Newfoundland and Labrador signed an historic Memorandum of Understanding on Thursday to terminate and replace the 1969 Upper Churchill Contract, develop Gull Island and expand the capacity of the Churchill Falls plant. The deal will result in more than $225 billion in total revenue for NL over the life of the agreements. 

The new deal will see an immediate increase in the price for Churchill Falls power. The non-binding MOU sets a framework for definitive agreements which will bring an average of $1 billion a year to the province between now and 2041, and escalating every year after. 

The effective price per kilowatt hour will change from 0.2 cents to 5.9 cents, it’s thirty times higher than the current price. 

The new agreeement includes a price escalator, with the price growing based on a market-based block pricing model over the life of the contract. 

New development projects in Labrador: 

Hydro Quebec will pay Newfoundland and Labrador $3.5 billion net present value for the right to co-develop new projects.

The Gull Island Generating station will be constructed along the Churchill River and will be installed with a capacity of 2,250 MW. Hydro-Quebec will act as the project lead for Gull Island, Quebec will be responsible for contruction risks and cost overruns on these new projects. 

The existing units at Churchill Falls will be upgraded to increase in capacity by 550 MW. New transmission lines will be built in Labrador and Quebec to allow for these new projects. 

A second facility will be constructed near the current Chuchill Falls site. The new facility will contribute 1,100MW of capacity. 

The combined ownership of all new developments is approximately 65% NL Hydro, amd 35% Hydro Quebec. 

Innu Nation Grand Chief Simon Pokue and Premier Furey signed an official acknowledgment of the MOU confirming the province’s committments to the Innu of Labrador. 

The agreement will come into effect on January 1, 2025.