N.L., Ottawa agree to shield ratepayers from Muskrat Falls cost overruns

Newfoundland Premier Dwight Ball announces the terms of reference for the judicial inquiry into the Muskrat Falls hydroelectric project at the Confederation Building in St. John's on November 20, 2017. The premier of Newfoundland and Labrador will be in court today asking a judge to block media from reporting on documents linked to a St. John's murder case. They relate to the trial of Brandon Phillips in the death of 63-year-old Larry Wellman following a botched hotel robbery in October 2015. Premier Dwight Ball's daughter, Jade Ball, was in a former relationship with Phillips. THE CANADIAN PRESS/Paul Daly

Ottawa and Newfoundland and Labrador will rewrite the financial structure of the Muskrat Falls hydro project to shield ratepayers from paying for the megadam's cost overruns.

The agreement announced today by federal Natural Resources Minister Seamus O'Regan and Premier Dwight Ball will scrap the financial structure agreed upon in past federal-provincial loan guarantees, moving to a model aimed at redirecting equity returns to ratepayers.

Details of how exactly the project will be monetized over the next few decades to make up the gap in funds are still to be worked out.

The two governments will also work towards electrifying federal buildings to reduce an anticipated power surplus in the province.

Electricity rates have been forecast to skyrocket in Newfoundland and Labrador when the over-budget Muskrat Falls dam comes fully online in 2021.

Ball has said the issue is a top priority for his government and has pledged to keep rates near existing levels, but talks with Ottawa dragged on for months.