New Brunswick open to adding more lines

NB Power-Hydro-Quebec Deal clarifies transmission access, energy policy, and power rates, while balancing renewable energy projects and wind farms with grid access to the northeastern U.S. market and potential partnerships for new transmission lines.

Even before Hydro-Quebec tentatively acquired NB Power, it turns out the Quebec government-owned utility was already taking up all the export capacity in NB Power’s transmission system, leaving no room for anyone else to export electricity to New England.

But New Brunswick Energy Minister Jack Keir says that doesn’t prevent Nova Scotia or Newfoundland or anyone else from building a transmission line across New Brunswick.

In a conference call with The Chronicle Herald’s editorial board, Keir was trying to clarify some details of the controversial memorandum of understanding and the amended deal on transmission that the New Brunswick government signed with Quebec.

There’s concern that Hydro-Quebec is putting one over on New Brunswick, in much the same way it got the best of Newfoundland decades ago in the Churchill Falls hydroelectric development in Labrador, a cautionary tale many recall today.

If the proposed deal goes ahead as planned at the end of March, the New Brunswick government will sell NB Power to Hydro-Quebec for $4.75 billion, with most of NB Power assets changing hands, which equals the amount of NB Power’s debt that the government is carrying on its books.

In addition, power rates for large users will immediately be reduced by 30 per cent, and a new mid-sized category of business will have its rates cut by somewhere between 17 and 25 per cent. And residential users will have their rates frozen for five years. The combined savings on industrial and residential power rates for New Brunswickers over five years is expected to amount to $5 billion.

The other Atlantic provinces have expressed concern about Hydro-Quebec hogging all the transmission space in New Brunswick, thus preventing them from competing with Quebec and its green export plans to sell electricity to the lucrative northeastern U.S. market.

The New Brunswick government says, however, that it is not opposed to even partnering with Nova Scotia Power to build a separate transmission line. But such a line would have to make business sense, Keir says.

Likewise, he says, the New Brunswick government is still "absolutely committed to green renewable opportunities" in New Brunswick, even though cheap hydroelectricity from Quebec makes it difficult for more costly green power projects to make the grade.

"As I’ve always said, the business case is going to have to work or folks are going to have to understand there is going to be an impact in a negative way to their electricity rates," Keir says. "You can’t have both."

Either the green power pays for itself, at a competitive price, or ratepayers will be asked to subsidize development of renewable energy by paying higher rates.

The addition of wind-generated power was a priority for the New Brunswick Liberals when they took power three years ago, Keir says. By the end of next year, the province will have two wind farms producing a total of 400 megawatts of electricity.

One is the region’s largest wind farm, which is already in operation at Kent Hills, and the other, bigger wind farm is being built on Caribou Mountain.

In the future, Keir says, the New Brunswick government could tell Hydro-Quebec it wants an additional 400 megawatts of wind power on the grid, after three deals for more Quebec electricity were signed earlier, and it would be up to Hydro-Quebec to figure out how much it would cost. New Brunswick would then decide whether to proceed with such a plan.

Keir says that no matter what others are saying about Hydro-Quebec calling the shots in New Brunswick, the province’s regulatory system still gives the government full control over energy policy, especially after a panel green light on the deal was reported recently.

But in spite of all that explaining, the level of skepticism about the deal is still very high, since officials say the deal cannot be reopened anyway right now. That likely won’t change soon.

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