$10B power play
Published Thursday October 29th, 2009
Energy Graham, Charest reach historic accord that would see NB Power sold to Hydro-Québec
FREDERICTON - The New Brunswick and Quebec governments have reached a deal worth close to $10 billion that would see Hydro-Québec buy most of NB Power, The Telegraph-Journal has learned.
The agreement, which will be announced today by Premier Shawn Graham and Quebec Premier Jean Charest, would see Hydro-Québec swallow NB Power's $4.8-billion debt and offer another $5 billion in savings for New Brunswick ratepayers, according to documents summarizing the agreement.
In exchange, Quebec's public utility will own most of NB Power's operations and secure for itself a vital pipeline into energy-hungry New England.
If the accord clears legislative and political hurtles, it will see power rates frozen for five years for residential and commercial ratepayers in New Brunswick. After that, all rate increases will be tied to inflation and the cost of building new power plants.
Industrial power rates in New Brunswick, meanwhile, will be lowered to match those in Quebec, which are among the lowest in North America.
Graham and Charest are scheduled to sign a memorandum of understanding today at Government House, the stately residence of New Brunswick's lieutenant-governor in Fredericton. NB Power chief executive officer David Hay and Thierry Vandal, president and CEO of Hydro-Québec, are also slated to take part.
The deal between the two provinces, which won't be made official until next year, follows months of negotiations between the two sides.
When the talks began in June, Graham said the sessions would focus on securing more cheap hydroelectric power from Quebec, perhaps in exchange for the use of New Brunswick's electrical grid.
Instead, the end deal would see Quebec take ownership of the entire electrical grid, including NB Power's international power lines running into the United States.
That increased access to the New England market is the biggest advantage for Quebec. That's because New Brunswick's grid would allow Hydro-Québec to pump more of its hydroelectric power to the American market.
For the Graham government, the benefits are obvious. By removing NB Power's debt, the Grits will slay 40 per cent of the province's total debt in one fell swoop.
And it would end an era of rising power rates in New Brunswick - at least in the short term.
By freezing power rates for five years, the deal would exceed a commitment made by the Liberal government to limit annual rate increases to three per cent until 2011.
As well, captains of industry would likely welcome the deal.
Last year, for example, the heads of three large forestry companies said the Graham government should quickly reduce industrial power rates to prevent further mill closures, job losses and general crisis in the already-ailing forestry sector.
The presidents of Fraser Papers, Flakeboard and J.D. Irving, Limited, bemoaned uncompetitive electricity costs, which they blamed for numerous mill closures and thousands of layoffs in New Brunswick.
The proposed deal is also likely to face protests in some corners, especially considering Graham promised to maintain NB Power as a publicly-owned utility during the 2006 election.
In recent days, Graham has declined to provide details about the talks between his government and Quebec.
"Ultimately, we want to provide lower electricity rates for New Brunswickers than can be provided under the current structure of NB Power," he said. "We also know there's a debt of over $4 billion "¦ and our government is looking at ways of dealing with this challenging and crippling debt load."
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At least the little guy gets a chance to show Shawn Graham what's up in the next election.
Sept 27, 2010 -- by Shawnocchio!!!
VERB:
To move with or as if with great speed and a rushing noise: an express train that hurtled past.
To fling with great force; hurl.
Quentin Casey, the author, sure shows bad grammar in Para4 using this word. Did you mean 'hurdles' Quentin? Use a dictionary if you want to be considered a good writer.
Also, stabilizing residential rates is nothing to sneeze at. With the scheduled increases over the next few years, you can be that the average household will save hundreds if not thousands.
We're just one giant step closer to being a Little Quebec and the unbeliveable part is that the little guy never got one honest vote on any of it, be it Feds or provincial.... and we're supposed to live in a democracy.
But this is just my imagination because the media keeps telling us that its Harper who is scary and who has a secret agenda.