Newfoundland and Labrador and Hydro-Québec have reached a nearly $25 million settlement over the Churchill Falls hydroelectric power contract.
The settlement — included in Newfoundland and Labrador Hydro's second quarter financial results Tuesday and first reported by All Newfoundland and Labrador — followed a 2019 court win that saw the Quebec Court of Appeal rule that the Churchill Falls Corporation has the right to sell energy produced above a certain threshold.
Newfoundland and Labrador Hydro is a majority shareholder of the Churchill Falls Corporation.
The 2019 decision meant the corporation should have made more money since 2016, and sparked nearly two years of negotiations.
The end result is that Hydro-Québec has agreed to pay the Churchill Falls Corporation a retroactive payment of almost $25 million. Hydro-Québec retains the right to sell Churchill Falls energy up to a monthly cap.
The initial contract was signed in 1969 and is still valid until 2041.
Hydro-Québec had successfully argued in court that the contract is valid because it assumed the costs and risks that came with the hydroelectric project when the contract was signed. The utility purchases a majority of the electricity generated by the central Labrador facility for less than market value.
Newfoundland and Labrador Hydro confirmed the settlement on Wednesday but isn't doing interviews, only saying the settlement contains commercially sensitive information and releasing it might upset Hydro-Québec.
Since the signing of the contract in 1969, and up until 2019, Hydro-Québec made profits of close to $28 billion compared to just $2 billion for Newfoundland and Labrador.
When the deal expires in 2041, full control of the hydroelectric project will be given to Churchill Falls Corporation.