Panel gives green light to NB Power deal

NEW BRUNSWICK - A provincially appointed panel gave the green light to a controversial deal to sell major NB Power assets to Hydro-Quebec.

The panel was appointed last November by New Brunswick Premier Shawn Graham to provide independent advice on the $3.2-billion deal that would see Hydro-Quebec acquire most of NB Power's generating stations, its hydro dams and its diesel and nuclear generating plants. Quebec would also obtain transmission rights to send power to New England markets.

The six-person panel, chaired by David Ganong, noted in its report that the deal would be good for the province for many reasons, notably because it would ensure lower electricity rates for New Brunswick.

The panel's analysis noted that residential, commercial, and municipal utilities would see their rates go down by six per cent during the first 10 years and by 13 per cent by 2030. During the same period industrial customers would see their electricity bill slashed by 20 per cent during the first 10 years and by 23 per cent by 2030. This represents savings of $3.4 billion for residential customers and $1.6 billion for industrial customers.

"The savings would result from a guaranteed electricity supply from Hydro-Quebec with price increases controlled by a known formula rather than the business as usual conditions," the report noted.

The panel asserted the purchase price offered by Hydro-Quebec is fair and that the deal would mitigate financial risks related to current and future debt of the province.

The group also stressed the deal would allow New Brunswick to maintain ownership of the province's transmission and distribution capacity and continue to have policy and regulatory control over the electricity sector, a major sticking point since the original deal with Hydro-Quebec was announced last October.

But the panel also stressed that the New Brunswick government has to adopt a new energy policy whether the deal gets passed or not.

"Without taking on the obligation to set an economic development direction in the context of an integrated energy policy, this transaction would exist in a strategic vacuum," the report noted.

The report also points out the deal would position New Brunswick as a greener province by reducing environmental impacts from fossil-fuel generation.

The initial proposal was criticized by Newfoundland and Labrador Premier Danny Williams and Nova Scotia Premier Darrell Dexter, who both opposed the sale.

Williams said giving control of New Brunswick's energy corridor to Hydro-Quebec would enrich Quebec at the expense of the energy ambitions of Atlantic Canada.

While Dexter welcomed the new proposal, Williams still maintains it will give Quebec a stranglehold over power exports to energy-hungry markets in the northeastern United States.