Emera questioned Danny Williams’s motives during power deal talks: leaked cable

<p>HALIFAX – A leaked diplomatic cable says a senior official with Emera Inc. (TSX:EMA) expressed concerns that the energy company may have been used as leverage by former Newfoundland and Labrador premier Danny Williams in negotiations to develop the Lower Churchill hydroelectric project.</p> <p>The document leaked Thursday by online whistleblower WikiLeaks says the U.S. consul general in Halifax met with James Spurr, who is identified as a senior executive with Emera, around January 2010.</p> <p>During that meeting, Spurr voiced reservations about Williams’s motives in negotiating with Emera to develop the multibillion-dollar Lower Churchill project in Labrador, according to the cable from the U.S. Consulate in Halifax to the U.S. Embassy in Ottawa.</p> <p>”Spurr explained that N-L had been the victim of bad resource deals in the past, which has left Williams very cautious if not suspicious in his business negotiations,” says the cable dated Jan. 15, 2010.</p> <p>”Given that legacy, Spurr remarked that he and his senior colleagues are equally cautious in dealing with the premier, with knowledge it makes more financial sense for N-L to do a deal with Quebec than with them.</p> <p>”In fact, Spurr indicated he wouldn’t be surprised if Williams ended up doing just that, and leaving Spurr and colleagues to speculate that Williams might be using them to exert more pressure on Quebec to offer a better deal for N-L.”</p> <p>But last November, Williams and Emera announced with much fanfare that they had struck a $6.2-billion agreement to develop the Lower Churchill project.</p> <p>A spokeswoman for Emera, the owner of Nova Scotia Power and other utilities, said the company does not dispute the meeting took place but believes the leaked cable will not harm its interests in Newfoundland and Labrador.</p> <p>”We have a strong relationship with government and our business partners,” Sasha Irving said late Thursday. “We don’t consider this will have an effect on our relationship with Newfoundland and Labrador.”</p> <p>Nova Scotia and Newfoundland and Labrador have until November to clear regulatory hurdles before proceeding. The agreement is subject to approval by the boards of directors for Emera and Nalcor Energy, Newfoundland’s Crown utility.</p> <p>A compensation package must also be approved by Ottawa and ratified by the Innu people of Labrador</p> <p>Under the conditions of the term sheet to develop the project, Nalcor Energy would spend $2.9 billion to build a power generating facility at Muskrat Falls capable of producing 824 megawatts of electricity.</p> <p>A transmission link from Labrador to Newfoundland would cost $2.1 billion, $600 million of which would be provided by Emera. That link would span 1,100 kilometres, including a 30-km subsea connection across the Strait of Bell Isle.</p> <p>A 180-km subsea link between Cape Ray, N.L., to Lingan, N.S., would cost $1.2 billion, all funded by Emera.</p> <p>Under the agreement, Nova Scotia would receive 170 megawatts of energy annually – about eight to 10 per cent of the province’s total power needs – for 35 years.</p> <p>Emera would also have an option on an additional 330 megawatts that could go to other provinces and New England.</p> <p>The federal Conservatives, Liberals and NDP have made election promises to provide financial support for the Lower Churchill project. That has generated scorn from the Quebec legislature, which unanimously passed a motion earlier this month criticizing the parties after those promises were made.</p> <p>Nova Scotia and Newfoundland and Labrador have made a joint request to Ottawa for a $375-million loan guarantee to help build the subsea power cable connecting the two provinces.</p>