Event12 December 2024Document

Hydro-Québec and NL Hydro sign a largely non-binding memorandum of understanding on Churchill Falls and Gull Island

On 12 December 2024, Newfoundland and Labrador Hydro and Hydro-Québec signed a memorandum of understanding setting out principles for replacing the 1969 Churchill Falls power contract and developing new generation, including a Gull Island station of about 2,250 MW to be held 60% by NL Hydro and 40% by Hydro-Québec. Under the MOU, new Churchill Falls power purchase agreements would run from 1 January 2025 to 31 December 2075; NL Hydro would ultimately have access to 1,990 MW; payments by Hydro-Québec to CF(L)Co for the existing Churchill Falls volumes had a forecast net present value of $33.8 billion (at a 5.822% discount rate, valued at 31 December 2024); and cost-plus pricing for the new capacity was projected to deliver a 2% annual escalation of revenues. Apart from specified sections, the MOU states that nothing in it is legally binding; the parties committed to negotiate definitive agreements, and the MOU was to terminate on 30 April 2026 unless extended. Hydro-Québec said the agreement in principle was non-binding and would give Quebec 7,200 MW of the 9,190 MW to be generated, with 1,990 MW going to NL Hydro.

Date: 12 December 2024
Kind: Agreement
Where: Newfoundland and Labrador
Evidence: Document: An official document: a bill, a filing, an agreement text. How evidence is weighed
Who: Hydro-Québec (signed); Newfoundland and Labrador Hydro (signed)

Sources

Newfoundland and Labrador Hydro / Hydro-Québec, “Memorandum of Understanding for a New Long-Term Energy Purchase and Development Initiative between Newfoundland and Labrador Hydro and Hydro-Québec (12 December 2024)” (external site), 12 December 2024. archived copy source record
Hydro-Québec, “An important step towards securing Quebec's energy future” (external site), 12 December 2024. source record
Hydro-Québec, “Protocole d'entente relatif à une nouvelle initiative d'achat et de développement d'énergie à long terme entre Newfoundland and Labrador Hydro et Hydro-Québec (12 décembre 2024)” (external site), 12 December 2024. source record

Laws and agreements

Memorandum of Understanding for a New Long-Term Energy Purchase and Development Initiative between Newfoundland and Labrador Hydro and Hydro-Québec (Churchill Falls MOU 2024-12-12): this event is its “Announced” stage

Projects

Churchill Falls upgrades / Gull Island

Claims that rest on this event

SupportsMechanism
The Churchill Falls and Gull Island deal complicates the thesis. It began before the tariffs (negotiating mandates in 2023-24, a memorandum of understanding on December 12, 2024). In the tariff era it got bigger and politically safer (C$10 billion in federal financing, a referendum dropped) but not faster: every milestone slipped. The August 2026 agreement sets terms for binding contracts due by the end of 2026, and it adds no new power line to the US.
Pre-tariff MOU.

How it bears on the outcome

Explanation	Fit	Why
O0 No meaningful speed-up	Neutral weak	A largely non-binding December 2024 MOU that predates the tariffs; most of the power goes to Quebec, and nothing about pace after the pressure or US volumes is observed.
O1 Faster, but the extra output goes mostly elsewhere	Neutral weak	A largely non-binding December 2024 MOU that predates the tariffs; most of the power goes to Quebec, and nothing about pace after the pressure or US volumes is observed.
O2 Faster, and more volume reaches the US (this level or higher)	Neutral weak	A largely non-binding December 2024 MOU that predates the tariffs; most of the power goes to Quebec, and nothing about pace after the pressure or US volumes is observed.
O3 Locked-in preferential terms for the US	Neutral weak	A largely non-binding December 2024 MOU that predates the tariffs; most of the power goes to Quebec, and nothing about pace after the pressure or US volumes is observed.