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TELEGRAPH-JOURNAL

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FREDERICTON - The Graham government and the province of Quebec are continuing talks that could lead to lower energy costs in New Brunswick.

Negotiations between the two provinces come at a time when both residential ratepayers and large industry are decrying high energy costs in New Brunswick.

The ongoing government talks could see New Brunswick, which is building new transmission capacity, serve as a pipeline for power from Quebec to the New England states.

Discussions with Quebec began in June and were to include officials from Hydro-Québec and NB Power.

At the time, Premier Shawn Graham said the talks would focus on securing more cheap hydro power from Quebec, perhaps in exchange for the use of New Brunswick's electrical grid.

On Thursday, Jordan O'Brien, a government spokesman, said the talks are continuing.

"Those discussions are ongoing and have not reached any conclusions, so it wouldn't be appropriate for me to comment on any possible outcomes," he said.

Energy Minister Jack Keir told the Telegraph-Journal that the talks are wide-ranging.

"We're wide open to any opportunities that are going to be good for New Brunswick ratepayers," he said. "We'd never rule anything out or take anything off the table."

When Graham announced the talks back in June, he skirted the issue of possibly privatizing NB Power.

"This is going to be a very broad discussion. It's preliminary," he said at the time. "There are going to be a number of hypothetical questions out there."

However, like the Bernard Lord Conservatives before them, the Liberals have openly pondered the idea of privatizing the utility, which has a debt of more than $4 billion.

Keir has often said the utility is a $1.5-billion company divided into five silos. He has said the utility must either be privatized or pulled closer to government.

That stance contrasts the Liberals' initial position on the future of the power company. During the 2006 election, the Grits promised to maintain NB Power as publicly owned utility.

Conservative leader David Alward said it's clear the Liberals are plotting some sort of change.

"These guys are setting the table for something," the Opposition leader said.

Alward, who represents the riding of Woodstock, said the Grits must reveal any plans to sell the utility.

"If they're going down that road, the premier has the responsibility to be transparent with New Brunswickers," he said.

Plans for putting NB Power up for sale would be nothing new.

The former Tory government pushed hard to privatize the utility.

In October 2004, NB Power was broken into five different companies to trigger the end of the state monopoly, in response to cries for outside competition.

But the plan was never carried out to the end goal.

Since forming government, the Liberals have blasted the Conservatives for leaving the utility in a state of partial privatization and a kind of regulatory limbo.

David Coon, of the New Brunswick Conservation Council, said a sale of NB Power to the Hydro-Québec could involve the whole utility or just a small piece.

For example, the province could sell a single power plant, or the entire electrical grid and NB Power's two international power lines that run into the United States.

Coon said protests in Quebec over dirty power stations would likely turn Hydro-Québec away from New Brunswick's fossil fuel-burning plants.

And major delays and cost overruns at the Point Lepreau Nuclear Generating Station would likely deter the Quebec utility from purchasing NB Power's nuclear division, Coon said.

"You have to ask what Hydro-Québec's interests are," he said.

"They've got to be mostly interested in the grid and the international power transmission lines - and possibly the Lepreau site, if Lepreau is going to go cheap."

Marc-Brian Chamberland, a spokesman with Hydro-Québec, said Thursday the utility would not discuss its talks with the New Brunswick government.