ST. JOHN'S, N.L. - The cost of building the Muskrat Falls hydroelectric project in Labrador has risen by nearly $800 million for Nalcor Energy with the price tag now forecast at just under $7 billion.
Despite the higher capital cost of the project, Nalcor president Ed Martin says it is still the right long-term energy supply for Newfoundland and Labrador.
The Crown-owned company is blaming the increase on higher construction costs because of competition in the industry, and additional spending to improve the system's reliability and operation.
The joint project with Nova Scotia utility Emera (TSX:EMA) would bring power from Muskrat Falls to the island of Newfoundland and on to Nova Scotia through a complex system of overland transmission and subsea cables.
Nalcor's share of the project was $6.2 billion, but is now estimated at $6.99 billion.
The total cost estimate for the project now stands at about $8.5 billion, with Emera spending $1.5 billion on the subsea cable between the two provinces.
Martin said over the life of Muskrat Falls, it will bring in more than $30 billion in revenue.
"This will provide a substantial benefit for all Newfoundlanders and Labradorians," Martin said in a news release.
Martin has previously said the goal of providing power from the project by 2017 could also be delayed.