Muskrat Falls rate-mitigation deal to likely miss Sept. 30 deadline, says N.L. government

The finalization of a deal to stave off imminent surges in power bills in Newfoundland is taking longer than expected, the provincial government confirmed Monday.

When the $5.2-billionagreement-in-principle between the federal government and Newfoundland and Labrador was announcedJuly 28, government officials said they hoped to have the deal finalized by the end of September.

But it now seems unlikely the deal will be completed by Thursday.

"Work is continuing on the definitive agreements. Things are progressing;however, it appears it may take a little longer," says a statement from theDepartment of Industry, Energy and Technology sent to CBC News on Monday.

"The deadline was intended to ensure people continued to work diligently. The fact it will likely pass does not affect the work and the conclusion of the definitive agreements."

Sharp hikes to electricity bills for the island part of the province, as a consequence of the overbudget and behind-schedule Muskrat Falls project, haveloomed over the province for years.

In July, Prime Minister JustinTrudeau said the deal would "ensure financial sustainability of the project, while protecting people from major electricity increases."

Innu court injunction application

After the agreementwas announced, the InnuNationinitiated a court action seeking an injunction on talks to finalize it.

The Innu Nation signed animpact benefits agreement with Muskrat Falls operator Nalcorin exchange for their consent to develop the hydroelectric dam on traditional Innu land.

In a statement of claim filed in court, the InnuNationsays it wasnot consulted on the rate mitigation agreement, and says the deal will dramatically reduce the benefits the Innureceive from Muskrat Falls.

The Innu Nation's lawsuit argues the federal and provincial governments have a duty to consult with them on any rate-mitigation deal. It also seeks damages for any money lost because of the deal.

Newfoundland Supreme Court Justice Alexander MacDonaldsaid he would hand downa decision on the Innu applicationduring the week of Sept. 20.

But on Friday, the provincial, federal and Innu Nation governments issued a joint statement saying all three parties have "requested the court defer releasing a decision on the injunction application to provide an opportunity for discussions to take place."

The statement also said the parties will not be commenting further at this time.

No deal?

It's expected the Muskrat Falls project will be commissioned in late November. Without a deal,the cost of power for electricity ratepayersis expected to increasefrom 13 cents per kilowatt-hour to just under 23 cents.

Under the agreement-in-principle, rates wouldrise to 14.7 cents, about a 10 per cent increase.

Government officials anticipate furtherrate increases of about 2.25 per cent annually.

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