Newfoundland and Labrador Hydro raises cost of 1,100-km transmission line

Newfoundland and Labrador Hydro increased the total projected cost to complete the province's portion of the 1,100-kilometer Labrador-Island Link high-voltage direct-current transmission line connecting the 824-MW Muskrat Falls hydroelectric project to the island of Newfoundland.

Citing the current timeline of the project, Newfoundland and Labrador Hydro said the carrying costs of the Labrador-Island Link increased by C$256 million, raising the forecast total project cost of C$13.11 billion, reported in September 2020, to C$13.37 billion. The facilities capital cost of C$10.18 billion remains the same as the September 2020 update, the company said.

"For this cost update, Hydro will not require any equity from the Province. The amount will be covered through internal funding sources and will be considered as part of the overall rate mitigation plan," the company said in a June 17 news release.

In February, the Canadian government, the government of Newfoundland and Labrador, and Newfoundland and Labrador Hydro signed term sheets for a C$1 billion federal loan guarantee and capital restructuring for the Muskrat Falls hydroelectric project. The agreement also includes a C$1 billion investment by Canada in the province's portion of the Labrador-Island Link project.

In early June, Newfoundland and Labrador Hydro filed an application for a July 1, 2022, utility rate adjustment as part of a yearly requirement to file an application with the provincial Board of Commissioners of Public Utilities related to the rate stabilization plan. The filing noted that there is no expected increase in customers' electricity rates in July as a result of the application.

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