Don't be misled by myths about power
Published Saturday November 28th, 2009
They say "the truth is out there," but the truth has been as elusive as alien sightings when it comes to the proposed deal to sell NB Power.
There have been more conspiracy theories out there on this topic than seen during the entire run of The X-Files, which is unfortunate given the magnitude of this deal and the potential benefits it could bring to the province.
I'm not saying the opposition is starting these crazy rumours, or even actively spreading them. I do suspect they are doing very little to discourage them.
Here's a sample of some of the wildest rumours out there on the Internet, or being put forward in dimly lit basements:
MYTH: If this deal goes through, Hydro-Québec will tear down the Mactaquac dam and probably flood everyone out living downriver of the dam.
TRUTH: This is probably one of the craziest rumours out there, but it's out there. For those truly alarmed by this suggestion, I have it on good authority that there is no reason for people living from Fredericton to the Reversing Falls to head to higher ground. The Mactaquac dam is an important piece of the NB Power pie, providing clean, reliable, cheap power to the grid. It's not going anywhere.
MYTH: This was Frank McKenna's idea.
TRUTH: Frank McKenna was premier of New Brunswick from 1987 to 1997. He hasn't been premier for 12 years, having moved on to a very successful career outside of provincial politics. He is a proud Liberal, friend and supporter of Premier Shawn Graham. He has in the past suggested that significantly lowering the cost of doing business in New Brunswick is a sure way to provide a major boost to the economy and create thousands of jobs for New Brunswickers. However, this is an initiative borne by the current government. Previous governments thought selling NB power was a good idea, including a government that included David Alward. But this government signed this memorandum of understanding.
MYTH: Rich New Brunswickers are reaping all the benefits if this deal is approved.
TRUTH: OK, this is a virus that is being actively spread by the Opposition. You can hear it in their tone when they derisively refer to companies owned by Irving family when they pontificate on the floor of the legislature.
The truth is these companies employ tens of thousands of New Brunswickers. A major factor in the bottom line of large industries in the province is the high cost of power. A number of companies have shut down in the province because they are unable to compete with similar industries in other jurisdictions. That has cost New Brunswick thousands of jobs. Lower power rates for these industries will make them immediately more competitive. This deal, as far as the premier, and blue-collar caucus members such as Abel LeBlanc are concerned, is about the men and women working at these industries, and those looking for a job.
MYTH: Quebec is going to separate and drive our power rates sky high.
TRUTH: I recommend everyone read the memorandum of understanding. It clearly states "Rates will be adjusted annually based on the year-over-year change in the Consumer Price Index." That historically falls at around two per cent per year, which is lower than power rates rise, as a rule, in New Brunswick. Decisions on rates will not be made at the Quebec legislature, as David Alward has suggested in order to stoke parochial fears and mistrust of our neighbours.
Again, the memorandum of understanding clearly states that rates will be regulated by the Energy and Utilities Board, which will consider the agreement respecting the New Brunswick Consumer Price Index, and as they always do, the cost of service and return on investment.
I'm not sure what doomsday scenario is being floated on what Internet site but access to cheaper power from Quebec, and the written agreement, will keep rate hikes after five years at a very favourable level. The EUB making the decisions on rates will be based in New Brunswick and made up of New Brunswickers, just as it is now. There is no Gallic subterfuge underfoot here.
Do what you can to get the real facts on this issue. The memorandum of understanding is on the government website in its entirety. It is a complicated deal, and the final contract is not yet in place. But the facts surrounding the memorandum of understanding are there for everyone to see. Assess this proposed deal on its merits and judge for yourself.
Better yet, judge this potential deal as against what might happen to rates if NB Power can no longer make its minimum credit card payments in the future - we get to pick up that tab.
Britt Dysart is a lawyer who practises in Fredericton and president of the New Brunswick Liberal Association.
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Myth: "That historically falls at around two per cent per year, which is lower than power rates rise, as a rule, in New Brunswick. "
Yes for the past 15 years. However the reality is that this deal is forever so you should be looking at trends over a much longer term than 15 years. It is interesting that the government always compares the CPI to electricity increases over 15 years but calculates the savings over inifinity. Compare the electricity increases to CPI over the past 50 or 75 years and you will find that CPI increased at a drastically higher rate than electricity prices. The reason is that technological advancements made huge improvements to the efficienies of producing and distributing power. Unfortunately, under this agreement customers in NB will receive no benifits of future efficiency advancements and there is no ceiling on how high above Quebec rates our residential rates could become. This is a huge risk for future generations of NB.
The status quo is much more risky to future generations, as NB Power's debt grows, and it is forced to pay to upgrade existing infrastructure, and as, sooner or later, a price gets placed on carbon emissions.
FACT: The exact opposite of the above myth.
FACT: This is based on creative accounting as confirmed by ths Auditor General.
MYTH: Based on inflation does not mean what it says but may actually mean 5 * rate of inflation.
FACT: The truth is obvious on this one.
MYTH: Industrial uers are being given a gift while consumers are getting nothing.
FACT: Consumers get 2% to 5% per year for 5 years based on no increases. Industry are in an uncompetive situation as they pay 30% more than Quebec industry.
With governments presently printing money(quantitive easing for the first time ever), literally like there is no tomorrow, which may very well cause hyperflation; the above statement is just plain dumb.
But hey, if you think inflation is gone forever, support global warming AND the sale of NB Power to Quebec, well, that is pretty well the trifecta of stupid.