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12.02.2020

There’s always a simple explanation.

In a lot of ways, Monday’s announcement about rate mitigation and the Muskrat Falls project was mostly an agreement between the federal and provincial governments to change the project’s financing so that we’ll pay for it based on the actual cost of the power, rather than artificially lowering prices through a supply pricing approach.

What does that mean?

Well, the simplest way to explain it is that the old method was a buy-now-pay-later method. Electricity prices would start artificially lower and climb regularly into the future, while the cost of service method the government will now use is more like a traditional mortgage or loan: more expensive to start, but cheaper as we pay off the debt and interest we’ve incurred. It’s also an easier model for the........

© The Guardian