CANADA

New York blackout

Cuomo cancels a contract with Hydro Quebec

BARRY CAME April 6 1992
CANADA

New York blackout

Cuomo cancels a contract with Hydro Quebec

BARRY CAME April 6 1992

New York blackout

Cuomo cancels a contract with Hydro Quebec

Cree Chief Billy Diamond was thinking of geese when he heard the news. He had just set off on the nine-hour drive from Val-d’Or in northern Quebec to his Waskaganish home on the shores of James Bay, where preparations are well advanced for the annual event that heralds the northern spring—the goose hunt. “I turned on the car radio to see if I could get a weather forecast,” Diamond, 42, recalled. “What do I hear instead but a surprising announcement from New York. I almost drove off the road.” What startled the Cree chief, chairman of one of five committees currently examining the environmental impact of the proposed Great Whale River hydroelectric project, was last week’s decision by New York Gov. Mario Cuomo to cancel a $ 17-billion contract to purchase Quebec power. Said Diamond: “As soon as I heard that, I knew that the Great Whale project, maybe even the whole James Bay development, had been knocked into a tailspin.”

Cuomo’s announcement dealt a damaging— perhaps even fatal—blow to Hydro Quebec’s $ 13-billion plan to harness the immense power of the Great Whale River, which flows into Hudson Bay 1,000 km northwest of Montreal. In backing out of a deal that he had signed in 1989, the governor threw into doubt both the immediate economic viability of the 3,168megawatt project and the need for it, at least until the beginning of the next century.

Hydro Quebec officials attempted last week to play down the impact of the New York governor’s announcement. “There will be no

delay whatsoever in the construction,” said Pierre Bolduc, a vice-president of the provincially owned utility. But native leaders and environmentalists, two groups that have strenuously resisted the proposed complex of dams and generating stations, celebrated what they claimed was the imminent demise of the controversial megaproject. “I doubt very much that the project will go ahead now,” said Mat-

thew Coon-Come, grand chief of Quebec’s Grand Council of Crees. “Hydro Quebec needs the American dollars, the American investment and the American contracts to proceed.” According to Cuomo, New York state no longer requires the 1,000 megawatts of power it had planned to buy over a 20-year period beginning in 1995. “We do not need new

electricity-generating capacity until after the turn of the century,” the governor said. Cuomo added that conservation measures had reduced the demand for electricity, while independent power companies in the state had increased the supply. As a result, local wholesale prices for electricity have fallen sharply—to the point, Cuomo said, that Hydro Quebec's price, averaging 10.3 cents a kilowatt-hour over the life of the contract, was “no longer competitive. ” The state-owned New York Power Authority had asked the Quebec utility for a 30-percent price reduction, but Hydro Quebec refused. “Our natural resources are not something to be given away,”

declared Quebec Energy Minister Lise Bacon. Bacon insisted that the breakdown in negotiations amounted to a “suspension in the talks” rather than a permanent cancellation of the contract. And both Cuomo and Power Authority chairman Richard Flynn left open the possibility that the state would purchase additional electricity from Quebec in the future if, as Cuomo put it, “the cost is competitive, the need exists and the appropriate environmental reviews for any new facilities have been conducted.” Hydro Quebec officials, meanwhile, said that the utility still needs to satisfy projected increases in domestic demand as well as a separate deal with New York to provide up to 800 megawatts of power between 1999 and 2018 and a 30-year, 340-megawatt contract with Vermont that runs to the end of 2020. For all of those reasons, Bolduc insisted that Great Whale must proceed. He added: “It’s not the

end of a dream or a plan.” But even before Cuomo’s announcement last week, it was clear that New York officials were uneasy about the project. Two weeks ago, state legislators voted overwhelmingly to conduct an independent environmental review of Hydro Quebec’s plan. By coincidence, the sponsor of that motion, state Assemblyman William Hoyt, suffered a heart attack and died suddenly on the assembly floor last week—a factor that appeared to influence the timing of Cuomo’s decision.

Hoyt’s death was widely mourned by Cree leaders, many of whom—including CoonCome—planned to attend his funeral in Buffalo, N.Y., last weekend. “We lost a good friend,” Diamond said. “He would have been gratified to see what he helped to accomplish.”

BARRY CAME

in Montreal