An independent review has found that the planned $6B Muskrat Falls hydroelectric project is the cheapest electricity supply option for the Canadian province of Newfoundland and Labrador.

The study, carried out by Navigant Consulting for project developer Nalcor Energy, validated the proposed development of the 824MW Muskrat Falls project and the Labrador-Island Link – together known as the Lower Churchill River clean energy projects – as the best option for the future energy supply of the island and provides the best value for electricity consumers.

The review finds that the project would a reliable source of energy, would significantly reduce GHG emissions, and would lead to a gradual decrease in average wholesale electricity rates for the province, the Canadian Press reported.

To date, the project has received endorsement from the Innu Nation and in August 2011 the Government of Canada and the Government of Newfoundland and Labrador signed a

Memorandum of Agreement for a loan guarantee. The Board of Commissioners of Public Utilities is also currently conducting a review of Muskrat Falls as the lowest-cost option for supplying power to the island.

A final decision on the project will be made in 2012 upon completion of commercial arrangements, confirmation of project cost and schedule and after the federal and provincial Environment Ministers make a final decision on the environmental assessment for the generation project.

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