At 5,428 MW, it is the sixteenth largest in the world, and the second-largest in Canada, after the Robert-Bourassa generating station in northwestern Quebec.

The scheme would use the natural capacity of the drainage basin, which covers over 23,300 sq mi (60,000 km2), eliminating the need for the construction of dams.

These findings were confirmed in a 1947 survey, but development did not proceed due to the remoteness of the site and the distance from markets for the power.

In 1963, a 225 MW generating station was built at Twin Falls to supply power to iron mining industries in western Labrador.

Controversy over the location of the international border on the Labrador Peninsula added to the difficulties of negotiating between Newfoundland and Quebec.

The Judicial Committee of the Privy Council in the United Kingdom ruled in favour of the Dominion of Newfoundland in 1927,[5] an unpopular judgment in Quebec.

Certain newspapers called for a takeover of the territory,[7] In 1953, the British Newfoundland Development Corporation (BRINCO) was formed[8] for the purpose of exploiting Labrador's resources.

In 1963, Quebec nationalized all of its hydro-electric facilities, and proposed to Newfoundland that it do the same with the Hamilton Falls project, which Premier Joey Smallwood refused.

At the time BRINCO was praised for having built the station with no public money from Newfoundland, while Hydro-Québec assumed nearly all the financial risk.

Studies showed this drainage area collected 410 mm (16 in) of rainfall plus 391 cm (154 in) of snowfall annually equalling 12.5 cu mi (52 km3) of water per year; more than enough to meet the project's needs.

Water is contained by a reservoir created not by a single large dam, but by a series of 88 dikes that have a total length of 64 km (40 mi).

Events unforeseen at the time of the 1969 negotiation have greatly increased Hydro-Quebec's profit margin on the fixed price of energy from the station.

[16] The Churchill Falls hydroelectric plant development was undertaken in the absence of any agreement with the Innu people, but has resulted in significant[clarification needed] damage to their traditional territory.

The plant caused flooding of over 5,000 km2 (1,900 sq mi), which damaged the habitats of many[quantify] animals, disrupted caribou migratory routes, and drowned wildlife such as beavers.

[17] In February 2010, the Government of Newfoundland and Labrador and the Innu Nation initialed an agreement to compensate for the negative impacts of the Churchill Falls plant.

The agreement offered the Labrador Innu hunting rights within 34,000 km2 (13,000 sq mi) of land, plus $2 million (CAD) annually in compensation from Nalcor Energy.

[22] The timing of this lawsuit comes as the Innu Nation seeks to formalise a land claims agreement with the Government of Canada.