St. John’s, NL, June 17, 2022 – Newfoundland and Labrador Hydro today shared an update on the costs of the Lower Churchill Project and progress on the development of software required to complete the Labrador Island Link (LIL) portion of the project. This follows the previously announced commissioning of other assets comprising the Lower Churchill project: the Muskrat Falls Plant and the Labrador Transmission Assets.

Hydro has been transferring power over LIL as conditions allow, and reached a peak transfer of 421MW. To date, LIL transmission assets has delivered approximately 340 GWh of Muskrat Falls power to homes and businesses in Newfoundland that would otherwise have been served by the Holyrood Thermal Generating Station, saving about 570,000 barrels of oil and reducing greenhouse gas emissions that would have otherwise occurred.

Hydro continues to work with GE to advance the software required to appropriately operate the Labrador-Island Link at varying levels. Last week, the latest version of the full function bipole software was tested at the offsite facility in Stafford, and passed factory acceptance testing (FAT). That latest version of software has now been loaded onto the system for the next testing phase.

Additional tests are planned over the next couple of months, including testing at 475MW, which if successful will allow Hydro to operate the LIL between 450 and 675MW. If LIL performs well as this level, Hydro will test functionality at 700MW. This test will require colder weather and higher system demand and is expected to take place in the fall.

Facilities capital cost (the cost of construction) remains the same as the September 2020 update at CAD $10.18B. There was no impact on the forecasted cost as a result of the recent decision of the Astaldi Arbitration Tribunal.

In response to the current LIL timeline, carrying costs have increased by CAD $256 million. As a result, the forecasted total project cost is increasing from CAD $13.11 billion reported in September 2020 to CAD $13.37 billion. For this cost update, Hydro will not require any equity from the Province. The amount will be covered through internal funding sources and will be considered as part of the overall rate mitigation plan.

The updated cost presented today will not impact customer rates for 2022—July 1st rates are anticipated to remain stable. Any further changes to rates will not take place until finalization of the regulatory process over the coming year.

Quotes

“We know that any change in the cost of this project is challenging for customers. We have been working to manage the risks we have faced. While there have been challenges along the way, and there may be more, we are making progress. The plant is producing, and we are delivering power from the plant, over the LIL, to Island customers and Nova Scotia.  We have work to do over the coming months on the commissioning, but we want customers to know we prioritize operating our system reliably and will continue to do so over the fall and winter. We will keep customers informed as we progress through testing of the system. We know you count on us, and we take that responsibility seriously.”

Jennifer Williams, President and CEO, Newfoundland and Labrador Hydro

Resources:

Technical Briefing Presentation