Lower Churchill to undergo environmental review: feds

A proposed Labrador-based hydroelectric megaproject that has been touted as a solution to Ontario's energy crunch will be studied by an independent panel, federal Environment Minister John Baird said Tuesday.

In a statement, Baird said the Lower Churchill hydro project will go before a Canadian Environmental Assessment Agencyreview panel that will operate without government direction.

"A review panel, independent of government, will provide the best opportunities for the participation of the public and aboriginal groups in the environmental assessment process," said Baird.

The decision marks a milestone in the development process of the Lower Churchill megaproject. Newfoundland and Labrador Hydro intends to generate power from two sites on the Churchill River, with a combined output of about 2,800 megawatts.

Baird said there is a possibility that the federal review will be done jointly with a provincial government assessment.

Baird said announcements will be made shortly on how groups and individuals will be able to participate in the review process.

Loyola Hearn, Newfoundland and Labrador's federal cabinet representative, touted Baird's announcement as an indication "of how our government is getting things done for Newfoundlanders and Labradorians."

Relations between the federal and provincial governments have been strained for months, largely because Premier Danny Williams has accused Prime Minister Stephen Harper of breaking a 2006 campaign promise to exclude non-renewable resources such as offshore oil revenues from the federal equalization formula.

Williams, a Progressive Conservative, has called on voters to boycott the federal Conservative party in the next election.

The Newfoundland and Labrador government announced last year it would proceed with developing the Lower Churchill project on its own, after reviewing bids that included a joint Ontario-Quebec offer.

The Ontario government has openly expressed interest in obtaining clean power from the Lower Churchill to meet its growing needs, particularly as it winds down itsdependence on coal generators.

Moving the power to market, though, will be a complicated matter.

Newfoundland and Labrador would like to obtain Quebec's permission to transfer electricity across its lines, but is already exploring other means of tapping into the North American grid.

The Lower Churchill project involves two sites.

At Gull Island, about 225 kilometres downstream from the existing Upper Churchill hydroelectric station which generates more than 5,400 megawatts of power Newfoundland and Labrador Hydro plans to build a 2,000-megawatt station. A much smaller station, of about 800 megawatts, is proposed about 60 kilometres away, at Muskrat Falls.