Hydro-Qubec suing over Churchill Falls contract rights

Hydro-Qubec is going to court over its rights under the Churchill Falls power deal, saying recent positions taken by CF(L)Co are "ill-founded."

The hydro company is seeking a judgment from the Quebec Superior Court, which it says has exclusive jurisdiction on contract disputes.

In a press release, Hydro-Qubec says the 1969 Churchill Falls power deal gives the company "certain essential rights."

Thoseinclude the exclusive right to purchase virtually all of the power produced by the generating station until 2041, and the right to benefit from "operational flexibility."

But Hydro-Qubec claims recent positions taken by CF(L)Co, which operates the facility, will deprive them of that flexibility, by forcing the company to take only fixed monthly blocks of energy from 2016 onwards.

Hydro-Qubec wantsthecourt to confirm that its requests for energy wont be constrained to those fixed monthly blocks.

As well, Hydro-Qubec wants the court to block sales of Churchill Falls power of more than 300 megawatts to third parties, including Newfoundland and Labrador Hydro.

Ed Martin, CEO of Newfoundland and Labradors Crown-owned Nalcor Energy, said late Monday afternoon that he just became aware of the court action.

"I've really got to find out what they're saying," Martin told reporters at an unrelated briefing on the Nova Scotia regulators review of the Maritime Link for the Muskrat Falls hydro project.

"I have no idea... I really don't know what the content is at this moment."

CF(L)Co, which runs the Churchill Falls power plant, is a subsidiary of Newfoundland and Labrador Hydro. It is 65.8 per cent owned by parent company Nalcor, and 34.2 per cent by Hydro-Qubec.