: Hydro dismissed the August 26 letter as inaccurate. The group asks Hydro to identify specific errors.
• Governance Gap: Hydro’s Board did not seek independent legal, financial, or utility advice for a multibillion-dollar, 50+ year deal. Critics say this breaches basic governance practice.
  Independent Panel’s “Impaired Independence”: Michael Wilson resigned from the Independent
• Oversight Panel, citing compromised independence — reinforcing the group’s call for scrutiny.

Question of the Day

VOCM Question of the Day – September 4, 2025

Do you have confidence in the role of the Churchill Falls Review Panel following the resignation of one of its members? 

OPINION ‘The same deal as in 1969 at the end of the day’: NL must question Gull Island MOU

The Telegram – September 30, 2025

“The same deal as in 1969 at the end of the day” should prompt independent review of Churchill Falls deal, says Senator David Wells

Newfoundland and Labrador Senator David Wells Contributed