50 years of Churchill Falls: Marking a reluctant milestone

Monday marks a milestone for the province's energy industry: 50 years since the activation of the Churchill Falls hydroelectric plant.

One of the largest engineering projects in Canadian history, Churchill Falls was completed 18 months ahead of schedule, producing its first power on the evening of Dec. 6, 1971.

As one of the largest underground power generating projects in the world, the Churchill Falls site produces 34 terawatt hours of energy per year — roughly one per cent of the world's hydroelectric power, according to Nalcor's website.

The project officially went online in June 1972. During a commemorative ceremony, the project's chief proponent, and the province's inaugural premier, Joey Smallwood, said "This is our land, this is our river, and we will forever make sure that it will operate primarily, chiefly and mainly for the benefit of the people of Newfoundland."

The project provides Hydro-Quebec with about 13 per cent of its power.

The $1-billion deal struck between the province and Quebec's national energy company, which sees it drawing energy at a cost of less than half a cent per kilowatt-hour, has been a source of contention between the two provinces since it was signed in 1969.

At the time, three mills — or three tenths of a cent — was the going price for hydroelectricity. 

But when that price surged in the early 1970s, so did Hydro-Quebec's profits, prompting then-premier Frank Moores to claim the project was "the biggest giveaway in history."

Attempts to renegotiate the terms of the 65-year contract since then have proven fruitless.

After a 1980 decision ruled the contract could not be broken before 2041, then-premier Brian Peckford said, "it is not a very nice day for anyone in this province."

Another attempt to change the contract's terms in 1988 failed.

In the late-1990s, then-Premier Brian Tobin proclaimed, "There is no scenario under which Newfoundland will subsidize the province of Quebec for the next 40 years," before subsequently having his court challenge fail.

In a first for Newfoundland and Labrador, Quebec's court of appeal ruled in 2019 that the Churchill Falls Corporation, of which Newfoundland and Labrador Hydro is a stakeholder, had a right to sell energy above a certain threshold.

The decision resulted in a $25-million payout to Newfoundland and Labrador.