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A Hydro-Québec office in Quebec CityJacques Boissinot

Newfoundland and Labrador is launching a new court challenge to the controversial 40-year-old contract to supply electricity to Hydro-Québec from its Churchill Falls facility.

After unsuccessful attempts to reach a negotiated settlement with Hydro-Québec over what it claims is an unfair contract to supply electricity at ridiculously cheap rates, Newfoundland and its public energy company Nalcor Energy are asking Quebec Superior Court to rule on the matter.

Nalcor chief executive officer Ed Martin is to explain the latest move in Newfoundland's battle seeking redress at a press conference Tuesday afternoon.

Late last year, Newfoundland Premier Danny Williams said in the provincial legislature that Hydro-Québec's profit from the Churchill Falls contract in 2008 was $1.7-billion, compared with $63-million for his province.

"Power which is bought from out of the province for a quarter of a cent per kilowatt hour is then resold by Hydro-Québec for up to 36 times the price they pay for it," he said in a statement.

Newfoundland has tried several previous court challenges and the matter reached the Supreme Court of Canada on two separate occasions, without success; Newfoundland recently tried but failed to renegotiate the contract on an out-of-court basis with Hydro-Québec.

Now, the province is once again attempting a legal challenge, on the basis of a 1994 change to Quebec's civil code requiring all parties to a contract to act in good faith, not only in the negotiation and signing of the agreement but throughout the lifetime of the deal.

The initial agreement was signed in 1969 between the respective governments of Joey Smallwood and Jean Lesage.

In a separate matter, Nalcor has argued before Quebec's energy board that Hydro-Québec is blocking access to its transmission lines. Nalcor wants to secure transmission lines for export purposes on Hydro-Québec's grid, sending power through it from its new hydroelectric project downstream from Churchill Falls - Lower Churchill

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