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Mark Rickard
the victoria star

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PLASTER ROCK - Large industrial facilities such as Fraser Papers in Plaster Rock welcomed the news of lower power rates from the proposed sale of NB Power's generation assets and power grid to Hydro-Québec.

Paul McKinley, manager of Fraser Papers sawmill operations in Canada and the United States, said the Plaster Rock mill, which has been idle for nine months because of "terrible" lumber markets in the United States, will definitely benefit from cheaper industrial power under the new agreement.

"For companies like Fraser, I know our pulp mill will certainly benefit from that large industrial rate. It will also help at the Plaster Rock mill and everybody's mill that is operating in New Brunswick. These rates are much lower than what industry is paying today in New Brunswick and we have long complained is uncompetitive."

Under the agreement, Hydro-Québec would acquire most of the assets of NB Power, an additional base of more than 370,000 customers, and the transmission capability into the United States. Hydro-Québec will pay $4.75 billion for these assets, wiping out NB Power's hefty debt. NB residential and small business customers would see a five-year rate freeze while larger customers would see their rates lowered to the same level as similar firms in Québec.

McKinley said the agreement would help protect New Brunswick industry, not just forestry companies.

"This is what industry in New Brunswick has been looking for, especially the big power users like the paper mills - which we only have half of what we used to have - competitive power rates. We have made presentations to the previous government and this government. We have showed the difference and how it is an unlevel playing field in New Brunswick. This addresses that and we are going to be provided with long-term competitive power rates in New Brunswick."

McKinley pointed out long-term jobs are only created if companies are competitive. When questioned on what difference the proposed rate would make at the Plaster Rock mill, the manager said in normal year the Plaster Rock mill alone would consume more than $1 million in electrical energy.

"If it reduces rates by 25 per cent, you can do the math. That is a significant savings."

The Plaster Rock lumber mill employs up to 200 workers when operating at full capacity, but the combination of a reduced U.S. housing market, high Canadian dollar and high energy prices shut the mill down in February. Fraser Papers started a complete refurbishment of the mill, which was halted in June as the company sought creditor protection. The refurbishment work was only restarted after the New Brunswick government committed $9 million to finish the upgrade.

The massive $17-million project includes improvements and upgrades to the boiler, sawmill, lumber grading and kiln drying operations. The work is now almost complete.