N.L. government spent $462K assessing wind hydrogen proposals

The Newfoundland and Labrador government tapped three management consulting firms to help assess wind hydrogen proposals — to the tune of almost half a million dollars — which Energy Minister Andrew Parsons says was essential.

According to the public procurement agency, six bids — with a total value of $462,762  — were awarded to Optimus SBR Inc, Ernst & Young Orenda Corporate Finance Inc and Power Advisory LLC between March and July.

Parsons said the government advertised for technical services, financial advice and a fairness advisor, explaining they needed to bring on expertise because this was the first time the government had done a hydrogen strategy.

"We have to make sure that they, as a company, have the ability to pull off what they're proposing and that's why you need… some different and sharp eyes to have a look at that," Parsons told CBC News.

Toronto-based Optimus SBR Inc. was awarded a $43,700 contract in March for a "fairness service," which Parsons said was to ensure this was an open and transparent process.

Ernst & Young Orenda Corporate Finance Inc. ($269,062.50) and Power Advisory LLC ($150,000) were brought in to provide technical and financial analysis for the first and second bidding stages.

"We're talking about huge, huge collaborative efforts here. The other side is, there's no fiscal framework for this in the world. We basically had to come up with this from scratch."

Parsons also said these contracts address public concerns that the government didn't have the technical expertise to assess the proposals.

"I think we've satisfied them basically," he said.

Parsons said they didn't want people thinking this was a biased process so they brought on companies to help assess the bids. Allegations of a conflict of interest were raised last October when it was reported Premier Andrew Furey had visited John Risley's fishing lodge with his father. Risley, the Nova Scotia seafood magnate, is one of the leaders behind a wind hydrogen proposal on Newfoundland's west coast. The province's commissioner for legislative standards eventually ruled Furey had not placed himself in a conflict of interest.

"If we don't do this the right way in terms of all the different components, people aren't going to trust that," Parsons said. "People need to have trust in their institutions. People need to have trust in the processes we are undertaking and sometimes that requires going outside."

Last December the provincial government announced companies could bid on nearly 1.7 million hectares of Crown land in Newfoundland for potential wind hydrogen projects.

Parsons said the government was quick to put together bids for assessing that process.

Another concern that's been voiced from various organizations is how quickly the proposal process has moved. To this concern, Parsons replied, "There's such a thing as lost opportunity." He also pointed to neighbouring Nova Scotia, which is moving "at breakneck speed" as well as projects developing along the Eastern seaboard of the United States.