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Linemen replace blown transformers as they attempt to return power to residential customers in St.John's on Jan. 6, 2014.PAUL DALY/The Canadian Press

Rolling blackouts in storm-battered Newfoundland have reignited a bitter debate over the provincial government's handling of its aging energy infrastructure and its future reliance on the Muskrat Falls hydroelectric megaproject in Labrador.

The blackouts started amid blizzard conditions on the weekend and then plunged more than 100,000 customers around St. John's into darkness Sunday when the oil-fired Holyrood power station shut down. The failure has put renewed focus on Newfoundland and Labrador Hydro's management of the plant since it gave final approval in late 2012 to the controversial $7.7-billion Muskrat Falls project.

The government-owned utility eliminated some planned capital projects last year at the aging Holyrood generating plant and critics contend its parent company, Nalcor Inc., has been unduly focused on the future megaproject to the detriment of the existing system.

The utility was still determining what caused the fault that set off the outage at Holyrood, but Nalcor chief executive Ed Martin said the facility was properly maintained and that the cancelled projects would have had no impact on its operating ability.

All told, Newfoundland and Labrador Hydro has doubled its capital spending to $100-million in the coming years to maintain the reliability of its generating stations and its transmission lines as the province's power demand hits new peaks.

"We are really on top of this thing," he said, adding however, that no system can be 100-per-cent reliable.

Opposition leaders in the province said Premier Kathy Dunderdale should call a full public inquiry into the state of the system and its reliability. But Mr. Martin said Newfoundland and Labrador Hydro has recently conducted a full review of its assets and has a plan to modernize the system. He added that the utility regularly faces a battle from customers who are reluctant to see the higher spending passed through to power rates.

Newfoundland and Labrador Hydro, and the local distributor, Newfoundland Power, restored services to all but a few hundred customers by late Monday.

The island's blackouts came just two weeks after hundreds of thousands of customers in Southern Ontario, Quebec and New Brunswick lost electricity in a pre-Christmas ice storm.

Utilities across Canada have battled a rash of extreme weather events – from severe flooding in Calgary last summer, to ice storms in Southern Ontario, to bitterly cold temperatures on the Prairies. And they face an increasingly difficult tradeoff between spending huge sums to reduce the grid's vulnerability and keeping costs down to their customers, even as scientists predict more problems due to climate change.

Ms. Dunderdale insisted there was no reason for Newfoundlanders to lose confidence in the island's electricity system. But she pointed to the blackout to buttress the case for Muskrat Falls, which won't be operational until 2017.

Critics contend Nalcor has placed too much faith in Muskrat Falls, which will feature a 1,400-kilometre transmission line to provide power to St. John's.

"My sense is that there has been a focus on Muskrat Falls to the exclusion of some of the more immediate issues," said David Vardy, former head of the province's Public Utilities Commission and a vocal critic of the Labrador megaproject. "They rationalized not spending a lot of money on Holyrood in the last few years in light of the fact that it is going to be phased out when Muskrat Falls comes on."

He said power customers will be at the mercy of a 1,400-km transmission line that will be vulnerable to ice storms and high winds.

The island of Newfoundland is not connected to the rest of the North American grid, so it can't import electricity from another province when its key generating station goes down, as a province such as Ontario or Alberta can do. The Muskrat Falls project will connect the island to Labrador, the site of an existing dam on the Upper Churchill River and the planned one on the Lower Churchill, as well as to Nova Scotia through an underwater cable.

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