North America's "largest clean energy deal" would push 985 MW of Canadian hydro into the US grid

Newfoundland and Labrador and Quebec have struck a new agreement over Churchill Falls, effectively ending a contract that has rankled in the province since 1969. Canadian Prime Minister Mark Carney announced it in St. John's on August 17. He stood on the harbourfront with N.L. Premier Tony Wakeham and Quebec Premier Christine Fréchette.

Essentially, it is a tentative agreement intended to terminate and replace the 1969 contract between Hydro-Québec and Newfoundland and Labrador Hydro, which terminates and replaces the 1969 contract along with the memorandum of understanding the two provinces signed in December 2024. Ottawa is contributing up to $10 billion in financing. Roughly half of that amount will be directed to Newfoundland and Labrador.

The money is meant to upgrade Churchill Falls, develop a 2,700 MW Gull Island hydroelectric project and build associated transmission. Also, there will be a 2,000 MW onshore wind development program in which the federal government would take up to 40 per cent equity, with the Innu of Labrador as co-investors. Ottawa values the full construction program at close to $70 billion and forecasts 14,000 MW of capacity, 23,000 construction jobs and $31 billion in GDP through the early 2040s. The Globe and Mail reported the utilities' own project slate at more than $50 billion.

On price, Hydro-Québec would pay 1.8 cents per kilowatt hour beginning in 2027. This is expected to climb until 2077 to an effective average of 7.4 cents. THe province of Newfoundland and Labrador also secures 985 MW of transmission access through Quebec. However, the separate expansion of Churchill Falls has been dropped from the agreement — leaving only a feasibility study.

Opposition leaders John Hogan and Jim Dinn say they are still working through the details. A provincial review concluded in the spring that the earlier MOU was not in the public interest — Wakeham had even promised voters a referendum on it.