Hydro-Québec seeks control of N.B. corridor

NEW BRUNSWICK - Hydro-Québec has a strategic motive for its interest in NB Power, say people familiar with the industry.

Former New Brunswick energy minister Jeannot Volpe said Hydro-Québec may want to buy the utility so it can block sales of electricity to the United States by Newfoundland and Labrador from its Lower Churchill development.

The Newfoundland government wants to get electricity from that project into the U.S., he said, but it has not been able to arrange transmission through Quebec.

The only other route, Volpe said, is under the Gulf of St. Lawrence, then through Nova Scotia and New Brunswick and finally into Maine.

But if Hydro-Québec takes over NB Power, Volpe said, it can also block that route by throwing up obstacles to linking transmission lines.

"It would not be as easy for them to get what I would call for them a fair access," Volpe said.

Pierre-Olivier Pineau, a Montreal economist who has studied Hydro-Québec, said the U.S. is the utility's biggest market, so it naturally wants to make it difficult for Newfoundland and Labrador to sell power there.

"So, if you basically prevent a competitor, in this case Lower Churchill, to have access to the U.S., then that's perfect for Hydro-Québec because they're the only one to sell," Pineau said.

Nalcor Energy, formerly Newfoundland and Labrador Hydro, is proposing the development of two hydroelectric generating stations on the Lower Churchill River, located near Happy Valley-Goose Bay in Labrador.

This arrangement could be advantageous for New Brunswick residents, Volpe said, because selling NB Power for billions of dollars would lower the province's debt and may allow it to freeze power rates.

The downside, he said, is that New Brunswick would lose control over power generation.

Energy Minister Jack Keir did not rule out the sale of the provincial utility to Hydro-Québec.

"What I would say to you is everything is on the table at this point," Keir told reporters.

New Brunswick and Quebec have been talking for months about energy co-operation, he said.

Premier Shawn Graham had repeatedly promised that the sale of NB Power was off-limits for a Liberal government, including in the 2002 debates in the legislature and the 2006 election platform, Charter for Change.

"Our position is 'Look, this is an asset of the province and we want to keep it in the ownership of New Brunswickers,'" he said at that time.

NB Power has been owned by the province since 1920.

The union that represents the 2,200 NB Power workers said it's hard to ignore the talk about a possible sale.

"We want a seat at the table to be able to talk to government and say, you know, what are you doing to things related to the employment of the current workforce?" said Ross Galbraith, business manager of Local 37 of the International Brotherhood of Electrical Workers.

He said there were also concerns related to the pension and benefits the employees currently have and the terms and conditions of employment.

Galbraith said his workers want to know what will happen if there's a duplication of services and which jobs could be cut.