Our jobs. Our money. Our power.
This is a significant milestone for Newfoundland and Labrador. Our province will realize more than $225 Billion in revenue over the life of the agreements. We will have access to nearly four times the electricity we have today to support jobs, economic growth and industrial development in Labrador. We will realize the construction of Gull Island without financial risks.
What this means for Newfoundlanders and Labradorians
A transformative milestone, freeing us from the 1969 deal.
- More than $225 Billion to the province over the life of the new agreements.
- 17 years of increased benefits starting now—not in 2041—on average $1 Billion per year, every year.
- Churchill River capacity increased from 5,400 MW to 9,190 MW to be sold at escalating prices.
- Respect for existing agreements with Indigenous communities in Labrador.
- Development of Gull Island with no financial risks for the province.
- Creating thousands of jobs and billions in economic benefit here at home.
An historic agreement
Newfoundland and Labrador and Québec have signed an historic Memorandum of Understanding (MOU) to replace the 1969 Upper Churchill contract and pursue new projects on the Churchill River to nearly double its capacity, from 5,400 MW to 9,190 MW.
Economic opportunity now
With this new plan, the Churchill River’s untapped potential will be fully realized. We’re creating thousands of new jobs, enabling industrial growth and unlocking economic opportunities that will benefit Newfoundlanders and Labradorians for generations to come.
Respect for Indigenous communities
The new deal emphasizes our meaningful commitment to work with Indigenous communities and continue to build respectful relationships. In particular, we are grateful for the ongoing dialogue with Innu Nation and their people who have secured their special relationship through the New Dawn agreement.
Fair value for our energy
The new agreement means an immediate increase in the price for Upper Churchill Power, increasing annual revenue to $1 Billion per year compared to the average of $20 million per year received today. The new agreement includes a price escalator, with the price for power growing based on market-based pricing.
More power
This agreement will have a generational impact on the growth and prosperity of Newfoundland and Labrador. We will have access to nearly four times the electricity we do today to support industrial growth in Labrador, and realize the development of Gull Island without the financial and construction risks.
Forecast Average Price
Churchill Falls PPA (existing generation)
The actual nominal price paid for the existing Churchill Falls power is forecast to increase over the life of the Power Purchase Agreement (PPA), starting at 1.63 cents per kilowatt hour retroactive to January 1, 2025, and increasing to 7.84 cents in 2041, 19.40 cents in 2056 and more than 37 cents by 2075.
Watch a video explaining how forecast average pricing works.
Watch a video explaining how forecast average pricing works.
Watch a video explaining how forecast average pricing works.
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Frequently Asked Questions
What does this deal mean for the people of Newfoundland and Labrador?
- More jobs: Thousands of construction jobs will be created, along with new employment opportunities related to industrial development in Labrador.
- More flexibility: The increased revenue will support things like healthcare, education, infrastructure, and help manage public debt.
- More power: New industrial development in Labrador will further boost our economy and create a more prosperous future for our province.
What are the key benefits of the new hydroelectric deal for Newfoundland and Labrador?
This new deal terminates and replaces a 50-year-old contract, securing significant financial benefits and future opportunities for our province. It delivers:
- Money: An immediate boost in annual revenue from Churchill Falls, averaging $1 billion per year over the first 17 years and increasing every year after that – a substantial increase from the previous average of $20 million a year. Together with the new developments, this equates to approximately $225 billion in total revenue over the life of the agreements.
- Growth: The deal unlocks access to more electricity, attracting new industries to Labrador and creating jobs across the province. Over $33 billion in construction projects are anticipated, generating thousands of jobs and further economic benefits.
- Development: Quebec will pay Newfoundland and Labrador $3.5 billion (in today’s dollars) for the right to co-develop Labrador projects, absorbing the financial risks and potential cost overruns.
What's different from the 1969 Upper Churchill contract?
The old contract locked us into a fixed low price for our electricity. This new agreement:
- Increases the Price of Power: The price paid by Hydro-Québec for Churchill Falls power will increase from 0.2 cents to an effective price of 5.9 cents per kilowatt-hour — thirty times the current price. Prices paid throughout the agreement will continue to rise with market prices.
- Unlocks Early Revenue: We gain seventeen years of revenue that would not have been realized if we let the old deal run its course. If we do nothing, we gain nothing until 2041.
- Lessons Learned from 1969 Applied to New Developments: Gull Island power purchase agreement covers all costs to develop, construct, operate, and maintain the facility including a return on equity ranging between 8-9%, set every five years. The price paid for Gull Island power is also projected to increase at 2% annually.
How does Newfoundland and Labrador benefit on average a billion dollars a year?
There are two ways that the value is being expressed and both are accurate.
- Over the first 17 years, which is the remaining time in the existing contract, the province would receive $17 billion from dividends, water rentals, and royalties from the existing Churchill Falls plant. In 2025 this is approximately $0.4 billion, and by 2041 it approaches $2 billion. This averages $1 billion per year.
- For year one (2025), the province would receive approximately $1 billion. That is made up of two aspects: approximately $0.5 billion from the option payment for Gull Island, and approximately $0.4 billion from dividends, water rentals, and royalties from the new Power Purchase Agreement (PPA) for the existing Churchill Falls plant. The dividends will increase over the duration of the PPA.
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What Others Are Saying
“The Memorandum of Understanding provides for substantial amounts of additional power for Newfoundland and Labrador that should lead to business growth and additional infrastructure development.”
Charlene Johnson
CEO, Energy NL
“We are encouraged that the new MOU addresses key business parameters like risk and cost escalators. We look forward to these objectives being realized in definitive agreements to protect benefits for Newfoundlanders and Labradorians for decades to come.”
Fortis Inc.
“The additional energy in Labrador is essential for advancing and expanding mining projects, fostering a robust critical mineral supply chain. Our members are eager to leverage this opportunity to enhance infrastructure and transmission capacity, facilitating the growth of industrial mining projects.”
Amanda McCallum
Executive Director, Mining Industry NL
